Houston sees underwhelming venture capital funds in Q3 2019, following larger Texas trend

funding fumble

Texas venture capital deals had a slow quarter, according to Crunchbase data. Getty Images

The entire state of Texas saw an unimpressive third quarter of venture deals — especially compared to the second quarter's reports — and Houston was not immune.

The state reported $372.4 million fundraised by tech startups in Q3 of 2019, according to Crunchbase data, which is less than half of what was reported in Q3 of 2018 ($776.8 million) and what the state raked in the second quarter of this year ($830.6 million).

Houston brought in a measly $38.4 million last quarter, per Crunchbase, and compared to the $251 million raised by Houston companies in Q2, that drop stings. It's the lowest quarterly venture amount Houston's seen in over a year, and lower than Houston's $44.7 million reported for Q1. Zooming out a little, the city's venture reports remain a rollercoaster of sorts with strong quarters bookended by lousy ones.

Chart via InnovationMap using Crunchbase data.

Austin maintained its top spot on the Texas venture leader board with $236.4 million of Texas' total $372.4 million raised in Q3 2019, according to Crunchbase, but that's about $200 million less than the city raised in Q2. Meanwhile, Dallas — a city Houston usually competes with for the No. 2 spot — raised $70.3 million compared to its $126.7 million raised in Q2. The only region up in raises is categorized as "other Texas metros," which went from $7.3 million to $27.4 million between Q2 and Q3.

According to Crunchbase, the city's $38.4 million was raised in six deals between June and September 2019. The top deal of those six companies was raised by Axiom Space, which closed a $16 million in a seed round.

Crunchbase's Texas reporter, Mary Ann Azevedo, reminds readers that their proprietary data is subject to reporting delays.

"Actual deal counts and dollar volume totals are higher than what Crunchbase currently has on record, and the numbers we're reporting today are likely to change as more data gets added to Crunchbase over time," she writes.

Just like Crunchbase, InnovationMap doesn't get to report on every single venture deal. However, here are some of the raises we covered in the third quarter of this year.

  • Spruce, a service provider for apartment residents, raised a $3 million round in July. The company moved its headquarters to Austin around the same time. Read more.
  • Grab, a mobile software company that's designed an airport mobile ordering app, closed a multimillion-dollar series A this summer. Read more.
  • Fannin Partners LLC, an early-stage life science commercialization company, closed a $5.25 million round this summer. Read more.
  • Voyager, a bulk shipping software company, raised $1.5 million in seed funding in August. Read more.
  • Cemvita Factory, which created a way to mimic photosynthesis, raised an undisclosed amount from corporate partners in August and September. Read more.
  • Galen Data, which uses its cloud-based software to connect medical devices, closed a $1 million seed round in September. Read more.
  • Syzygy Plasmonics, a hydrogen fuel cell creator, closed a $5.8 million Series A round in September. Read more.
  • sEATz, an app that allows in-seat ordering, closed a $1.3 million seed round in September. Read more.
  • Sourcewater Inc., which specializes in oilfield water intelligence, closed its series A round at $7.2 million in September. Read more.
  • Topl, a blockchain developer, raised over $700,000 in its seed round in September. Read more.
Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

Property Showcase

World's largest student startup competition names teams for 2025 Houston event

ready, set, pitch

The Rice Alliance for Technology and Entrepreneurship has announced the 42 student-led teams worldwide that will compete in the 25th annual Rice Business Plan Competition this spring.

The highly competitive event, known as one of the world’s largest and richest intercollegiate student startup challenges, will take place April 10–12 at Houston's The Ion. Teams in this year's competition represent 34 universities from four countries, including one team from Rice.

Graduate student-led teams from colleges or universities around the world will present their plans before more than 300 angel, venture capital, and corporate investors to compete for more than $1 million in prizes. Last year, top teams were awarded $1.5 million in investment and cash prizes.

The 2025 invitees include:

  • 3rd-i, University of Miami
  • AG3 Labs, Michigan State University
  • Arcticedge Technologies, University of Waterloo
  • Ark Health, University of Chicago
  • Automatic AI, University of Mississippi and University of New Orleans
  • Bobica Bars, Rowan University
  • Carbon Salary, Washington University in St. Louis
  • Carmine Minerals, California State University, San Bernardino
  • Celal-Mex, Monterrey Institute of Technology and Higher Education
  • CELLECT Laboratories, University of Waterloo
  • ECHO Solutions, University of Houston
  • EDUrain, University of Missouri-St. Louis
  • Eutrobac, University of California, Santa Cruz
  • FarmSmart.ai, Louisiana State University
  • Fetal Therapy Technologies, Johns Hopkins University
  • GreenLIB Materials, University of Ottawa
  • Humimic Biosystems, University of Arkansas
  • HydroHaul, Harvard University
  • Intero Biosystems, University of Michigan
  • Interplay, University of Missouri-Kansas City
  • MabLab, Harvard University
  • Microvitality, Tufts University
  • Mito Robotics, Carnegie Mellon University
  • Motmot, Michigan State University
  • Mud Rat, University of Connecticut
  • Nanoborne, University of Texas at Austin
  • NerView Surgical, McMaster University
  • NeuroFore, Washington University in St. Louis
  • Novus, Stanford University
  • OAQ, University of Toronto
  • Parthian Baattery Solutions, Columbia University
  • Pattern Materials, Rice University
  • Photon Queue, University of Illinois, Urbana-Champaign
  • re.solution, RWTH Aachen University
  • Rise Media, Yale University
  • Rivulet, University of Cambridge and Dartmouth College
  • Sabana, Carnegie Mellon University
  • SearchOwl, Case Western Reserve University
  • Six Carbons, Indiana University
  • Songscription, Stanford University
  • Watermarked.ai, University of Illinois, Urbana-Champaign
  • Xatoms, University of Toronto

This year's group joins more than 868 RBPC alums that have raised more than $6.1 billion in capital with 59 successful exits, according to the Rice Alliance.

Last year, Harvard's MesaQuantum, which was developing accurate and precise chip-scale clocks, took home the biggest sum of $335,000. While not named as a finalist, the team secured the most funding across a few prizes.

Protein Pints, a high-protein, low-sugar ice cream product from Michigan State University, won first place and the $150,000 GOOSE Capital Investment Grand Prize, as well as other prizes, bringing its total to $251,000.

Tesla recalling more than 375,000 vehicles due to power steering issue

Tesla Talk

Tesla is recalling more than 375,000 vehicles due to a power steering issue.

The recall is for certain 2023 Model 3 and Model Y vehicles operating software prior to 2023.38.4, according to the National Highway Traffic Safety Administration.

The printed circuit board for the electronic power steering assist may become overstressed, causing a loss of power steering assist when the vehicle reaches a stop and then accelerates again, the agency said.

The loss of power could required more effort to control the car by drivers, particularly at low speeds, increasing the risk of a crash.

Tesla isn't aware of any crashes, injuries, or deaths related to the condition.

The electric vehicle maker headed by Elon Musk has released a free software update to address the issue.

Letters are expected to be sent to vehicle owners on March 25. Owners may contact Tesla customer service at 1-877-798-3752 or the NHTSA at 1-888-327-4236.

Houston space tech companies land $25 million from Texas commission

Out Of This World

Two Houston aerospace companies have collectively received $25 million in grants from the Texas Space Commission.

Starlab Space picked up a $15 million grant, and Intuitive Machines gained a $10 million grant, according to a Space Commission news release.

Starlab Space says the money will help it develop the Systems Integration Lab in Webster, which will feature two components — the main lab and a software verification facility. The integration lab will aid creation of Starlab’s commercial space station.

“To ensure the success of our future space missions, we are starting with state-of-the-art testing facilities that will include the closest approximation to the flight environment as possible and allow us to verify requirements and validate the design of the Starlab space station,” Starlab CEO Tim Kopra said in a news release.

Starlab’s grant comes on top of a $217.5 million award from NASA to help eventually transition activity from the soon-to-be-retired International Space Station to new commercial destinations.

Intuitive Machines is a space exploration, infrastructure and services company. Among its projects are a lunar lander designed to land on the moon and a lunar rover designed for astronauts to travel on the moon’s surface.

The grants come from the Space Commission’s Space Exploration and Aeronautics Research Fund, which recently awarded $47.7 million to Texas companies.

Other recipients were:

  • Cedar Park-based Firefly Aerospace, which received $8.2 million
  • Brownsville-based Space Exploration Technologies (SpaceX), which received $7.5 million
  • Van Horn-based Blue Origin, which received $7 million

Gwen Griffin, chair of the commission, says the grants “will support Texas companies as we grow commercial, military, and civil aerospace activity across the state.”

State lawmakers established the commission in 2023, along with the Texas Aerospace Research & Space Economy Consortium, to bolster the state’s space industry.

View All Listings