Sepsis has been the No. 1 killer hospitals, but this Houston startup has a tech to help mitigate the risk. Photo via Getty Images

Anyone can die of sepsis. The number one killer in hospitals has a reputation for felling the infirm and elderly, but while the immunocompromised are at highest risk, sepsis isn’t that selective.

Take 12-year-old Rory Staunton. In 2012, the healthy boy scratched his arm diving for a ball in gym class at his school in Jackson Heights, NY. Bacteria entered his arm through the cut and he died days later of septic shock.

His story is not unique. Physician Sarma Velamuri saw this firsthand in his internal medicine practice at St. Luke’s Health Center and his residency at Baylor, both in Houston. But it really struck home when he watched helplessly as a friend’s 22-year-old daughter lost her life to sepsis. He had to tell his friend that she would not be coming home.

“There are 300,000-plus people a year who die of sepsis,” says Velamuri. “It’s important that people understand it’s not just those who are most susceptible to infections.”

This fact is not only unfortunate, but preventable. And that’s why Velamuri, who describes himself as “a recovering hospitalist,” co-founded Luminare in 2014. A full-time CEO since 2017, Velamuri, who runs the company with co-founder and CTO Marcus Rydberg, is based in the TMC Innovation Factory.

“Because of the complex workflows in hospitals, sometimes it takes 10 people to get the patient the care they need,” Velamuri explains.

And because of the pervasiveness of sepsis, it’s important to screen every patient who enters an institution before it gets to that point.

Luminare’s technology allows nurses, who are notoriously spread thin, to automatically screen patients in 10 seconds using 50 different parameters.

“We’re looking at a vast amount of data simultaneously,” says Velamuri. “We’re not generating any new data, we’re taking data that exists and shining a light on it.”

In 2020, the technology found a new application when Velamuri and his team created a version of Luminare that helped with the hospital workflow surrounding COVID PCR testing and vaccine management. Since then, it has also been used to help identify and treat monkeypox.

Though Velamuri says he doesn’t want to distract Luminare from its goal of making sepsis the number-two killer in hospitals, he is also aware that his technology can be instrumental in identifying and treating patients at risk for countless other maladies, including heart failure and stroke, and even helping with oncology workflows.

Velamuri says that his team is Luminare’s biggest strength, far more than the AI that they have designed.

“I have this saying that AI is a great servant but a terrible master. It doesn’t solve the problem,” says Velamuri.

Though the company is distributed as far afield as Stockholm, about half of its people live and work in Houston. Of the company’s placement in TMC’s Innovation Factory, Velamuri says, “They’ve been tremendous partners to us. The company would not be as successful today without their supportive partnership.” Not least of that is working with in the same space as other founders who can share their expertise as easily as a trip to the coffee machine.

And the company is growing quickly. Last year, Luminare participated in Cedars-Sinai’s accelerator program. Thanks to that partnership, the hospital is now using Luminare’s technology for sepsis screening. The team is working to partner with even more large hospital systems on solutions for one of the health industry’s biggest problems. And data that shows that Luminare can be the path to preventing death from hospitals’ most prolific killer.

Sarma Velamuri went from MD to CEO when he founded Luminare. Photo via luminare.io

The Texas Medical Center Innovation Factory has named the 16 companies making up the inaugural cohort in the Innovate UK Global Incubator Programme. Photo via tmc.edu

TMC names inaugural cohort for unique accelerator with UK

coming to HOU

Sixteen digital health and medical device startups founded in the United Kingdom have been selected for a customized accelerator at the Texas Medical Center's Innovation Factory.

In partnership with Innovate UK, TMCi created the Innovate UK Global Incubator Programme, a new accelerator that supports UK businesses as they build their United States go-to-market plan. The program builds the BioBridge relationship between TMC and the UK that was originally established five years ago.

“The TMC UK BioBridge program was launched with the UK Department for Business and Trade in 2018 to serve as a gateway for advancing life sciences and foster innovation and research between our two countries," says Ashley McPhail, chief external affairs and administration officer for TMC, in a news release. "We saw an opportunity to work with Innovate UK to develop a larger program with the UK after the success of the 11 companies that previously participated in our health tech accelerator."

The 16 companies will participate in the program from June to November. The cohort is expected to arrive in Houston on June 5 and have access to TMCi's facilities, network of mentors and potential clients, funding, potential customers, and curated programing — all while being a unique entry point into the US. The new offering joins three other globally recognized curriculums: Biodesign, Accelerator for Cancer Therapeutics, and Health Tech.

“TMCi nurtures long-term growth, development, and competitiveness to increase startups chances of success and global expansion," says Emily Reiser, associate director of TMC Innovation. "By bringing their novel technologies and exposing them to a curated selection of TMC’s expert network, startups receive support and evaluation to build, scale, and expand in the US market."

Two of the cohort's specialties include cardiovascular and oncology — two of TMC's strongest areas of expertise — with solutions ranging from surgical devices to AI-enabled risk stratification and hospital efficiency.

Innovate UK is the country's national innovation agency dedicated to supporting business-led innovation in all sectors.

“The United Kingdom is fully committed to improving global healthcare through scientific collaboration," says His Majesty’s Consul General in Texas Richard Hyde in the release. "Through the expansion of the TMC UK BioBridge and in partnership with Innovate UK, this programme will help to expose the brightest and best British companies to the world’s largest medical city. Our companies will collaborate and grow as they work to develop cutting edge technology. The partnership between the UK Government and TMC demonstrates that international collaboration can drive both economic growth and improvement to quality of life.”

The 16 companies making up the inaugural cohort are as follows, according to TMC.

  • AINOSTICS aims to revolutionize the treatment and prevention of neurological conditions, such as dementia, by developing innovative AI-enabled solutions that draw novel insights from routinely acquired non-invasive medical scans to deliver accurate diagnosis and outcome prediction, and in turn facilitate personalized care and timely access to disease-modifying treatments for patients.
  • Alvie is a blended human plus AI-enabled digital solution providing personalised pre and rehabilitation coaching and supportive care for cancer and surgery. Alvie's technology combines data profiling, risk-stratification and tailored prescriptions of health and well-being with curated educational content, targeted behaviour change coaching and expert support through chat messaging and virtual consultations.
  • C the Signs™ is a validated AI cancer prediction platform, which can identify patients at risk of cancer at the earliest and most curable stage of the disease. Used by healthcare professionals, C the Signs can identify which tumor type a patient is at risk of and recommend the most appropriate next step in less than 30 seconds. The platform has detected over 10,000 patients with cancer, with over 50 different types of cancer diagnosed, and with a sensitivity of >98% for cancer.
  • At PEP Health, We believe all patients deserve the best care possible. Our cutting-edge machine-learning technology enables healthcare organisations, regulators, and insurers the real-time, actionable insights they need to have a direct and dramatic impact on patient experiences.
  • PreciousMD improves the lives of lung-cancer and other lung-related illnesses patients worldwide by enabling imaging-based diagnostics needed for personalized treatment pathways.
  • Ufonia is an autonomous telemedicine company, we use large language models and voice AI to increase the capacity of clinical professionals.
  • My mhealth offers digital therapeutics for a range of long-term conditions- COPD, Asthma, Diabetes and Heart Disease. Our product has been successfully deployed in the UK and India, with >100,000 users registered to date. Our solutions empower patients to self-manage their conditions, resulting in dramatic improvements in outcomes, as evidenced through multiple clinical trials and real-world evaluations.
  • At Surgery Hero, we offer a clinically backed solution that ensures whole-human support before and after surgery. We help health systems, employers and health plans cut costs without sacrificing quality of care.
  • Panakeia's software platform enables extremely rapid multi-omics profiling in minutes directly from routinely used tissue images without needing wet lab assays.
  • QV Bioelectronics are striving to deliver longer, better quality lives for brain tumour patients. Using their first-of-its-kind implantable electric field therapy device, GRACE, QV will provide effective, focal & continuous treatment without impacting patient quality of life.
  • 52 North is a med-tech company focused on improving health outcomes and health equity by reinventing care pathways. The NeutroCheck® solution is a finger-prick blood test and digital platform built to significantly improve safety and quality of life for cancer patients, by helping to identify at-home those patients who are at risk of the most fatal side-effect of chemotherapy: neutropenic sepsis.
  • Somnus is fulfilling an unmet need in global healthcare by developing real-time, point of care blood propofol monitoring. Its products will improve the care of sedated and anaesthetised patients, save money for hospitals, and facilitate a major reduction in greenhouse gas emissions.
  • ScubaTx is a breakthrough organ transplant preservation company established to solve the global unmet need for cost-efficient and longer-duration organ preservation technology. ScubaTx has developed a simple, small and affordable device which uses Persufflation to extend the preservation of organs.
  • IBEX is on a mission to help people live active, healthy and productive lives by increasing their access to early diagnosis of osteoporosis. The IBEX BH software as medical device delvers routine, automated assessment of fracture risk from routine radiology for earlier detection and more equitable treatment of osteoporosis.
  • NuVision produces products derived from donated human amniotic membrane that are used in ophthalmology to help patients with chronic, traumatic and post-surgical wounds of the eye to be treated earlier and recover more fully and more quickly. The company’s products are also used in the management of dry eye disease, a debilitating conditions that affects around 17m people in the USA.
  • Calon Cardio-Technology is on a mission to improve quality of life for patients with Left Ventricular Assist devices (LVAD) and reduce the common post operative complications associated with these implantable heart pumps. We plan to do this by introducing a completely wireless heart pump system and augment patient follow-up with built-in remote monitoring capabilities.
A TMC-founded medical device startup has made a grand exit. Image via TMC.edu

Houston health tech startup acquired by medical device company

exit strategy

A Houston health tech business that has created a medical device to enhance and improve surgery has been acquired.

Illinois-based Northgate Technologies Inc. announced the acquisition of Allotrope Medical earlier this month. The Houston startup has designed an electrosurgical ureter identification system for optimizing surgery for both robotic and non-robotic laparoscopic surgical procedures. The StimSite technology is a hand-held device used by general and OBGYN surgeons and has received a Safer Technologies Program designation from the FDA.

“By bringing the StimSite product platform into NTI’s existing portfolio of innovative insufflation and smoke removal products, we have taken a significant step in fulfilling our vision to optimize the surgical environment for minimally invasive surgery,” says Dave McDonough, vice president and general manager at NTI.

NTI, an affiliate of the Trudell Medical Limited group of companies, develops and manufactures innovative tools for surgery that improve patient outcomes. The company has distribution in over 100 countries.

Allotrope Medical was founded in 2016 by Dr. Albert Huang and has raised over $5 million in venture capital investment, with contribution from Y Combinator, Texas Halo Fund, and more. Huang, according to his LinkedIn, is now chief medical officer for NTI.

"To have taken this from idea to exit has been a true honor," Huang writes in a post on LinkedIn. "To all those that have generously given me their time, their input, their investment, and even more importantly, those that believed in me and this technology, thank you."

Huang was a general surgery resident and innovation fellow at Houston Methodist before serving as innovation strategist at Texas Medical Center Innovation while growing his company and developing his technology. Allotrope Medical was housed out of TMC Innovation and was a member of TMC's third medical device accelerator cohort.

"For now, the focus is the transition and ensuring that the new sales team learns everything about StimSite, and gets the technology into more surgeon hands as we continue to drive it towards becoming part of the standard of care," the post reads.

Allotrope Medical was founded in 2016 by Dr. Albert Huang. Image via LinkedIn

Proxima Clinical Research has announced an office expansion — and more Houston innovation news. Photo via Twitter

Med tech firm expands footprint, Houston innovator assumes new role, and more local innovation news

short stories

Houston's innovation ecosystem has had some big news this month, from new job titles for Houston innovators to expanding office space.

In this roundup of Houston startup and innovation news, a Houston organization expands its footprint in the TMC, Rice University opens applications for a cleantech accelerator, and more.

Organization expands footprint in Houston

Proxima CRO has announced its expansion within TMCi. Photo via Twitter

Proxima Clinical Research, a contract research organization headquartered in Houston, announced that it is expanding its office space in the Texas Medical Center Innovation Factory.

"Texas Medical Center is synonymous with innovation, and the TMC Innovation space has proven an ideal location for our CRO. It's an important part of our origin story and a big part of our success," says Kevin Coker, CEO and co-founder of Proxima CRO, in a news release.

The expansion will include around 7,500-square feet of additional office space.

"The resources found across TMC's campuses allow for companies such as Proxima Clinical Research to achieve clinical and business milestones that will continue to shape the future of life sciences both regionally and globally. We are excited for Proxima to expand their footprint at TMC Innovation Factory as they further services for their MedTech customers," says Tom Luby, director of TMC Innovation, in the release.

$20M grant fuels hardtech program's expansion

Activate is planting its roots in Houston with a plan to have its first set of fellows next year. Photo via Activate.org

A hardtech-focused nonprofit officially announced its Houston expansion this week. Activate, which InnovationMap reported was setting up its fifth program here last month, received a $20M commitment by the National Science Foundation to fuel its entrance into the Bayou City.

“Houston’s diversity offers great promise in expanding access for the next generation of science entrepreneurs and as a center of innovation for advanced energy," says NSF SBIR/STTR program director Ben Schrag in a news release.

The organization was founded in Berkeley, California, in 2015 to bridge the gap between the federal and public sectors to deploy capital and resources into the innovators creating transformative products. The nonprofit expanded its programs to Boston and New York before launching a virtual fellowship program — Activate Anywhere, which is for scientists 50 or more miles outside one of the three hubs.

“We are delighted to be opening our newest Activate community in Houston,” says Activate Anywhere managing director Hannah Murnen, speaking at the annual Advanced Research Projects Agency-Energy Innovation Summit. “Houston is a city where innovation thrives, with an abundance of talent, capital, and infrastructure—the perfect setting for the Activate Fellowship.”

Activate is still looking its Houston’s first managing director is actively underway and will select fellows for Activate Houston in 2024.

TMC names new entrepreneur in residence

Zaffer Syed has assumed a new role at TMC. Photo via TMC.org

Houston health tech innovator has announced that he has joined the Texas Medical Center's Innovation Factory as entrepreneur in residence for medtech. Zaffer Syed assumed the new role this month, according to his LinkedIn, and he's been an adviser for the organization since 2017.

Syed has held a few leadership roles at Saranas Inc., a medical device company founded in Houston to detect internal bleeding following medical procedures. He now serves as adviser for the company.

"As CEO of Saranas, he led the recapitalization of the company that led to the FDA De Novo classification and commercial launch of a novel real-time internal bleed monitoring system for endovascular procedures," reads the TMC website. "Zaffer oversaw clinical development, regulatory affairs and strategic marketing at OrthoAccel Technologies, a private dental device startup focused on accelerating tooth movement in patients undergoing orthodontic treatment.

"Prior to working in startup ventures, Zaffer spent the first 13 years of his career in various operational roles at St. Jude Medical and Boston Scientific to support the development and commercialization of Class III implantable devices for cardiovascular and neuromodulation applications."

TMC is currently looking for an entrepreneur in residence for its TMCi Accelerator for Cancer Therapeutics program.

Applications open for clean energy startup program

Calling all clean energy startups. Photo courtesy of The Ion

The Clean Energy Accelerator, an energy transition accelerator housed at the Ion and run by the Rice Alliance for Technology and Entrepreneurship, has opened applications for Class 3. The deadline to apply is April 14.

The accelerator, which helps early-stage ventures reach technical and commercial milestones through hybrid programming and mentorship, will host its Class 3 cohort from July 25 to Sept. 22.

“Accelerating the transition to a net-zero future is a key goal at Rice University. Through accelerating the commercial potential of our own research as well as supporting the further adoption of global technologies right here in Houston, the Rice Alliance Clean Energy Accelerator is proof of that commitment,” says Paul Cherukuri, vice president of innovation at Rice, in a news release. “The Rice Alliance has all the critical components early-stage energy ventures need for success: a corporate innovation network, energy investor network, access to mentors and a well-developed curriculum. This accelerator program is a unique opportunity for energy startups to successfully launch and build their ventures and get access to the Houston energy ecosystem.”

According to Rice, the 29 alumni companies from Class 1 and 2 have gone on to secure grants, partnerships, and investments, including more than $75 million in funding. Companies can apply here, learn more about the accelerator here or attend the virtual information session April 3 by registering here.

These nine companies are headed to Houston. Photo courtesy of TMC

TMC Innovation names 9 companies to its latest bootcamp

coming soon to Hou

Nine startups hailing from as far away as Sydney, Australia, are en route to Houston to participate in a week-long program at the Texas Medical Center's Innovation Factory.

The 2022 TMCi Accelerator for HealthTech Bootcamp is looking to accelerate these startups, which specialize in health tech innovation across the spectrum — maternal medicine, mental health, diagnostics, patient experience, and artificial intelligence.

“One of the things I love about Bootcamp is the opportunity to showcase the diversity of innovation our ecosystem attracts," says Devin Dunn, head of the Accelerator for Healthtech, in a news release. "The breadth of clinical and operational expertise in our Medical Campus creates a unique learning ground, truly unmatched. Our tailored accelerator program allows for an experience that is personalized to each company’s stage, specialty and growth objectives.”

After the week at TMC, a smaller group of startups will be accepted into the TMCi Accelerator, a six-month program focused on maturing strategic relationships.

“Startup companies who are impacting the future of healthcare need clinical evidence to validate their value proposition and grow their businesses," says Emily Reiser, associate director of TMC Innovation, in the release. "Our platform at the TMC sources the best talent from around the world, performs rigorous diligence, and brings entrepreneurs together with our dedicated network to drive value for each stakeholder. We are seeing this value proposition resonate with entrepreneurs, including international companies preparing to enter the US market”

The nine startups that will be participating in the program, per the news release, include:

  • Based in Roseville, Minneapolis, Bloom Standard is deploying the first self-driving pediatric ultrasound to earlier diagnose heart and lung conditions in primary care, remote and under-resourced settings.
  • Echo IQ, headquartered in Sydney, is a screening program that applies a proprietary algorithm to produce risk assessments for patients using their echocardiographic measurements.
  • San Francisco-based Ejenta automates remote monitoring and care using AI technology exclusively licensed from NASA. “Intelligent agents” learn from connected devices, claims and EMR data to monitor patients, predict health and to provide automated support for patients and automated workflow for clinicians.
  • Kintsugi, based in Berkley, California, is on a mission to see mental health more clearly by developing novel voice biomarker infrastructure to detect signs of depression and anxiety from short clips of free-form speech.
  • San Francisco-based Lana Health is modernizing patient experiences, across the care continuum with an end-to-end, scalable platform, enabling frictionless care transitions, high patient satisfaction, and better clinical outcomes.
  • Liberate Medical, from Crestwood, Kentucky, improves outcomes for mechanically ventilated patients using its breakthrough, non-invasive, respiratory muscle-protective, neurostimulation device, VentFree.
  • Limbix, headquartered in Palo Alto, has a mission to improve mental health with accessible technology.
  • Nua Surgical, from Galway, Ireland, Nua Surgical is an award-winning Irish start-up dedicated to innovating in women’s health.
  • Houston-based Prana Thoracic is developing solutions for the detection and intervention of early-stage lung cancer.
Check out these conferences, pitch competitions, networking, and more in the month of August. Photo via Getty Images

10+ can't-miss Houston business and innovation events for August

where to be

Houstonians are transitioning into a new summer month, and the city's business community is mixing in networking and conference events with family vacations and time off. Here's a rundown of what all to throw on your calendar for August when it comes to innovation-related events.

This article will be updated as more business and tech events are announced.


August 1 — Beyond Bias: Essentials for an Equitable Community

During this seminar, Tracie Jae, Founder of The Quiet Rebel, will share a paradigm shift designed to disrupt the current DEI model.

Diversity, Equity, and Inclusion (DEI) is the accepted workforce best practice. As organizations continue to find the mix of techniques for their particular culture, we began to see the addition of other words like Belonging, Justice, and Access. Meanwhile, the impact appears the same - a focus on making space for “others” rather than actively creating a welcoming environment of mutual respect and acknowledgement. We have chosen to modify rather than innovate.

The event is Monday, August 1, 10 am to noon, at The Ion. Click here to register.

August 3 — Bayou Startup Showcase

The showcase features 24 companies from four accelerators: RED Labs, OwlSpark, RED Launch and BlueLaunch. You will be able to engage with these businesses, sign up for pre-orders, and buy products at their booths. Teams have recorded their pitches for you to learn about them in advance, watch during the event, or review afterward.

The event is Wednesday, August 3, 5 to 8 pm, at Saint Arnold Brewing Company. Click here to register.

August 4 — National Cancer Institute | SBIR Funding Opportunities

The TMCi Accelerator is excited to partner with the National Cancer Institute for a discussion about small business funding opportunities.

The event is Thursday, August 4, 1 to 3 pm, online. Click here to register.

August 8 — Intro to Finance Automation

Understand the benefits of finance automation and how to identify meaningful automation opportunities in your business. Learn from firsthand experiences of FinOptimal’s Founder & CEO, Jesse Rubenfeld.

The event is Monday, August 8, 10 am to noon, at The Ion. Click here to register.

August 11 — Illuminate Houston: An Innovation Conversation

Illuminate Houston is an event series highlighting business leaders who challenge the way we think about the future, featuring dynamic formats where speakers and attendees discuss trends, technologies, and issues that define how we do business. The Partnership welcomes Roberta L. Schwartz, Ph.D., Executive Vice President and Chief Innovation Officer of Houston Methodist on Thursday, August 11.

The event is Thursday, August 11, 1 to 2:30 pm, at Partnership Tower. Click here to register.

August 11 — Summer in the City: UH Students' Showcase Day

Throughout the "Summer in the City" class, students from the University of Houston Honors College have learned about creativity, leadership, entrepreneurship, and smart cities. Taking a mixed-media approach, and benefiting from guest lectures by Robert Cremins, Director of Creative Work: A Pre-Professional Program at UH, as well as panel discussions featuring entrepreneurs, innovators, and founder at the Ion, students have developed their design thinking and innovation skills and tackled problems experienced in Houston.

The event is Thursday, August 11, 5:30 to 7 pm, at the ion. Click here to register.

August 16 — Softeq Venture Studio Public Demo Day 

The Softeq Venture Studio invested $125,000 in cash and services in each of the fourteen early-stage startups to help them refine their business model, build their technology, and prepare them to scale. With 14 startups, the Q2 2022 cohort is the largest yet and brings the total portfolio to 27 companies. In this capstone event, founders have seven minutes each to present their pitch deck, demo their product, outline their ask, and answer questions.

The event is Tuesday, August 16, 5 to 7:30 pm, at The Ion. Click here to register.

August 16 — Enventure "Inspire" Seminar Series - Entrepreneurship

The "Inspire" Seminar Series was developed by Enventure to help students learn about the reality of working in the biotech and biomedical fields. The series consists of a number of events starring guest speakers coming from different areas in the biotech and biomedical industries. Dr. Lauren Cornell is an experienced research scientist with a strong history of military collaborations.

The event is Tuesday, August 16, 6 to 7:30 pm, online. Click here to register.

August 18 — Evolve Houston Relaunch Event

This past year, Evolve introduced a new logo and website to continue embarking on its mission to improve air quality and reduce greenhouse gas emissions through transportation electrification.

The event is Thursday, August 18, 8:30 am to 12:30 pm, at George R. Brown Convention Center. Click here to register.

August 18 — Transition on Tap

Transition On Tap is Greentown Labs' monthly networking event devoted to fostering conversations and connections among the climate and energy transition ecosystem in Houston and beyond. Entrepreneurs, investors, students, and friends of climatetech are invited to attend, meet colleagues, discuss solutions, and engage with our growing community. I

The event is Thursday, August 18, 5 to 7 pm, at Greentown Houston. Click here to register.

August 22 — Startup-Inside-a-Business 102: How to Find SIB Without Spending Any Money

Founders will learn how to look at their companies differently, to see how the capabilities and systems they’ve already created can be reconfigured to multiply growth, value, and valuation. Learn a step-by-step approach to finding the best potential startup inside and insights for estimating the potential value that’s waiting to be unlocked.

This workshop is the second in a series of three Startup-Inside-a-Business Workshops.

The event is Monday, August 22, 10 to 11:30 am, at The Ion. Click here to register.

August 29 — Startup-Inside-a-Business 103: Build One w/out Disrupting Existing Business

Founders will learn how getting investors involved early can end the need for founder cash investments while simultaneously establishing a higher company valuation. They’ll also learn how to manage the tradeoff between cost, risk, and reward by using proven techniques to gain proof before scaling up.

This workshop is the last in a series of three Startup-Inside-a-Business Workshops.

    The event is Monday, August 29, 10 to 11:30 am, at The Ion. Click here to register.

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    Your data center is either closer than you think or much farther away

    houston voices

    A new study shows why some facilities cluster in cities for speed and access, while others move to rural regions in search of scale and lower costs. Based on research by Tommy Pan Fang (Rice Business) and Shane Greenstein (Harvard).

    Key findings:

    • Third-party colocation centers are physical facilities in close proximity to firms that use them, while cloud providers operate large data centers from a distance and sell access to virtualized computing resources as on‑demand services over the internet.
    • Hospitals and financial firms often require urban third-party centers for low latency and regulatory compliance, while batch processing and many AI workloads can operate more efficiently from lower-cost cloud hubs.
    • For policymakers trying to attract data centers, access to reliable power, water and high-capacity internet matter more than tax incentives.

    Recent outages and the surge in AI-driven computing have made data center siting decisions more consequential than ever, especially as energy and water constraints tighten. Communities invest public dollars on the promise of jobs and growth, while firms weigh long-term commitments to land, power and connectivity.

    Against that backdrop, a critical question comes into focus: Where do data centers get built — and what actually drives those decisions?

    A new study by Tommy Pan Fang (Rice Business) and Shane Greenstein (Harvard Business School) provides the first large-scale statistical analysis of data center location strategies across the United States. It offers policymakers and firms a clearer starting point for understanding how different types of data centers respond to economic and strategic incentives.

    Forthcoming in the journal Strategy Science, the study examines two major types of infrastructure: third-party colocation centers that lease server space to multiple firms, and hyperscale cloud centers owned by providers like Amazon, Google and Microsoft.

    Two Models, Two Location Strategies

    The study draws on pre-pandemic data from 2018 and 2019, a period of relative geographic stability in supply and demand. This window gives researchers a clean baseline before remote work, AI demand and new infrastructure pressures began reshaping internet traffic patterns.

    The findings show that data centers follow a bifurcated geography. Third-party centers cluster in dense urban markets, where buyers prioritize proximity to customers despite higher land and operating costs. Cloud providers, by contrast, concentrate massive sites in a small number of lower-density regions, where electricity, land and construction are cheaper and economies of scale are easier to achieve.

    Third-party data centers, in other words, follow demand. They locate in urban markets where firms in finance, healthcare and IT value low latency, secure storage, and compliance with regulatory standards.

    Using county-level data, the researchers modeled how population density, industry mix and operating costs predict where new centers enter. Every U.S. metro with more than 700,000 residents had at least one third-party provider, while many mid-sized cities had none.

    ImageThis pattern challenges common assumptions. Third-party facilities are more distributed across urban America than prevailing narratives suggest.

    Customer proximity matters because some sectors cannot absorb delay. In critical operations, even slight pauses can have real consequences. For hospital systems, lag can affect performance and risk exposure. And in high-frequency trading, milliseconds can determine whether value is captured or lost in a transaction.

    “For industries where speed is everything, being too far from the physical infrastructure can meaningfully affect performance and risk,” Pan Fang says. “Proximity isn’t optional for sectors that can’t absorb delay.”

    The Economics of Distance

    For cloud providers, the picture looks very different. Their decisions follow a logic shaped primarily by cost and scale. Because cloud services can be delivered from afar, firms tend to build enormous sites in low-density regions where power is cheap and land is abundant.

    These facilities can draw hundreds of megawatts of electricity and operate with far fewer employees than urban centers. “The cloud can serve almost anywhere,” Pan Fang says, “so location is a question of cost before geography.”

    The study finds that cloud infrastructure clusters around network backbones and energy economics, not talent pools. Well-known hubs like Ashburn, Virginia — often called “Data Center Alley” — reflect this logic, having benefited from early network infrastructure that made them natural convergence points for digital traffic.

    Local governments often try to lure data centers with tax incentives, betting they will create high-tech jobs. But the study suggests other factors matter more to cloud providers, including construction costs, network connectivity and access to reliable, affordable electricity.

    When cloud centers need a local presence, distance can sometimes become a constraint. Providers often address this by working alongside third-party operators. “Third-party centers can complement cloud firms when they need a foothold closer to customers,” Pan Fang says.

    That hybrid pattern — massive regional hubs complementing strategic colocation — may define the next phase of data center growth.

    Looking ahead, shifts in remote work, climate resilience, energy prices and AI-driven computing may reshape where new facilities go. Some workloads may move closer to users, while others may consolidate into large rural hubs. Emerging data-sovereignty rules could also redirect investment beyond the United States.

    “The cloud feels weightless,” Pan Fang says, “but it rests on real choices about land, power and proximity.”

    ---

    This article originally appeared on Rice Business Wisdom. Written by Scott Pett.

    Pan Fang and Greenstein (2025). “Where the Cloud Rests: The Economic Geography of Data Centers,” forthcoming in Strategy Science.

    Houston climbs to top 10 spot on North American tech hubs index

    tech report

    Houston already is the Energy Capital of the World, and now it’s gaining ground as a tech hub.

    On Site Selection magazine’s 2026 North American Tech Hub Index, Houston jumped to No. 10 from No. 16 last year. The index relies on data from Site Selection as well as data from CBRE, CompTIA and TeleGeography to rank the continent’s tech hotspots. The index incorporates factors such as internet connectivity, tech talent and facility projects for tech companies.

    In 2023, the Greater Houston Partnership noted the region had “begun to receive its due as a prominent emerging tech hub, joining the likes of San Francisco and Austin as a major player in the sector, and as a center of activity for the next generation of innovators and entrepreneurs.”

    The Houston-area tech sector employs more than 230,000 people, according to the partnership, and generates an economic impact of $21.2 billion.

    Elsewhere in Texas, two other metros fared well on the Site Selection index:

    • Dallas-Fort Worth nabbed the No. 1 spot, up from No. 2 last year.
    • Austin rose from No. 8 last year to No. 7 this year.

    San Antonio slid from No. 18 in 2025 to No. 22 in 2026, however.

    Two economic development officials in DFW chimed in about the region’s No. 1 ranking on the index:

    • “This ranking affirms what we’ve long seen on the ground — Dallas-Fort Worth is a top-tier technology and innovation center,” said Duane Dankesreiter, senior vice president of research and innovation at the Dallas Regional Chamber. “Our region’s scale, talent base, and diverse strengths … continue to set DFW apart as a national leader.”
    • “Being recognized as the top North American tech hub underscores the strength of the entire Dallas-Fort Worth region as a center of innovation and next-generation technology,” said Robert Allen, president and CEO of the Fort Worth Economic Development Partnership.

    While not directly addressing Austin’s Site Selection ranking, Thom Singer, CEO of the Austin Technology Council, recently pondered whether Silicon Hills will grow “into the kind of community that other cities study for the right reasons.”

    “Austin tech is not a club. It is not a scene. It is not a hashtag, a happy hour, or any one place or person,” Singer wrote on the council’s blog. “Austin tech is an economic engine and a global brand, built by thousands of people who decided to take a risk, build something, hire others, and be part of a community that is still young enough to reinvent itself.”

    South of Austin, Port San Antonio is driving much of that region’s tech activity. Occupied by more than 80 employers, the 1,900-acre tech and innovation campus was home to 18,400 workers in 2024 and created a local economic impact of $7.9 billion, according to a study by Zenith Economics.

    “Port San Antonio is a prime example of how innovation and infrastructure come together to strengthen [Texas’] economy, support thousands of good jobs, and keep Texas competitive on the global stage,” said Kelly Hancock, the acting state comptroller.

    14 Houston startups starting 2026 with fresh funding

    cha-ching

    Houston startups closed out the last half of 2025 with major funding news.

    Here are 14 Houston companies—from groundbreaking energy leaders to growing space startups—that secured funding in the last six months of the year, according to reporting by InnovationMap and our sister site, EnergyCapitalHTX.com.

    Did we miss a funding round? Let us know by emailing innoeditor@innovationmap.com.

    Fervo Energy

    Fervo Energy has closed an oversubscribed Series E. Photo via Fervo Energy

    Houston-based geothermal energy company Fervo Energy closed an oversubscribed $462 million series E funding round, led by new investor B Capital, in December.

    The company also secured $205.6 million from three sources in June.

    “Fervo is setting the pace for the next era of clean, affordable, and reliable power in the U.S.,” Jeff Johnson, general partner at B Capital, said in a news release.

    The funding will support the continued buildout of Fervo’s Utah-based Cape Station development, which is slated to start delivering 100 MW of clean power to the grid beginning in 2026. Cape Station is expected to be the world's largest next-generation geothermal development, according to Fervo. The development of several other projects will also be included in the new round of funding. Continue reading.

    Square Robot

    Houston robotics co. unveils new robot that can handle extreme temperatures

    Square Robot's technology eliminates the need for humans to enter dangerous and toxic environments. Photo courtesy of Square Robot

    Houston- and Boston-based Square Robot Inc. announced a partnership with downstream and midstream energy giant Marathon Petroleum Corp. (NYSE: MPC) last month.

    The partnership came with an undisclosed amount of funding from Marathon, which Square Robot says will help "shape the design and development" of its submersible robotics platform and scale its fleet for nationwide tank inspections. Continue reading.

    Eclipse Energy

    Eclipse Energy and Weatherford International are expected to launch joint projects early this year. Photo courtesy of Eclipse Energy.

    Oil and gas giant Weatherford International (NASDAQ: WFRD) made a capital investment for an undisclosed amount in Eclipse Energy in December as part of a collaborative partnership aimed at scaling and commercializing Eclipse's clean fuel technology.

    According to a release, joint projects from the two Houston-based companies are expected to launch as soon as this month. The partnership aims to leverage Weatherford's global operations with Eclipse Energy's pioneering subsurface biotechnology that converts end-of-life oil fields into low-cost, sustainable hydrogen sources. Continue reading.

    Venus Aerospace 

    Lockheed Martin Ventures says it's committed to helping Houston-based Venus Aerospace scale its technology. Photo courtesy Venus Aerospace

    Venus Aerospace, a Houston-based startup specializing in next-generation rocket engine propulsion, has received funding from Lockheed Martin Ventures, the investment arm of aerospace and defense contractor Lockheed Martin, for an undisclosed amount, the company announced in November. The product lineup at Lockheed Martin includes rockets.

    The investment follows Venus’ successful high-thrust test flight of its rotating detonation rocket engine (RDRE) in May. Venus says it’s the only company in the world that makes a flight-proven, high-thrust RDRE with a “clear path to scaled production.”

    Venus says the Lockheed Martin Ventures investment reflects the potential of Venus’ dual-use technology for defense and commercial uses. Continue reading.

    Koda Health

    Tatiana Fofanova and Dr. Desh Mohan, founders of Koda Health, which recently closed a $7 million series A. Photo courtesy Koda Health.

    Houston-based digital advance care planning company Koda Health closed an oversubscribed $7 million series A funding round in October.

    The round, led by Evidenced, with participation from Mudita Venture Partners, Techstars and Texas Medical Center, will allow the company to scale operations and expand engineering, clinical strategy and customer success, according to a news release.

    The company shared that the series A "marks a pivotal moment," as it has secured investments from influential leaders in the healthcare and venture capital space. Continue reading.

    Hertha Metals

    U.S. Rep. Morgan Luttrell, a Magnolia Republican, and Hertha Metals founder and CEO Laureen Meroueh toured Hertha’s Conroe plant in August. Photo courtesy Hertha Metals/Business Wire.

    Conroe-based Hertha Metals, a producer of substantial steel, hauled in more than $17 million in venture capital from Khosla Ventures, Breakthrough Energy Fellows, Pear VC, Clean Energy Ventures and other investors.

    The money was put toward the construction and the launch of its 1-metric-ton-per-day pilot plant in Conroe, where its breakthrough in steelmaking has been undergoing tests. The company uses a single-step process that it claims is cheaper, more energy-efficient and equally as scalable as conventional steelmaking methods. The plant is fueled by natural gas or hydrogen.

    The company, founded in 2022, plans to break ground early this year on a new plant. The facility will be able to produce more than 9,000 metric tons of steel per year. Continue reading.

    Helix Earth Technologies, Resilitix Intelligence and Fluxworks Inc.

    Helix Earth's technology is estimated to save up to half of the net energy used in commercial air conditioning, reducing both emissions and costs for operators. Photo via Getty Images

    Houston-based Helix Earth Technologies, Resilitix Intelligence and Fluxworks Inc. each secured $1.2 million in federal funding through the Small Business Innovation Research (SBIR) Phase II grant program this fall.

    The three grants from the National Scienve foundation officially rolled out in early September 2025 and are expected to run through August 2027, according to the NSF. The SBIR Phase II grants support in-depth research and development of ideas that showed potential for commercialization after receiving Phase I grants from government agencies.

    However, congressional authority for the program, often called "America's seed fund," expired on Sept. 30, 2025, and has stalled since the recent government shutdown. Continue reading.

    Solidec Inc. (pre-seed)

    7 innovative startups that are leading the energy transition in Houston

    Houston-based Solidec was founded around innovations developed by Rice University associate professor Haotian Wang (far left). Photo courtesy Greentown Labs.

    Solidec, a Houston startup that specializes in manufacturing “clean” chemicals, raised more than $2 million in pre-seed funding in August.

    Houston-based New Climate Ventures led the oversubscribed pre-seed round, with participation from Plug and Play Ventures, Ecosphere Ventures, the Collaborative Fund, Safar Partners, Echo River Capital and Semilla Climate Capital, among other investors. Continue reading.

    Molecule

    Sameer Soleja is the founder and CEO of Molecule, which just closed its series B round. Photo courtesy of Molecule Software.

    Houston-based energy trading risk management (ETRM) software company Molecule completed a successful series B round for an undisclosed amount, according to a July 16 release from the company.

    The raise was led by Sundance Growth, a California-based software growth equity firm. Sameer Soleja, founder and CEO of Molecule, said in the release that the funding will allow the company to "double down on product innovation, grow our team, and reach even more markets." Continue reading.

    Rarefied Studios, Solidec Inc. and Affekta

    Houston startups were named among the nearly 300 recipients that received a portion of $44.85 million from NASA to develop space technology this fall. Photo via NASA/Ben Smegelsky

    Houston-based Rarefied Studios, Solidec Inc. and Affekta were granted awards from NASA this summer to develop new technologies for the space agency.

    The companies are among nearly 300 recipients that received a total agency investment of $44.85 million through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Phase I grant programs, according to NASA.

    Each selected company received $150,000 and, based on their progress, will be eligible to submit proposals for up to $850,000 in Phase II funding to develop prototypes. The SBIR program lasts for six months and contracts small businesses. Continue reading.

    Intuitive Machines 

    Intuitive Machines expects to begin manufacturing and flight integration on its orbital transfer vehicle as soon as 2026. Photo courtesy Intuitive Machines.

    Houston-based Intuitive Machines secured a $9.8 million Phase II government contract for its orbital transfer vehicle in July.

    The contract was expected to push the project through its Critical Design Review phase, which is the final engineering milestone before manufacturing can begin, according to a news release from the company. Intuitive Machines reported that it expected to begin manufacturing and flight integration for its orbital transfer vehicle as soon as this year, once the design review is completed.

    The non-NASA contract is for an undisclosed government customer, which Intuitive Machines says reinforces its "strategic move to diversify its customer base and deliver orbital capabilities that span commercial, civil, and national security space operations." Continue reading.