Houston health cos. sweep at competition, startups announce new deals, and more innovation news

short stories

Several Houston startups claimed the top prizes at a recent competition — plus more Houston innovation news you may have missed. Photo courtesy of TNVC

It's been a busy season for the Houston innovation ecosystem, and for this reason, local startup and tech news may have fallen through some of the cracks.

In this roundup of short stories within Houston innovation, a consumer packaged goods startup is now on shelves across Texas, a Texas energy company gets fresh funding from Houston VCs, Texas Medical Center Innovation companies sweep at a recent competition, and more.

Houston health care startups sweep recent competition

Houston-based Starling Medical took home the top prize at a recent competition. Photo courtesy of TNVC

At the 2021 Texas A&M New Ventures Competition, several Houston companies claimed top prizes — essentially sweeping the competition. The top three winners were all member companies of Texas Medical Center Innovation:

  • First Place Finalist: Houston-based Starling Medical – $50,000
  • Second Place Finalist: Houston-based Ictero Medical – $35,000
  • Third Place Finalist: Koda Health – $25,000
Other Houston-area award winners included:
  • Fourth Place Finalist: Microsilicon – $15,000
  • Sixth Place Finalist: CodeWalker – $5,000
  • Elevator Pitch First Place: EmGenysis – $5,000
  • Elevator Pitch Fourth Place: TYBR Health – $1,00
Click here to view more details on the 2021 award results.

Houston CPG company scores Central Market placement

Central Market now carries this Houston startup's baked goods. Photo courtesy of ChipMonk Baking

As of this month, Central Market shoppers in Texas can purchase Houston-based ChipMonk Baking products products. Additionally, the company announced it has added added 1,100 square feet to its existing 2,300 square-foot facility.

Founded by David Downing and Jose Hernandez, ChipMonk Baking, is a local, mail-order bakery that makes cookies, brownie bites, and other snacks using monk fruit and allulose, a low-calorie (0.4 calories per gram) rare sugar that's found naturally in foods such as raisins, dried figs, and kiwi.

The nine open Central Market locations throughout Texas will carry all nine flavors of ChipMonk's Keto Cookie Bites.

"Here in Houston, ChipMonk is the healthy option — there is nothing else like our products being made in a city that's known around the world for food," says Downing in a press release. "When you consider Houston's diversity and international culinary reputation, the lack of local health-food representation and production just doesn't make sense. We love this city and are working to change that."

Houston Methodist doles out $2.5 million in grants

Houston Methodist has contributed a couple million dollars to Houston nonprofits. Courtesy of Methodist Hospital/Facebook

Houston Methodist announced a couple weeks ago that it has awarded nearly $2.5 million in community grant investment to 37 Houston-area nonprofit organizations, according to a news release from the health care organization.

Over 177 Houston nonprofits applied for the Houston Methodist Diversity, Equity & Inclusion Grant Program, a program created last year to address the social determinants of health that lead to health inequities within racial, ethnic and social minorities.

"We continuously strive to build and maintain a diverse, equitable and inclusive environment both within our hospital walls and within our communities," says Arianne Dowdell, vice-president, chief diversity, equity and inclusion officer at Houston Methodist, in the release. "The grant program and all the deserving organizations awarded funds are critical in shaping our community, which Houston Methodist has proudly supported for decades. We look forward to fostering the growth and development of meaningful programs that will benefit underserved and underrepresented groups in Houston."

The program, which includes both DEI Grants and Social Equity Grants, is funded by a $25 million fund established by Houston Methodist to be doled out over five years to support underserved communities.

Innovative energy company receives funding from Houston venture capital

Houston-based Cottonwood Venture Partners and Chevron Technology Ventures have again invested in this Austin-area energy company. Photo courtesy of Getty Images

Two Houston venture capital groups recently went in on Round Rock, Texas-based Infinitum Electric's $40 million series C funding round. Houston-based Cottonwood Technology Fund and Chevron Technology Ventures — both existing investors for the company — doubled down on their support in the new round led by San Francisco-based Energy Innovation Capital.

The fresh funds will allow the company to scale production of its ultra-high-efficiency, lightweight motors and "expand production of the company's IEs Series motors for commercial and industrial applications and complete development of its IEm Series motors for the rapidly growing electric vehicle market," according to the company's news release.

"We're excited to ramp production of our motors after seeing significant demand in the commercial HVAC and industrial markets, as well as the growing interest from electric vehicle suppliers who see the potential a highly efficient, lightweight motor can deliver," says Ben Schuler, founder and CEO of Infinitum Electric, in the news release. "Partnering with Energy Innovation Capital, Rockwell Automation and our existing investors allows us to scale and power machines more efficiently and sustainably."

Houston nanotechnology startup scores distribution deal

Houston-based NanoTech, currently housed in Halliburton Labs, has a new distribution agreement. Photo via halliburtonlabs.com

NanoTech has announced a new distribution agreement with Warrior Ace Hardware, a supplier of specialty products for the commercial and residential building industries. NanoTech uses material science to create NanoShield, a fire-proofing and insulation product.

The new partnership offers a key opportunity for NanoTech, which recently closed a $5 million round of funding.

"Ace Hardware has close to 100 years of distribution and retail experience. We are excited to partner with such a respected brand to get us one step closer to saving a tremendous amount of lives, protecting infrastructure, and reducing energy consumption," says Mike Francis, CEO of NanoTech in a news release.

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Houston investor on why 2025 will be the year of exits

houston innovators podcast episode 270

Samantha Lewis will be the first to admit that the past few years have been tough on startups and venture capital investors alike. However, as she explains on the Houston Innovators Podcast, the new year is expected to look very different.

"We're super excited going into 2025," says Lewis, who is a partner at Houston-based VC firm Mercury. "For us, 2024 was a year of laying a lot of groundwork for what we believe is going to be a massive year of startup exits and liquidity for the venture ecosystem. We've been hard at work making sure our companies are prepared for that."

Mercury, in fact, has already gotten a taste, with three of its portfolio companies celebrating exits — all with Houston roots. Fintech platform Brassica was acquired by BitGo in February, and Apparatus, founded as Topl in Houston, was acquired early last year. The third deal has yet to be announced publicly.

And it's just getting started, Lewis says. She explains that all of the companies in Mercury's portfolio that are promising — albeit not break-out, to-be-billion-dollar companies — are going to have opportunities to sell in 2025 and 2026.

"What we've started to do — and I encourage everyone to do this if you're working on a startup — is just start to just engage with strategic buyers, investment bankers, and people you think might be a great fit to buy your company," Lewis says, "because we really think that the next few years will be the best liquidity years we've seen in a really long time. And if you're not ready for it, you're going to miss the boat."

In addition to sharing her advice to get "exit preparedness," Lewis explains some specific tech trends she's keeping an eye on in Mercury's "power theme," which she works on directly. This encompasses fintech, blockchain, web3 and more.

Houston private equity firm beats target on first investment fund

fresh funds

Houston-based private equity firm Sallyport has raised $160 million for its first investment fund, exceeding the target amount by $10 million.

The Sallyport Partners Fund focuses primarily on investments in founder- and family-owned businesses, corporate carve-outs and startups in various industries.

The firm’s chairman, Doug Foshee, seeded the fund. He and managing partners Kyle Bethancourt and Ryan Howard started the firm in 2023.

“Sallyport Partners Fund was created to utilize the proven processes our team has developed over time to generate value for like-minded investors on a larger and more impactful scale,” Foshee says in a news release.

Investors in the Sallyport fund include entrepreneurs, business executives and influential Texas families. Aside from Foshee, names of the fund’s investors weren’t disclosed.

“We are deeply committed to working hand-in-hand with management teams to drive transformative growth and generate long-term value,” says Bethancourt. “Our operational capabilities are forged from decades of firsthand experience leading, investing in, and building thriving businesses from the ground up. We have a unique appreciation for the management team’s perspective because we’ve been in their shoes.”

Those shoes have covered some pretty impressive ground:

  • Foshee is former chairman, president, and CEO of Houston-based El Paso Corp., which owned and operated a 44,000-mile natural gas pipeline network. In 2012, El Paso merged with Houston-based pipeline company Kinder Morgan in a multibillion-dollar deal.
  • Before Sallyport, Bethancourt was a vice president in the credit division of Blackstone, an investment powerhouse with more than $1 trillion in assets under management. Earlier, he worked at D.E. Shaw & Co., a New York City-based hedge fund with more than $65 billion in assets under management.
  • Before Sallyport, Howard worked at Platform Partners, a Houston-based private equity firm. Earlier, he worked for the natural resources arm of investment banking giant Goldman Sachs.

Houston university students earn top honors at global energy-poverty competition

Winner, winner

A student-led team from the University of Houston and Texas A&M University took home top prizes at last month's Switch Energy Alliance Case Competition.

Competing virtually against 145 teams from 34 countries, the students, known as The Dream Team, won third place for their plan to address energy poverty in Egypt and Turkey. They were awarded $5,000 in prize money.

The competition challenges student teams to solve real-world energy problems to "drive progress towards a sustainable and equitable energy future," according to the Switch competition's website.

“The Switch competition tackles major issues that we often don’t think about on a daily basis in the United States, so it is a really interesting and tough challenge to solve,” Sarah Grace Kimberly, a senior finance major at UH and member of the team, said in a statement from the university

Kimberly was joined by Pranjal Sheth, a fellow senior finance major at UH, and Nathan Hazlett, a finance graduate student at TAMU with a bachelor’s degree in petroleum engineering.

The Dream Team developed a 10-year plan to address Egypt and Turkey's energy poverty that would create 200,000 jobs, reduce energy costs and improve energy access in rural areas. Its major components included:

  • Developing rooftop and utility-scale solar farms and solar canopies over irrigation canals
  • Expanding wind power capacity by taking advantage of high wind speeds in the Gulf of Suez and Western Desert
  • Deploying cost-efficient technologies along the Nile for rural electrification

“People in the United States should be extremely thankful for the infrastructure and systems that allow us to thrive with power, food and water,” Sheth said in the statement. “Texas went through Winter Storm Uri in 2021—people were without electricity for weeks, and lives were lost. It still comes up in conversations, but certain regions of the world, developing nations, live that experience almost every day. We need to make that a larger part of the conversation and work to help them.”

Team Quwa, a team of four students from the University of Texas at Austin, took home second place and $7,000 in prize money.

“This journey was both intellectually enriching and personally fulfilling,” Mohamed Awad, a PhD candidate at the Hildebrand Department of Petroleum and Geosystems Engineering, said in a statement from UT. “Through the case competition, we had an opportunity to contribute meaningful ideas to address a critical global issue.”

Team Energy Nexus from India earned the top prize and took home $10,000, according to a release from Switch.

Switch Energy Alliance is an Austin-based non-profit that's focused on energy education. The Switch competition began in 2020. Teams of three to four students create a presentation and 15-minute video. The top five teams present their case studies live and answer questions before a panel of judges.

More than 3,200 students from 55 countries have competed over the years. Click here to watch the 2024 final round.

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This article originally ran on EnergyCapital.

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