Here's what Houston startups snagged fresh funding last quarter

following the money

These eight Houston companies raised over $140 million in venture capital investment in Q2 of 2022. Photo via Getty Images

Houston startups are keeping pace when it comes to venture capital raised this year. In this roundup of funding closed in the second quarter, Houston businesses across sectors and industries close significant rounds from seed to series B.

Eight startups raised over $140 million last quarter, according to InnovationMap reporting, which is right on par with Q1's numbers. In chronological order, here's what companies snagged fresh funding recently.

Houston aerospace startup secures $20M series A investment round

Houston-based Venus Aerospace has raised $20 million — and is one step closer to providing one-hour global travel. Photo courtesy of Venus Aerospace

A year after raising $3 million in seed funding, a Space City startup has closed its high-flying series A round to the tune of $20 million.

Venus Aerospace, which is working on a zero-carbon emission spaceplane that will enable one-hour global travel, closed its series A funding round led by Wyoming-based Prime Movers Lab. The firm has a few dozen breakthrough scientific companies in its portfolio, including another Houston-based, space-focused startup, Axiom Space. The round also saw participation from previous investors: Draper Associates, Boost, Saturn 5, Seraph Group, Cantos, The Helm & Tamarack Global.

Venus Aerospace was founded by Sarah "Sassie" and Andrew Duggleby, who serve as the company's CEO and CTO, respectively, in 2020 in California. The Texas A&M University alumni later moved the business into its current facilities in the Houston Spaceport. Click here to continue reading.

Fast-growing energy fintech startup raises $50M series B

The series B capital will allow the company to enhance its core product, while also adding on other workflows that focus on emissions and renewable energy. Image via combocurve.com

Houston-based ComboCurve announced today that it has raised $50 million through a series B funding round led by Dragoneer Investment Group and Bessemer Venture Partners.

Founded in 2017, the company is a cloud-based energy analytics and operating platform that uses sophisticated software to forecast and report on a company's energy assets, including renewables.

The series B capital will allow the company to enhance its core product, while also adding on other workflows that focus on emissions and renewable energy. Click here to continue reading.

Houston medical device startup closes $6M series A

This innovative medical device company has closed $6 million for further product development and clinical trials. Image via Getty Images

A Houston-based medical device company born out of the Texas Medical Center has closed its series A round of funding.

Ictero Medical's oversubscribed $6 million round was led by MedTex Ventures, S3 Ventures, and an undisclosed strategic investor, according to a news release. The company's novel cryoablation system was designed to treat high-risk gallstone disease patients and provide a less invasive and lower risk alternative to gallbladder removal surgery — something over 1 million Americans undergo annually.

“Our technology provides an immediate solution for critically ill patients who currently have no good treatment options, and also has the potential to benefit healthier patients who want to avoid surgery,” says Ictero Co-Founder and CEO Matthew Nojoomi in the release. Click here to continue reading.

Houston entrepreneur adds $1M to seed round

Houston-based Upgrade has raised additional seed funding. Photo via LinkedIn

Houston-based Upgrade Boutique — which uses technology to connect women with high-quality wigs and hair extensions — extended its seed round by $1 million, Fast Company reported. The round's initial seed leaders included Houston-based venture capital firms Artemis Fund and Mercury Fund, as well as Logitech president and CEO Bracken P. Darrell and ANIM.

“This [investment] will enable us to scale even faster and continue to invest in tools and resources that will improve the consumer experience, and help stylists operate more efficiently,” Winters tells Fast Company. “Based on feedback from the stylists on our platform, we see this as a natural development in the company’s evolution.” Click here to continue reading.

Houston startup raises $30M series B, plans to expand its offerings to customers

Growing Houston-based WizeHire tripled its headcount last year and plans to grow even more as it scales up. Photo courtesy of WizeHire

A Houston software company has closed its latest funding round to the tune of $30 million.

WizeHire, a tech-enabled hiring solution for small businesses, announced the closing of its series B round, bringing its total funding to $37.5 million and its valuation to $250 million, according to the news release. The round was led by Tiger Global with participation from prior Houston-based investors Amplo and Mercury.

The pandemic has greatly impacted businesses ability to hire new employees. Founded in 2014, WizeHire launched a free version of its optimized hiring solution at the height of COVID-19. The company also helped small businesses find and apply for refundable tax credits and Payment Protection Program loans to keep their doors open.

“The pandemic was an incredibly tough time for Main Street, and we were right there with them," says Sid Upadhyay, CEO of WizeHire, in the release. "We’re constantly amazed by the depth of our clients’ trust in us and in response, have stepped up to serve them as a trusted advisor in their business growth. We plan to build a marketplace for small businesses to have access to the resources they need to succeed.” Click here to continue reading.

Houston smart bus platform raises $26M to expand operations in Mexico and beyond

This Houston company has rolled out its expansion plans following a $20 million series A. Photo via ridekolors.com

A Houston-based company that's using tech and data to provide its intercity bus network has announced $26 million in funding.

Kolors has announced the close of its $20 million series A financing round led by UP.Partners with participation from Maniv Mobility, Toyota Ventures, K5 Global, Mazapil — plus contribution from existing investors Tuesday Capital, Garret Camp's Expa, Chris Sacca's Lowercase, Moving Capital, MGV, Brainstorm Ventures, Bling Capital and Amplifica. The round, which brings the company's total investment raised to $26 million, will allow Kolors to grow in Mexico, expand into new Latin American markets, and enable cross-border US travel.

The company has created a "smart-bus-platform," which is defined as being a combination of airline and ridesharing style technology. The service includes attendants superpowered by technology, according to a news release.

"Kolors is redefining the experience of intercity travel. We are thrilled to see Kolors advancing in Mexico and bringing its phenomenal service to other parts of Latin America in the coming months this year," says Ally Warson, partner of UP.Partners. "Kolors is thinking about the next phase for intercity bus travel and intends to design an ecosystem that prioritizes the passenger while providing more profitable and climate-friendly outcomes for bus operators." Click here to continue reading.

Tech startup closes seed round at over $3M, plans to grow Houston team

This tech company wants to replace passwords for good. Photo courtesy of Allthenticate

A California-founded company that recently put down roots in Houston has announced the closing of its seed round of funding.

Allthenticate, a tech startup that enables unified authentication, announced over $3 million raised in its seed funding round led by Austin-based Silverton Partners with participation from California-based Amplify and Denver-based Ping Identity. The total raised in the round is $3,133,337, which, as the press release explains, translates to “elite” in hacker speak.

Allthenticate’s technology and services allow users to utilize smartphone devices to unlock and log in to everything — from doors to computers and servers. The company's mission is to provide safe, easy-to-use security infrastructure for everyday use and to target small- to medium-sized businesses to deploy the technology across their workforces. Click here to continue reading.

Houston SaaS startup raises $10M to keep up with customer growth

Houston-based Liongard has fresh funding to work with. Photo via Getty Images

A Houston software company has announced its latest funding.

Liongard, an IT software provider, has raised an additional $10 million led by Updata Partners with contribution from TDF Ventures — both existing investors in the company. The funding, according to a news release, will go toward providing the best customer service for Liongard's growing customer base.

The technology is providing managed service providers, or MSPs, improved visibility across the IT stack and an optimized user experience.

“Since working with our first MSP partners, we’ve seen time and again the power of visibility into IT data, reducing the time they spend researching customer issues and allowing them to respond faster than their peers,” says Joe Alapat, CEO and co-founder of Liongard, in the release. “This investment enables us to continue to achieve our vision of delivering visibility into each element of the IT stack.” Click here to continue reading.

These are the five Houston companies that raised the most in funding this year. Photo via Getty Images

These were the top 5 venture capital deals in Houston in 2021

2021 in review

Editor's note: As 2021 comes to a close, InnovationMap is looking back at the year's top stories in Houston innovation. When it came to the money raised in Houston, these five startups raised the most, according to reporting done by InnovationMap.

Houston chemicals company raises $357M, claims unicorn status

Solugen closed its Series C funding round at $357 million to grow its chemical products. Photo via Getty Images

Houston-based Solugen, a startup that specializes in combating carbon dioxide emitted during the production of chemicals, has hauled in $357 million in a Series C funding round. That amount eclipses the size of any Houston VC funding round this year or last year.

The Series C round lifts Solugen's pre-money valuation to $1.5 billion, according to the Axios news website. This gives Solugen "unicorn" status as a startup with a valuation of at least $1 billion.

Singapore-based GIC and Edinburgh, Scotland-based Baillie Gifford led the round, with participation from Temasek Holdings, affiliates of BlackRock, Carbon Direct Capital Management, Refactor Capital, and Fifty Years.

Since its founding in 2016, Solugen has raised more than $405 million in venture capital, according to Crunchbase.

"Solugen's vision for cleaner chemicals through synthetic biology has the potential to be a fundamental shift in how chemicals are made, to help tackle the environmental challenges we face globally. The chemical market itself is colossal, and Solugen is just getting started," Kirsty Gibson, investment manager at Baillie Gifford, says in a September 9 news release. Click here to read the full article.

Houston space tech company raises $130M series B

Houston-based Axiom Space has raised more funds for its growing commercial space business. Image via axiomspace.com

Just around a year ago, Houston-based Axiom Space Inc. closed a $100 million series A round. Now, the space tech company has announced even more financing as it grows and scales to support a NASA-commissioned project.

Axiom raised $130 million in its series B round led by C5 Capital with support from TQS Advisors, Declaration Partners, Moelis Dynasty Investments, Washington University in St. Louis, The Venture Collective, Aidenlair Capital, Hemisphere Ventures, and Starbridge Venture Capital.

"Axiom Space is a force in the space sector, and it will become a centerpiece of the C5 Capital portfolio and enhance our vision for a secure global future," says C5 operating partner Rob Meyerson, who will join the Axiom board of directors, in a news release. "The Axiom Station will be the infrastructure upon which we will build many new businesses in space, and it will serve as the foundation for future exploration missions to the Moon, Mars, and beyond." Click here to read the full article.

Rapidly scaling Houston e-commerce software startup raises $98M series B

Houston-based Cart.com, which equips e-commerce businesses with a suite of software services, has raised $140 million in venture capital investment since its founding last year. Photo via cart.com

After closing a sizable series A round in April, a Houston tech startup has closed another round of funding — this time a near $100 million one.

Cart.com, an end-to-end e-commerce software startup and Amazon competitor, closed its series B round at $98 million. The investment announcement follows the company's series A in the spring and, according to a news release, brings Cart.com's total funding to $140 million since it launched eight months ago.

"At Cart.com, we believe e-commerce brands should be free to scale up without having to juggle countless outside vendors, and without compromising their unique vision for their brand," says Omair Tariq, CEO of Cart.com, in the release. "Our one-stop platform supports sellers across the full range of e-commerce functionality, empowering them to efficiently scale up and reach new markets using proven, best-of-breed services and technologies." Click here to read the full article.

Note: Cart.com recently relocated its headquarters from Houston to Austin.

Cancer-fighting company based in Houston emerges from stealth and snags $74M in its latest round

Tvardi Therapeutics Inc. has fresh funds to support its drug's advancement in clinical trials. Photo via Getty Images

A Houston-based clinical-stage biopharmaceutical company has raised millions in its latest round.

Tvardi Therapeutics Inc. closed its $74 million series B funding round led by new investors New York-based Slate Path Capital, Florida-based Palkon Capital, Denver-based ArrowMark Partners, and New York-based 683 Capital, with continued support and participation by existing investors, including Houston-based Sporos Bioventures.

"We are thrilled to move out of stealth mode and partner with this lineup of long-term institutional investors," says Imran Alibhai, CEO at Tvardi. "With this financing we are positioned to advance the clinical development of our small molecule inhibitors of STAT3 into mid-stage trials as well as grow our team." Click here to read the full article.

Houston-based cancer and disease bio-venture launches after $38.1M series A

A Houston biotech company has raised $38.1 million. Photo by Dwight C. Andrews/Greater Houston Convention and Visitors Bureau

Sporos Bioventures LLC launched this month after closing a $38.1 million round of series A financing.

The Houston-based biotech company aims to accelerate the development of breakthrough therapies for cancer and immune diseases by sharing resources, capital, access to clinical trial infrastructure, and talent from within its knowledgeable team of biotech executives, entrepreneurs, academic scholars, and investors. The company was launched with four entities: Tvardi Therapeutics, Asylia Therapeutics, Nirogy Therapeutics, and Stellanova Therapeutics.

The most advanced of the four entities, Tvardi, is currently in Phase 1 clinical trial to evaluate it's STAT3 oral inhibitor. It was named a "most promising" life sciences company at the 2020 Texas Life Science Forum, hosted by BioHouston and the Rice Alliance in December. The remaining entities are in the development stages and are focused on cancer, autoimmune disease, fibrosis, and tumor growth, among other conditions.

"Sporos was founded to accelerate the development of new medicines by addressing inefficiencies and risk in the establishment of new biotech companies," Peter Feinberg, Sporos co-founder, said in a statement. "By leveraging our extensive network, including the Texas Medical Center, we first identify transformative scientific opportunities and then deploy our top-tier talent, funding, and operational support to drive these insights into a growing pipeline of first-in-class treatment options." Click here to read the full article.

Here's what factors a VC will consider when evaluating a startup's leadership, according to Rice University research. Photo via Getty images

Houston research: Why venture capital firms might change a startup's leadership

houston voices

Consider the 21st century's most storied CEOs: Steve Jobs, Bill Gates, Jeff Bezos. All have one thing in common – not only did they run their companies, they founded them.

Each of these corporate leaders, in other words, had to deal with venture capital firms to find critical resources for their firm's success. And it didn't always end well. Jobs was famously fired when Apple's board replaced him with the former CEO of a soft drink company – a disaster from which Apple took years to recover.

Even if changing CEOs doesn't always work out, however, it often does. And when VCs invest heavily in a company, they are proactive in making their investment pay off. Uber founder Travis Kalanick, for example, who cofounded the ride-sharing app Uber, was pressured to step down in 2017 after the company was rocked by scandals that included reported sexual harassment.

Though Kalanick's flameout drew global attention, being swapped out is actually commonplace for CEOs of startups, according to Rice Business Professor Yan "Anthea" Zhang. In a new study coauthored with Salim Chahine of the American University of Beirut, Zhang examined data on 1,156 venture-capital-backed U.S. initial public offerings between 1995 and 2013. Out of this sample, they found that 472 firms, or 40.8 percent, changed CEOs between the first round of venture capital financing and the IPO.

Venture capitalists often have strong reasons for swapping a CEO out, Zhang notes. Guiding a company from its startup phase to the initial public offering requires a huge learning curve. Attention must be paid to human resources, efficiency, public relations – hurdles that can stymie even the most successful startup leaders. Just as in public companies, CEO deficiencies in these areas can harm a company's IPO success and its stock value after the IPO.

A range of other factors, some subtle, lie behind VC decisions to change startup leadership, the researchers found. Distance between the startup and the venture capital firm's headquarters is one such factor. If a New York VC firm funds a company in Nevada, monitoring the day-to-day work of the startup is more difficult and costly than if the venture capital firm is based in California.

A CEO directly appointed by a venture capitalist is more likely to be seen as the venture capital firm's agent, allowing the VC firm to directly control the startup, the researchers write. Overall, VC firms unable to closely monitor the startups they funded were more likely to look for new leadership.

The CEO's past experience, described by the researchers as "human capital," is also pivotal. A CEO who has successfully led a prior IPO is much less likely to be replaced than one who hasn't been through the experience, Zhang's team found. Similarly, a CEO with finance/accounting experience, an MBA, or a graduate level degree is likely to be seen as more credible than one who lacks such experience or degree.

Chaotic as it might seem to swap horses midstream, replacing a CEO for one with more experience and education correlates to a better valuation of the public offering, the researchers found.

These findings are particularly timely now, in the era of COVID-19. As businesses turn to Zoom and other remote techniques, VCs may be questioning more than ever how well they can monitor their investments without frequent site visits and in-person meetings. Building a company has always been a heavy lift. When your funder can only measure your work through a screen, surviving as a startup CEO may be tougher than ever.

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This article originally ran on Rice Business Wisdom and is based on research from Yan "Anthea" Zhang, the Fayez Sarofim Vanguard Professor of Management – Strategic Management at Jones Graduate School of Business at Rice University.

2020 brought over $700 million in venture funding deals into Houston, and startups saw larger deals in the first half of the year with a growing interest in angel activity. Image via Getty Images

Report: 2020 brought fewer, larger VC deals for Houston — but angel investment is on the rise

venture capital update

Houston startup's venture capital deals continue to grow in 2020, according to a new report from Houston Exponential. Last year, VC dollars were up, while deal count was down, representing more mature deals coming into the ecosystem — but the second half of the year was defined by a growth in angel investment interest.

The report by Serafina Lalany, chief of staff for HX, found that the Bayou City brought saw $715 million across 117 VC deals, according to Pitch Book data. It's the fourth year Houston has seen VC growth, and last year the city reported over $563 million across 168 deals.

"Houston has put concerted efforts into building its innovation ecosystem," says Harvin Moore, president of HX, in a release, "and 2020's record-breaking results show we are seeing not only resilience in the tech sector, but a significant increase in the rate of formation and success of growth-stage companies, which have an outsized effect on our local economy in terms of high paying job potential and Houston's increasing attractiveness as a great place to work."

Last August, HX published a report on the first half of the year and that study found that Houston — facing the challenges of both the pandemic and the oil price drop — managed to see a 7 percent increase in funding compared to the national average of 2.5 percent. With the second half of the year, the city's VC increase from last year was over 25 percent and up 252 percent since 2014.

The other difference between the first and second halves of the year for Houston VC was the stages of the deals made. Most of Houston's larger deals took place in the first and second quarters — and even the beginning of Q3 — of 2020:

But the second half of the year seemed like Houston's earlier stage VC activity returned, and Blair Garrou, managing partner at Houston-based Mercury Fund, confirmed this to InnovationMap on the Houston Innovator's Podcast in December.

"Seed rounds have definitely bounced back. We're seeing a lot of seed activity, because there's been a lot of seed funds raised," Garrou said on the podcast, adding that he's observed an increase in angel investment interest. "People are realizing that money is in innovation and tech — especially in software."

In her report, Lalany found that in Houston, angel investments are out-pacing seed, creating a "competitive environment."

"The addition of multi-stage and nontraditional investment firms into the arena has created upward pressure in deal valuations and sizes. The average seed round in 2015 was $1 million, whereas today it's double that," the report reads. "With these firms turning inward to focus on protecting their current investments at the start of the pandemic, the propensity for smaller, more riskier investments have declined."

Stephanie Campbell, managing director of the Houston Angel Network, said she's seen a rise in new membership for the organization. Last August, she was on track to get to 150 members — up from just 60 in 2018.

"Despite COVID, we've continued to grow," Campbell told InnovationMap, adding that she's heard investors express that they have more time now to dive in. "People are very much still interested in learning about deploying their capital into early-stage venture. They're looking for a network of like-minded individuals."

In contrast to this early stage activity, the VC activity that was still occurring was defined by larger deals. With VC essentially halting in March and April — especially in cities like Houston, Garrou adds — it makes sense that investors wanted more "sure things" and would invest more funds into companies they already know, versus being able to source new deals in person.

"When you go to later stages, there are a lot fewer deals going on," Garrou continues on the podcast. "Now, there may be larger investments being made, but I think they are into fewer companies, and I think that's just due to the the pandemic and the ability just to not be able to do face-to-face."

As Houston moves through 2021, the city is poised well for more growth and a continued diversification from just oil and gas, as Moore says in the release.

"Houston Exponential was created four years ago by civic and business leaders to deal with an existential problem: our dependence on the energy and medical sector without a thriving startup culture to lead us towards a future that will look very different from the past," he says. "COVID and the de-carbonization movement have made that need much more urgent — it's both a huge challenge and an enormous opportunity."

Finding funding might be harder during the pandemic. But there are some startups thinking outside the box to attain theirs. Miguel Tovar/University of Houston

How Houston startups can find funding in the age of coronavirus

Houston voices

Almost eight months in to the pandemic and many startups are still fighting to survive. Finding funding has become harder in an era the New York Times calls "The Great Unwinding." But not every startup is succumbing to a bleak fate. Some have shown unique strategies for attaining funding. Here, we'll delve into a few examples of startup companies whose founders have managed to snag funding and stay afloat amid the crashing waters of coronavirus.

Government contracts

Payam Banazadeh, CEO of Capella Space, told Graham Winfrey, senior technology editor for Inc., that it would behoove tech startups to look into acquiring government contracts if possible. His Silicon Valley-based satellite communications startup snagged a lucrative government contract with the Department of Defense. "The government seeks startups that are doing unique things. If they find a product they like, they're going to pursue it. Government contracts help raise additional funding while also de-risking companies in the eyes of investors," Banazadeh said.

Funding conversations matter

Nesh is a company based in Houston that acts as a smart assistant for the energy industry. The startup spent the pandemic engaged in conversations with potential investors. "It's easier to talk to investors at this time. We've had more conversations in the past few months than all of 2019, but nobody is willing to write checks just yet," said Sidd Gupta, founder of Nesh, to Crunchbase News, a tech startup-centric outlet.

The Houston-based company also pivoted by expanding into other oil and gas areas like renewables. Nesh even decided to make its platform accessible free of charge during the shutdown.

Take matters into your own hands

Laally is a breastfeeding assistance device company. During their funding strategizing, they examined all the usual funding avenues: VC, angels, debt, non-profit and potential partnerships with bigger entities. Most of these sources asked for proof of concept and a proven history of solid sales before even thinking of putting money on the table.

Well, that wasn't possible for founders Max and Kate Spivak. They decided to go it alone. Self-funding. "As a family and rookie entrepreneurs, we made the decision to put our money in the balance and hire a partner for the tech part of the business," Max Spivak said told Crunchbase News.

"Even when things got rough as the pandemic worsened, and they did get very rough for us, we didn't have pressure from investors to liquidate assets or investors demanding their money back. That's because we were our own funders," said Kate Spivak.

Creativity can conquer COVID-19

Sometimes adversity is the mother of creativity. These three startup founders stepped outside the box of traditional funding strategies. They discovered ways to change their companies and attain funding during a pandemic that has its foot on the neck of the economy.

Thanks to people like Sidd Gupta, Payam Banazadeh, and the Spivaks, startup founders have a better idea of what they need to do for their startups to live another day. For their companies to see a light at the end of an 8-month long tunnel. The pandemic might have our faces covered, our friends at arm's length, and our jobs in limbo. But it cannot strip away the power of human ingenuity, innovation, and creativity. The founders named above are walking proof.

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This article originally appeared on the University of Houston's The Big Idea. Rene Cantu, the author of this piece, is the writer and editor at UH Division of Research.

Trivie has closed a $5 million investment round led by Houston-based Cottonwood Venture Partners. Photo via Trivie.com

Houston investment firm leads Texas startup's $5M series A round

money moves

A Texas-based tech startup that has created an artificial intelligence-enabled tool that gamifies corporate training and education has closed its most recent funding round thanks to a Houston investor.

Trivie as announced its $5 million series A investment round led by Houston-based Cottonwood Venture Partners, an investment firm that has a portfolio of technology companies that are providing digital solutions within the energy industry. Trivie will use the new funds to scale its product and expand across industries, from energy and manufacturing to hospitality, healthcare, consumer goods, and more.

"The Trivie team's success to date has been remarkable and we are humbled to partner with them to expand Trivie's reach as organizations increasingly look to maximize knowledge retention, particularly as it relates to health and safety," says Jeremy Arendt, managing partner of CVP, in a news release.

Now, as more employees are working from home than ever before, relevant training is crucial and at the top of mind for business leaders. Trivie's clients include Subway, Phillips66, Anheuser-Busch, to name a few.

"At Trivie, our mission is to ensure that every employee at every organization can be at their very best because what they have been taught, they remember, and what they have said is understood," says Lawrence Schwartz, CEO, and co-founder at Trivie, in a news release. "We are extremely excited to partner with Cottonwood Venture Partners to help us expand our footprint in the Fortune 1000 and to continue to execute on that mission."

One of Trivie's founders, Leland Putterman, who is based in Houston, first had the idea for a consumer-facing trivia game 18 years ago. When the app rolled out in 2013, it garnered more than three million downloads. As COVID-19 has brought new compliance guidelines to the forefront of every industry, Trivie was quick to make the CDC's coronavirus guidelines available to all of its clients for no additional charge to be used across their entire employment bases.

Additionally, Trivie prioritizing its user's ability to connect in a time of social distancing and working from home.

"The only way to maintain that company culture and close communication with confidence is to use something like Trivie," Putterman previously tells InnovationMap. "There's no feedback loop right now. The only way to bridge that gap is to have something like Trivie that's the glue."

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Baylor College of Medicine launches VC fund to invest in biotech startups

fresh funding

Houston’s Baylor College of Medicine just unveiled a new venture capital fund that backs early-stage biotech startups—and it’s already made its first investment.

BCM Legacy Fund I, funded by philanthropies, invested an undisclosed amount in Houston biotech startup Nemea Therapeutics. Nemea, a spinout of the Baylor College of Medicine and Germany’s Lead Discovery Center, is developing an oral drug to treat metastatic triple-negative breast cancer that no longer responds to currently available therapies.

This type of aggressive cancer spreads from the breast to other areas of the body, such as the bones, liver, lungs or brain. Roughly 38,000 to 57,000 Americans are diagnosed each year with metastatic triple-negative breast cancer. One study showed about half of patients survive past the one-year mark following diagnosis and about one-third survive two years.

“Baylor College of Medicine’s laboratories produce discoveries with the potential to change patients’ lives, and too many of them stall where academic funding ends and private investment has not yet begun,” Dr. Jakub Tolar, president, CEO and executive dean of the Baylor College of Medicine, said in a press release. “The BCM Legacy Fund fills that gap, giving our scientists a path to advance their discoveries to patients.”

The National Institutes of Health awards more than $36 billion per year for biomedical research in the U.S., Baylor said. But some biomedical discoveries “never leave the starting line because they don’t yet fit the economics of venture capital,” the college said.

“The forefront of a new model”

The BCM Legacy Fund aggregates philanthropic capital from private foundations and donor-advised funds. It then invests in startups so they can move beyond that starting line and into later-stage investment rounds. The Greater Houston Community Foundation is the fund’s philanthropic partner.

“It’s exciting to be on the forefront of a new model for philanthropic capital,” said Houston entrepreneur and investor Burton Hanson, managing partner of the fund.

“Not only do we hope to solve a real problem by advancing these therapies to the patients who need them most, but we also hope this model will inspire others in the city and beyond toward philanthropic creativity and a posture of ‘I sacrifice; we win.’”

The fund expects to invest in about 15 early-stage startups over a five-year span. Baylor declined to divulge the amount of money in the fund and the size of the investment in Nemea.

Nemea’s “world-class chemistry”

Hanson oversees the Baylor fund alongside Chicago investor Steve Lehmann, who led the University of Chicago’s Innovation Fund.

Lehmann said Nemea, the fund’s first portfolio company, “has world-class chemistry, Baylor biology, and patients with no good options. Our job is to fund the experiments that carry it to the next handoff, so that industry and later-stage investors can take it from there.”

Based at Houston’s massive Texas Medical Center, Nemea plans to start clinical trials next year in collaboration with Baylor’s Lester and Sue Smith Breast Center.

Nemea previously received $9 million from the Lead Discovery Center and a $1.6 million grant from Baylor. Last year, the startup said it was seeking $25 million to $30 million in seed and Series A funding.

Debra McCoy of Houston, a former managing director at BlackRock and former partner at Bain & Co., and Paul Thomas, co-founder and CEO of Spring-based benefits manager Luscinia Health, sit on the Baylor fund’s governing board. Dr. Paul Klotman, former president, CEO and executive dean of Baylor, is a senior strategic adviser.

How does the fund find investment targets?

The Baylor Legacy Fund relies on two tools to help unearth early-stage biotech startups:

  • High-resolution “innovation maps” of research institutions. These maps surface hidden clusters of innovation, identify rising-star researchers and tie pockets of “innovation supply” at Baylor to areas of “innovation demand” in biotech.
  • AI-enhanced due diligence. AI agents assist with due diligence of early-stage biotech startups. The fund says the platform “distills the frameworks we’ve developed over a decade of teaching and investing into a flexible … diligence environment.”

MD Anderson unveils $3.4B expansion with two new Houston cancer care facilities

major expansion

The cutting edge of cancer-fighting technology and science is getting even sharper after MD Anderson announced last week that it will open two new facilities in the Texas Medical Center within the next five years. Inspiration Tower and Prism will expand MD Anderson’s annual patient load in the TMC to 250,000 annually and will incorporate a variety of new techniques.

The $3.4 billion project will add 2 million square feet to MD Anderson's TMC footprint, bringing its total campus size to 22 million square feet by 2032. Located at the corner of Fannin Street and Holcombe Boulevard, the cancer center says the two new facilities will serve as its new "front door" to the TMC.

“Every detail of these buildings, from the technology to the treatment rooms, was designed around our patients who will receive their care in them and our employees who will work in them. The facilities will serve as a physical representation of hope for the patients and their families who will walk through the doors,” Dr. Jeffrey E. Lee, president ad interim of UT MD Anderson, said in a news release. “Inspiration Tower and Prism are the future of cancer care, and we are grateful for the longstanding support and guidance we’ve received from the UT System Board of Regents to bring these projects to life. These facilities are part of the most impactful capital expansion in UT MD Anderson’s history.”

Prism is especially exciting as it will represent fully half of the linear accelerator treatment in the TMC. Linear accelerator is a radiation treatment that uses magnetically charged fields to deliver targeted external radiation therapy, like shooting cancer with a rail gun. The treatment is safer and has fewer side effects than older radiation treatments.

In addition, Prism will contain 12 MRI machines, four CT scanners, two PET-CT units, 18 radiation vaults and seven radiation simulators. Patient comfort has also been put at a premium with multiple gardens and roof overlooks.

“Every patient we treat deserves an environment that reflects the excellence of the care they receive at UT MD Anderson,” Chris McKee, executive vice president and chief strategy officer at UT MD Anderson, added in the release. “Our new facilities will be innovative, agile, adaptable and beautiful, and they will allow us to care for more patients, more effectively – in an environment that enhances healing and well-being. We are building for our future and for every patient who will be counting on us.”

Prism is slated to open in 2030.

Inspiration Tower will have 25 floors of surgical, diagnostic, and treatment services. At 1.4 million square feet, it’s currently expected to be the largest cancer-specific treatment facility in the United States. The tower will be divided into units for specific types of cancer, making it easy to integrate the advancing research being done all over Houston.

Like Prism, Inspiration Tower is specifically designed to offer comfort and reassurance, with more garden space, terraces, and beautiful scenery to ease patient distress. It is expected to open in 2032.

Tesla will pull the plug on Cybertruck production at Texas factory in 2027

Tesla Talk

Tesla’s Cybertruck, the hulking, stainless-steel pickup that inspired devotion and derision with its science-fiction looks, will cease production next year.

CEO Elon Musk announced the model’s demise Friday, November 6, with a curt post on X, his social media site, simply noting production of the vehicle “will be winding down” around the middle of 2027 at its facility outside Austin, Texas. Musk said the move was to allow increased production of its Cybercab robotaxi.

For the Cybertruck, a pet project of Musk who insisted it was Tesla’s best product, it marks an unceremonious end to one of the auto industry’s most ballyhooed debuts.

“Few vehicles in history have generated as much attention,” said Armen Hareyan, whose Torque News site covers autos. “The Cybertruck became a cultural symbol – loved, mocked and impossible to ignore.”

The Cybertruck rolled onto the scene in a dramatic unveiling in 2019, when a Tesla designer hurled a metal ball at the vehicle to demonstrate its supposedly unbreakable glass, only to see it shatter. He repeated the stunt on another window of the truck only to shatter that one, too.

Even as some critics scoffed, Musk was steadfast.

“I just wanted to make a futuristic battle tank — something that looks like it could come out of ‘Blade Runner’ or ‘Aliens’ or something like that but was also highly functional,” he told Automotive News. He called it “a better sports car than a Porsche 911” and “a better truck than an F-150.”

It struck some as the perfect vehicular reflection of the brash, convention-busting Musk.

“A really controversial vehicle unveiled by a controversial individual into a market where none of the electric trucks have been able to really capture demand,” said Spencer Penn, a former Tesla executive who left the company before the Cybertruck’s launch and now heads software developer LightSource.

Penn remembered watching the unveiling and feeling initially revolted by the sight of the Cybertruck, calling its appearance “madness.” But the more he looked at it, the more his opinion changed. He signed up for a pre-sale reservation, though ended up not getting a Cybertruck when Musk’s promises of a price tag under $40,000 went unmet and the first trucks sold for double or more. Penn called the Cybertruck part of Tesla’s adventurous spirit that drives innovation.

“Some of these bets work and some of these bets don’t,” he said.

While the decision to end Cybertruck production may be driven by sales realities, it's also a reflection of Tesla’s shift to autonomous vehicles, on which Musk is betting the company’s future.

Musk once forecast he’d make 250,000 Cybertrucks a year. Kelley Blue Book estimated Tesla sold just 20,237 of the vehicles last year, down about half from the year prior. Sales through the end of September this year were down another 28%, according to Kelley Blue Book.

If the imposing, sharp-angled, dystopian appearance of the Cybertruck weren’t enough to turn many potential buyers away, Musk did so himself by allying with a panoply of right-wing figures, most notably U.S. President Donald Trump. He alienated some customers as his image morphed from eccentric innovator to polarizing force trading his billions for political influence.

Once-passionate Tesla drivers rushed to sell off their cars, or slapped stickers on the bumper declaring, “I bought this before Elon went crazy.” Organizers staged demonstrations outside Tesla showrooms and urged investors to dump shares of the company’s stock. Anger spilled into violence, with Molotov cocktails hurled at Tesla vehicles, charging stations set ablaze, and dealerships covered in graffiti.

Lovers of the Cybertruck became targets, too, subjected to shouts of “Nazi!” and extended middle fingers.

Ross Blankenship is one of them. When he first laid eyes on the Cybertruck, he felt transported to a world from his childhood, when he would play “Halo,” the sci-fi video game. He had to have it.

“I had that sort of child in me wanting to be part of something cool that would change the future of automotive,” Blankenship said in a call from his Cybertruck as he drove through Sunnyside, Colorado. Even as Blankenship found he agreed with Musk on politics, he hated seeing a vehicle he loved turned into a political symbol. “I never bought it for any other reason than the fascination with the future technology of trucks … so that was a little heartbreaking.”

He would buy another Cybertruck again in a heartbeat, calling its end “a sad moment.”

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