According to a new report, Houston is one of the top cities for funding for sustainability companies. Photo via Getty Images

From a financial standpoint, Houston appears to be a sustainable environment for sustainability-focused startups.

An analysis by PromoLeaf, a retailer of sustainable promotional products, finds that Houston ranks fourth among U.S. cities for the average funding raised by locally based startups in the sustainability sector, according to Crunchbase data.

Per the report, the Bayou City attracts $150.7 million in sustainability funding for startups. Ahead of Houston are Salt Lake City with $204.5 million; Santa Monica, California, with $154.3 million; and Fremont, California, with $153.4 million.

PromoLeaf’s analysis features cities where at least 20 companies are focused on sustainability.

The analysis indicates Houston has 20.6 sustainability startups per 100,000 residents. Ranking first in that regard is Boulder, Colorado (115 per 100,000 residents).

While Houston trails Boulder by a long distance, it fares well among the Texas cities in the analysis:

  1. Austin, 26.2 sustainability startups per 100,000 residents
  2. Houston, 20.6 sustainability startups per 100,000 residents
  3. Midland, 18.8 sustainability startups per 100,000 residents
  4. Plano, 11.9 sustainability startups per 100,000 residents
  5. Dallas, 11 sustainability startups per 100,000 residents
  6. Fort Worth, 5.3 sustainability startups per 100,000 residents
  7. San Antonio, 5.2 sustainability startups per 100,000 residents

PromoLeaf says more than 21,600 sustainability startups operate in the U.S. They’re in the renewable energy, recycling and pollution control, environmental engineering, green consumer goods, and environmental consulting industries.

The analysis shows Houston has:

  • 13.7 renewable energy startups per 100,000 residents
  • 5.8 recycling and pollution control startups per 100,000 residents
  • 3.5 environmental engineering startups per 100,000 residents
  • 2.9 environmental consulting startups per 100,000 residents
  • 0.70 green consumer goods startups per 100,000 residents

According to the Greater Houston Partnership, renewable energy startups leading Houston’s energy transformation include Energy Transition Ventures, Fysikes Biosolutions, Ionada, Katz Water Technologies, Pressure Corp., and Renewell Energy.

“A dynamic business climate combined with growth in venture capital funding in Houston has created fertile ground for companies of all stages aiming to power our world through the global energy transition,” the partnership says. “As the Energy Capital of the World, Houston has become a hub for startups and venture capital firms investing in the region’s energy future.”

Outside the energy sector, Houston startups like Trendy Seconds also are making their mark in sustainability. The company runs an online marketplace where women can find preowned clothing or shop for new clothing from sustainable brands.

“Our ultimate goal is to make responsible consumption super easy,” Maria Burgos, founder of Trendy Seconds, told InnovationMap last year.

Houston Exponential released a new report on venture capital activity in the Bayou City. Sky Noir Photography by Bill Dickinson/Getty Images

Report finds Houston is 3rd fastest growing tech ecosystem

show me the money

In the startup world, small funding deals are a big deal in Houston.

A new Houston Exponential analysis based on data from PitchBook shows early-stage and angel rounds accounted for 151 venture capital deals under $5 million last year. Nearly two-thirds of those VC deals were less than $1 million.

Thanks to that robust activity, Houston now ranks as the third-fastest-growing tech ecosystem for early-stage companies in the country, according to the analysis.

Meanwhile, last year’s overall VC deal count exceeded 200 for the first time, “a harbinger of future growth potential as new company creation continues to explode,” the analysis says.

Texas Medical Center is contributing to that explosion. It recently raised the size of its TMC Venture Fund to $50 million. TMC says the fund now will be able to back a wider range of early-stage startups.

“When we launched the TMC Venture Fund, our goal was to drive collaboration and entrepreneurship, and establish Texas as a life science hub,” William McKeon, president and CEO of TMC, says in a news release. “Our initial investment was extremely successful, and this influx of capital creates a unique opportunity for TMC to invest in companies in the earliest stages of commercialization, further bolstering Houston’s thriving life science community.”

Although Houston’s average early-stage deal size of $18 million remains shy of the national average of $21 million, that still represents a 68 percent growth rate since 2019, according to the analysis from Houston Exponential, an entrepreneurship hub. Compared with the national growth rate of 23 percent, “this demonstrates the broader expansion and maturities within the Houston ecosystem,” the analysis says.

The size of deals at the Series A and Series B levels also is on the rise. According to the analysis, the median Series A round in Houston grew from less than $3.2 million in 2020 to more than $10 million in 2021. The size of Series B rounds rose 35 percent, from a median of $13.6 million in 2020 to $21 million in 2021.

While those numbers are impressive, mega-deals stole the spotlight in 2021. Six Houston companies raised at least $100 million last year, with three of those deals surpassing $300 million. Collectively, Axiom Space, Cart.com (now based in Austin), HighRadius, Lancium, Solugen, and Vyripharm Biopharmaceuticals raised $1.3 billion last year.

Last year’s mega-deals brought the number of Houston unicorns, including Cart.com, to five. Unicorns are startups valued at $1 billion or more. In Houston, the newest members of that club are Solugen, with a $357 million Series C round in 2021, and Cart.com, with a $240 million Series B1 round last year.

“That VC-backed companies were able to generate such enormous value in 2021 during a time characterized by great uncertainty and extraordinary circumstances highlights the continued importance of VC-backed companies to the resilience of Houston’s economy,” says Serafina Lalany, executive director of Houston Exponential.

Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

How this Houston innovator's tech is gearing up to impact EV charging, energy transition

houston innovators podcast episode 172

With more and more electric vehicles on the road, existing electrical grid infrastructure needs to be able to keep up. Houston-based Revterra has the technology to help.

"One of the challenges with electric vehicle adoption is we're going to need a lot of charging stations to quickly charge electric cars," Ben Jawdat, CEO and founder of Revterra, says on the Houston Innovators Podcast. "People are familiar with filling their gas tank in a few minutes, so an experience similar to that is what people are looking for."

To charge an EV in ten minutes is about 350 kilowatts of power, and, as Jawdat explains, if several of these charges are happening at the same time, it puts a tremendous strain on the electric grid. Building the infrastructure needed to support this type of charging would be a huge project, but Jawdat says he thought of a more turnkey solution.

Revterra created a kinetic energy storage system that enables rapid EV charging. The technology pulls from the grid, but at a slower, more manageable pace. Revterra's battery acts as an intermediary to store that energy until the consumer is ready to charge.

"It's an energy accumulator and a high-power energy discharger," Jawdat says, explaining that compared to an electrical chemical battery, which could be used to store energy for EVs, kinetic energy can be used more frequently and for faster charging.

Jawdat, who is a trained physicist with a PhD from the University of Houston and worked as a researcher at Rice University, says some of his challenges were receiving early funding and identifying customers willing to deploy his technology.

Last year, Revterra raised $6 million in a series A funding round. Norway’s Equinor Ventures led the round, with participation from Houston-based SCF Ventures. Previously, Revterra raised nearly $500,000 through a combination of angel investments and a National Science Foundation grant.

The funding has gone toward growing Revterra's team, including onboarding three new engineers with some jobs still open, Jawdat says. Additionally, Revterra is building out its new lab space and launching new pilot programs.

Ultimately, Revterra, an inaugural member of Greentown Houston, hopes to be a major player within the energy transition.

"We really want to be an enabling technology in the renewable energy transition," Jawdat says. "One part of that is facilitating the development of large-scale, high-power, fast-charging networks. But, beyond that, we see this technology as a potential solution in other areas related to the clean energy transition."

He shares more about what's next for Revterra on the podcast. Listen to the interview below — or wherever you stream your podcasts — and subscribe for weekly episodes.


Report: Houston's hot medical office market might be on track to cool

by the numbers

Houston’s medical office market is on a roll.

A report from commercial real estate services company JLL shows net absorption and transaction volume saw healthy gains in 2022:

  • The annual absorption total of 289,215 square feet was 50.5 percent higher than the five-year average.
  • Transaction volume notched a 31.7 percent year-over-year increase.

Meanwhile, net rents held steady at $26.92 per square foot, up 1.3 percent from the previous year. The fourth-quarter 2022 vacancy rate stood at 15.9 percent.

Despite those numbers, the report suggests a slowdown in medical office rentals may be underway.

“Tenants who may have previously considered building out or expanding their lease agreements are now in a holding pattern due to increased construction costs and higher interest rates,” the report says. “These factors are having a direct impact on financial decisions when it comes to lease renewals, making it more likely that tenants will remain in their existing location for the foreseeable future.”

Still, the report notes “a number of bright spots for the future of healthcare in Houston.” Aside from last year’s record-high jump in sales volume, the report indicates an aging population coupled with a growing preference for community-based treatment “will lift demand even higher in coming years.”

The report shows that in last year’s fourth quarter, 527,083 square of medical office space was under construction in the Houston area, including:

  • 152,871 square feet in the Clear Lake area.
  • 104,665 square feet in the South submarket.
  • 103,647 square feet in Sugar Land.
Last fall, JLL recognized Houston as a top city for life sciences. According to that report, the Bayou City lands at No. 13 in JLL’s 2022 ranking of the country’s top 15 metro areas for life sciences. JLL says Houston “is poised for further growth” in life sciences.

Houston financial services firm announces acquisition, plans to grow

M&A radar

A Houston-based financial services company has made a recent strategic acquisition that gives it a new banking status.

LevelField Financial, which is creating a platform that combines traditional banking and digital asset products and services, announced this week that it is acquiring Burling Bank, an FDIC-insured, Illinois state-chartered bank. According to the company, once it receives regulatory approval, "LevelField will be the first full-service bank to offer fully compliant traditional banking and digital asset services."

The financial terms of the deal's transaction, which is expected to close later this year, were not disclosed.

The combined company will be able to provide traditional banking services, as well as LevelField's digital asset management. Burling Bank's senior management team will join LevelField's leadership, per a press release. They will focus on serving the bank's existing clients and growing the banking business nationwide.

"We conducted a broad review of banks in the U.S. to find the ideal institution with both an existing business and a management team who are aligned with our vision; we exceeded our expectations with Burling Bank. With this acquisition, LevelField will become a traditional bank, albeit one serving customers interested in the digital asset class," says Gene A. Grant II, CEO of LevelField Financial, in the release.

"We are thrilled to have the Burling executives join our leadership team, and together we intend to deliver fantastic customer service and well-designed products to customers who have an interest in accessing the digital asset class through a traditional bank," he continues.

Founded in 2018 by former banking executives, LevelField's leadership believes "the future of money is digital and that banks will continue to be a trusted provider of financial services," according to the website. This acquisition comes ahead of the company's plans to expand nationally.

"LevelField's strategic approach presented a tremendous opportunity for the bank to expand beyond our local footprint and serve customers with shared interests across the nation," says Michael J. Busch, Burling Bank president and CEO. "Together, we will continue to provide superior service and demonstrate that we truly understand the expanding and unique needs of our customers. Additionally, through the carefully developed suite of products we can address our customers' interests in digital assets and introduce them to LevelField's safe, simple, and secure platform."