Krishna Srinivasan and Venu Shamapant have been investing in Texas startups for 20 years. Now, with the latest LiveOak Venture Partners fund, the duo has more money to focus on Houston. Photos via liveoakvp.com

A venture capital firm that's focused on funding startups across the Lone Star State has closed its latest fund and is set on doubling down on Houston.

LiveOak Venture Partners has been around for almost a decade, and its third fund closed last week at $210 million. It's the firm's largest fund yet — twice its last two funds, which each closed at $105 million. Krishna Srinivasan tells InnovationMap that the original plan was to raise a similarly sized fund but interested limited partners brought even more to the table.

"There was tremendous interest from LPs for this fund," Srinivasan says, adding that the firm could have raised even more based on interest. "People love the white-hot, broad Texas market. ... It's been an exciting journey to take the firm to the next stage."

Srinivasan and Venu Shamapant, founding partners at LiveOak Venture Partners, raised the fund in just over three months — completely on video conferences. The duo has been investing in Texas technology companies for over 20 years and has seen a lot of momentum and excitement for their strategy. While the fund is bigger and brought in new LPs — some based in the Houston area — Shamapant says to expect a continuation of the fund's strategy.

"We don't really see a strong reason to change anything," Shamapant tells InnovationMap. LiveOak targets early stage tech companies in Texas. "On the edges though, the larger fund allows us to tweak (our strategy) a little bit and adapt to the market environment. We've been doing this for 20 years and this is one of the strongest markets we've seen in Texas."

Shamapant says they now have the ability to back more companies with slightly larger checks and longer term support. He also says they might make an investment or two in growth-stage companies, expanding a bit from just funding early-stage startups.

While most of the startups LiveOak has supported reside in Austin where the firm is based, the new fund is particularly geared at investing in startups across Texas.

"We are fiercely committed to adding a lot more portfolio companies in Houston," says Srinivasan. "Houston's got all the raw DNA that would constitute a great fit for the kind of deals we love to do."

LiveOak is no stranger to Houston. The firm was supported by the HX Venture Fund, a fund of funds that invests as a limited partner to VC firms based outside of Houston but with an interest in investing in local startups.

Additionally, one of the firm's early investments was in Houston-founded CS DISCO, a legal software startup that has seen great growth and success over the years. The company later relocated to Austin, which became a bit of a trend for Houston companies that needed to relocate to find success. Srinivasan says he's not seeing this trend so much anymore thanks to a more developed workforce in Houston.

"We believe there is a real depth of talent in the Houston market," Srinivasan says. "We are not at all interested in migrating companies out of Houston. I think there is enough tech strength and success locally."

Shamapant adds that the effect of the pandemic had and a rise in a distributed workforce will only benefit Houston ability to attract and retain tech talent and startups.

"A lot of the trends we talk about in terms of talent, aren't triggered by the pandemic. These are long-term trends we have seen over 20 years," Shamapant says, adding that this means the momentum is here to stay. "The pandemic probably brought it to a tipping point that has accelerated these trends."

Three non-Houston investors discussed the strengths and weaknesses of Houston's innovation ecosystem. Getty Images

3 observations about Houston's innovation ecosystem from out-of-town venture capitalists

Zooming out

You'll go cross-eyed looking at the same puzzle for too long, and sometimes it's better to take a step back and introduce some fresh perspectives and ideas from someone not so connected to the matter at hand.

At the second annual HX Capital Summit hosted by Houston Exponential at Rice University, HX gathered three out-of-town venture capital experts to discuss Houston's innovation ecosystem with Sandy Wallis, managing director at the HX Venture Fund. The fund-of-funds focuses on connecting non-local investors to Houston in order to bring new venture opportunities to town. On the panel, the experts discussed their observations about the Bayou City, which can be summed up as follows.

Community engagement and corporate interest are good signs for Houston 

Right off the bat, the panelists agreed that its much more encouraging visiting Houston nowadays than it was in the recent past. Clint Korver, managing director at San Francisco-based Ulu Ventures, has only recently played witness to the city, thanks to his firm's work with HX and the fund of funds.

"I'm just getting to know the Houston community," Korver says. "I'm really intrigued by how much community support there is."

Korver says that, not unlike Houston startups, Bay Area companies find it a challenge getting a foot in the door at major corporations. However, he's observed that Houston-based corporates want a seat at the table of Houston innovation.

"All the corporate attention that's being integrated here is super intriguing," Korver says. "That's our startups' hardest problems."

The other panelists, who are much closer to Houston, echoed Kover's interest in the role corporations play. Venu Shamapant, founding partner at Austin-based LiveOak Venture Partners, and Thomas Ball, founder and managing director at Austin-based Next Coast Ventures, have witnessed Houston evolve into what it is today over the past decade or so.

"We've both been coming to Houston over the past 20 years and been investing in startups, and it's been a dramatically different scene even in just the past five years," Shamapant says.

Houston's ecosystem is going to take time

While the panelists remarked on the evolution the city has and the support that large corporations seem to be willing to provide, Houston has other assets that's setting it up for success. The panelists mention a solid pool for talent, impressive educational institutions, and more.

"When I look at Houston, I think it has every ingredient for success, which is why I want to spend time here," Ball says.

Sure, as Ball says, Houston has the ingredients, but what it now needs is the time to cook.

"To me, it's more of just time that it's going to take. We can't bake this Houston cake by turning the thermostat up to 900 degrees in an hour. It's going to take three hours at 300," Ball says, adding that he doesn't know very much about baking. "It will take time. This won't be an overnight success. We're here for the long haul."

Houston has some challenges yet to overcome 

Wrapping up the panel, an audience member asked about the changes Houston still needs to make to really get to the point it needs to be at.

For Korver, the answer was pretty simple. Houston needs a big exit.

"There's this incredible amount of momentum that comes along with a successful company that takes a hold of everyone — the rising tide floats all boats thing," Korver says.

For Ball, particularly comparing Houston to other major innovation-focused cities, the issue is that Houston is so spread out.

"To me the one thing I struggle with in Houston is what I would call a density problem," Ball says. "I think you need density here and you need to concentrate your resources in certain places in this city."

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CultureMap Emails are Awesome

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

WHERE TO BE

From networking meetups to pitch competitions, November is filled with opportunities for Houston innovators. Here's a roundup of events you won't want to miss out on so mark your calendars and register accordingly.

Note: This post might be updated to add more events.

Featured event: November 14 — Houston Innovation Awards

Celebrate Houston innovation at InnovationMap's 2024 Houston Innovation Awards on November 14 at TMC Helix Park. Click here to read about the finalists. Secure your tickets below.


November 4 - 5 — In-Space Physical AI Workshop

The Rice University Office of Innovation, in partnership with NASA, Purdue University and the Ion District, will host the In-Space Physical AI Workshop. The event will bring together industry leaders, startups, government agencies and researchers to explore the cutting edge of AI in space exploration. Workshop sessions will cover a range of topics in physical AI ⎯ robots or systems that apply AI to autonomously sense, interact with and adapt to their environment using complex computational, sensory and motor abilities to perform challenging real-world tasks.

This event begins Monday, November 4, from 8 am to 8:30 pm at the Ion. Click here to register.

November 6 — Waste to Work: Transforming Waste into Valuable Resources

This event will delve into innovative strategies and technologies that transform waste materials into valuable resources, driving sustainability and economic growth. Topics will include innovative technologies in waste conversion, policy and regulation, economic opportunities in waste management, success stories from around the world, and trends and predictions.

This event is Wednesday, November 6, from 3 to 6 pm at the Cooley University Life Center at UTHealth Houston. Click here to register.

November 7 — Bots & Brews

This event is the fall meetup for the H-town robotics, drones, geospatial, data & AI crowd, hosted by the Energy Drone & Robotics Coalition. Leaders from energy/engineering asset owner/operators, service companies, tech solution providers, startups & investors in the energy and industrial robotics/drone/data & AI community come together to catch up and talk about real-world solutions, projects and deployments.

The event is Thursday, November 7, from 5:30 to 7:45 at The Cannon West. Click here to register.

November 8 — Tech Fest Live

The UH Technology Bridge will be buzzing with students, industry leaders, innovators, and tech enthusiasts as they come together to celebrate the future of technology and innovation. There will be exciting panel discussions, interactive exhibits, and networking opportunities in the fields of digital media, energy, AI and entrepreneurship.

This event is Friday, November 8, from 8 am to 4 pm at UH Technology Bridge. Click here to register.

November 12 — The New Majority Summit

1863 Ventures, a D.C.-based accelerator and venture capital firm, is focused on advancing New Majority entrepreneurs—those historically marginalized or underrepresented—towards greater wealth and success. This immersive program centers on the essential skills and insights needed to transition into becoming an effective CEO.

Throughout the event, registrants will delve into key topics, including the entrepreneurial mindset, understanding one's customer base, establishing scalable processes, financial management strategies, and effective fundraising techniques. Prepare to be inspired and empowered after hearing from 1863 CEO Melissa Bradley, founder & CEO of LAMIK Beauty Kim Roxie, co-founder of Donna's Recipe Gina Woods and more.

This event is Tuesday, November 12, from 8:30 am to 5 pm at the Ensemble Theatre. Click here to register.

November 12 — Software Day at the Ion: Blockchain 2.0: Innovating Across Industries

Software Day is a monthly series driving the support, inspiration, and connections needed to help startups on their path to rapid, sustainable growth. Each month, software day will include office hours (by application), a keynote session, and networking. This software day is moderated by Samantha Lewis, partner at Mercury. Panelists include the former CEO of BBVA Compass, Manolo Sanchez and Ian Epstein, co-CEO ProfitR, global head of capital markets and distribution at republic.

This event is Tuesday, November 12, from 3:30 to 7 pm at the Ion. Click here to register.

November 13 — Envision 2024

Learn how companies in the ecosystem of the largest medical center in the world are addressing challenges head-on, meet some of our entrepreneurs, and network. This event is presented in partnership with Innovate UK and BioInnovation Institute.

This event is Wednesday, November 13, from 1 to 5 pm at TMC Innovation Factory. Click here to register.

November 14 — State of the Texas Medical Center

The Greater Houston Partnership's State of the Texas Medical Center returns. William F. McKeon, President and CEO of the Texas Medical Center, will deliver an annual address, discussing the tremendous progress in discovery and life sciences at the world's largest medical center. New to this year's State of the Texas Medical Center, is a dynamic pitch competition, the TMC Innovation Pitch Tank.

This event is Thursday, November 14, from 11 am to 1:30 pm at Hilton Americas. Click here to register.

November 15 — 2024 ERG Symposium

This event, hosted by Houston Methodist, will include a keynote from Shona Pinnock, VP of DEI for Peloton as well as insights from other local organizations such as HESS, Houston Methodist, TDECU, Greystone and more. These experts will share how ERGS are impacting business goals, enhancing company culture and employee engagement and will provide valuable insights and actionable takeaways to help organizations maximize the effectiveness of ERGs.

This event is Friday, November 15, from 9 am to 1 pm at The Westin Houston Medical Center. Click here to register.

November 19 — A Texas Talk: Reflecting on the Past, Envisioning the Future

Center for Houston’s Future’s signature fall event, Dinner and Conversation presented by Harvey-Cleary, will feature an exciting conversation between two important Texas voices. Stephen Harrigan, the award-winning author of 12 fiction and non-fiction books, will appear in conversation with Sonal Shah, CEO of the Texas Tribune, who has a long record of social impact work across multiple sectors.

This event is Tuesday, November 19, from 6 to 9 pm at the River Oaks Country Club. Click here to register.

November 21 — Visionary Voices: A Fireside Chat with Dan Ammann, President of ExxonMobil Low Carbon Solutions

In this fireside chat, Dan Ammann, president of ExxonMobil Low Carbon Solutions, will discuss ExxonMobil’s plans in advancing a thoughtful energy transition by delivering the critical energy and products the world needs and reducing their own and others’ greenhouse gas emissions. He’ll talk about Low Carbon Solutions’ transformative projects and investments aimed at bringing lower-emission technologies like hydrogen, lithium, and carbon capture and storage to market, making them accessible to carbon-intensive industries worldwide.

This event is Thursday, November 21, from 8 to 10 am at the Ion. Click here to register.

Overheard: Houston's top energy transition founders explain their biggest challenges

Houston Innovation Awards

From finding funding to navigating the pace of traditional oil and gas company tech adoption, energy transition companies face their fair share of challenges.

This year's Houston Innovation Awards finalists in the Energy Transition category explained what their biggest challenge has been and how they've overcome it. See what they said below, and make sure to secure your tickets to the Nov. 14 event to see which of these finalists win the award.

"The evolving nature of the energy industry presents opportunities to solve some of our industry's greatest challenges. At Amperon we help optimize grid reliability and stability with the power of AI demand forecasting."

Sean Kelly, CEO of Amperon, an AI platform powering the smart grid of the future

"The biggest challenge in leading an energy transition-focused startup has been balancing the urgency for sustainable solutions with the slow pace of change in traditional industries like oil and gas. Many companies are cautious about adopting new technologies, especially when it comes to integrating sustainability initiatives. We overcame this by positioning our solutions not just as environmentally friendly, but as tools that improve safety, efficiency, and cost savings. By aligning our value proposition with their operational goals and demonstrating real, measurable benefits, we were able to gain traction and drive adoption in industries that are traditionally resistant to change."

— Dianna Liu, CEO of ARIXTechnologies, an integrated robotics and data analytics company that delivers inspection services through its robotics platforms

"Scaling up production of hard tech is a major challenge. Thankfully, we recruited top-notch talent with experience in technology scale-up and chemical processes. In addition, we've begun building partnerships with some of the world's largest chemical manufacturers in our space who are excited to be a part of our journey and could rapidly accelerate our go to market strategy. We have significant demand for our product as early as 2025, so partnering with these companies to scale-up will bring our technology to market years ahead of doing it alone."

— Matthew Dawson, CEO of Elementium Materials, a battery technology with liquid electrolyte solutions

"Our pyrolysis reactor is a proprietary design that was developed during Covid. We ran simulations to prove that it works, but it was not easy to test it in a pilot facility, let alone scaling it up. We managed ... to run our pilot plant studies, while working with them remotely. We proved that our reactor worked and produced high quality products. Later, we built our own pilot plant R&D facility to continue running tests and optimizing the process. Then, there was the challenge of scaling it up to commercial size. ... We put together a task force of four different companies to come together to design and build this complex reactor in record time."

— Vibhu Sharma, CEO of InnoVentRenewables, a startup with proprietary continuous pyrolysis technology that converts waste tires, plastics, and biomass into valuable fuels and chemicals

"Energy storage and geothermal power generation are capital-intensive infrastructure projects, requiring investors with a deep commitment and the patience in terms of years to allow the technology to be developed and proven in the field. One challenge is finding that niche of investors with the vision to join our journey. We have succeeded in raising our $30 million series A with these types of investors, whom we’re confident will continue the journey as we scale."

— Cindy Taff, CEO of SageGeosystems, an energy company focused on developing and deploying advanced geothermal technologies to provide reliable power and sustainable energy storage solutions regardless of geography

"The biggest challenge we've faced has been to bring together massive independent power producers on one side who are investing hundreds of millions of dollars into grid infrastructure with multi- national tech giants on the other that don't have experience working much with energy storage. As a startup with only four employees, gaining credibility with these players was critical. We overcame this hurdle by becoming the preeminent thought leader on storage emissions, through publishing white papers, discussing the issues on podcasts, and (more)."

— Emma Konet, CTO of TierraClimate, a software provider that helps grid-scale batteries reduce carbon emissions

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This article originally ran on EnergyCapital.