Austin VC has its eyes on Houston with new $210M fund

money moves

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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German biotech co. to relocate to Houston thanks to $4.75M CPRIT grant

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Armed with a $4.75 million grant from the Cancer Prevention and Research Institute of Texas, a German biotech company will relocate to Houston to work on developing a cancer medicine that fights solid tumors.

Eisbach Bio is conducting a clinical trial of its EIS-12656 therapy at Houston’s MD Anderson Cancer Center. In September, the company announced its first patient had undergone EIS-12656 treatment. EIS-12656 works by suppressing cancer-related genome reorganization generated by DNA.

The funding from the cancer institute will support the second phase of the EIS-12656 trial, focusing on homologous recombination deficiency (HRD) tumors.

“HRD occurs when a cell loses its ability to repair double-strand DNA breaks, leading to genomic alterations and instability that can contribute to cancerous tumor growth,” says the institute.

HRD is a biomarker found in most advanced stages of ovarian cancer, according to Medical News Today. DNA constantly undergoes damage and repairs. One of the repair routes is the

homologous recombination repair (HRR) system.

Genetic mutations, specifically those in the BCRA1 and BCRA1 genes, cause an estimated 10 percent of cases of ovarian cancer, says Medical News Today.

The Cancer Prevention and Research Institute of Texas (CPRIT) says the Eisbach Bio funding will bolster the company’s “transformative approach to HRD tumor therapy, positioning Texas as a hub for innovative cancer treatments while expanding clinical options for HRD patients.”

The cancer institute also handed out grants to recruit several researchers to Houston:

  • $2 million to recruit Norihiro Goto from the Massachusetts Institute of Technology to MD Anderson.
  • $2 million to recruit Xufeng Chen from New York University to MD Anderson.
  • $2 million to recruit Xiangdong Lv from MD Anderson to the University of Texas Health Science Center at Houston.

In addition, the institute awarded:

  • $9,513,569 to Houston-based Marker Therapeutics for a first-phase study to develop T cell-based immunotherapy for treatment of metastatic pancreatic cancer.
  • $2,499,990 to Lewis Foxhall of MD Anderson for a colorectal cancer screening program.
  • $1,499,997 to Abigail Zamorano of the University of Texas Health Science Center at Houston for a cervical cancer screening program.
  • $1,497,342 to Jennifer Minnix of MD Anderson for a lung cancer screening program in Northeast Texas.
  • $449,929 to Roger Zoorob of the Baylor College of Medicine for early prevention of lung cancer.

On November 20, the Cancer Prevention and Research Institute granted funding of $89 million to an array of people and organizations involved in cancer prevention and research.

Top Houston startups, innovators win big, space tech rolls out rover, and more trending news

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Editor's note:Let's roundup the most-read Houston innovation news from the week. Trending Houston tech and startup articles from InnovationMap and its daily newsletter included the announcement of the Houston Innovation Awards winners, Intuitive Machines rolling out its rover, and more.

2024 Houston Innovation Awards winners named at annual event

This year's award recipients span industries and technologies. Photos courtesy

Houston innovators — the moment you've been waiting for. The winners of the 2024 Houston Innovation Awards were named at the annual event.

The Houston Innovation Awards honored over 40 finalists across categories, naming the 12 winners and honoring the two Trailblazer Legacy Awards at the event. Click here to see the winners.

Photos: Houston Innovation Awards celebrates city's startup, tech leaders at annual event

Over 500 members of Houston's innovation community showed up to celebrate the best and brightest of the ecosystem. Photo by Emily Jaschke/InnovationMap

The 2024 Houston Innovation Awards season has come to a close with last week's event.

With a crowd of around 500 attendees, the Houston Innovation Awards, which took place on November 14, celebrated over 40 finalists and a dozen winners across categories. Click here to view photos from the event.

Houston space tech co. rolls out futuristic lunar rover for NASA's Artemis missions

Intuitive Machine unveiled its RACER lunar terrain vehicle at Space Center Houston. Photo courtesy of Intuitive Machines

Houston-based space exploration company Intuitive Machines just unveiled its version of a lunar terrain vehicle that’s designed to be used by astronauts in NASA’s Artemis moon discovery program.

Intuitive Machine recently rolled out its RACER lunar terrain vehicle (LTV) at Space Center Houston. RACER stands for Reusable Autonomous Crewed Exploration Rover. Click here to continue reading.

Houston accelerator names inaugural cohort to propel digital transformation in energy

The NOV Supernova Accelerator will work to cultivate relationships between startups and NOV. Photo via Getty Images

Houston-based Venture Builder VC has kicked off its NOV Supernova Accelerator and named its inaugural cohort.

The program, originally announced earlier this year, focuses on accelerating digital transformation solutions for NOV Inc.'s operations in the upstream oil and gas industry. It will support high-potential startups in driving digital transformation within the energy sector, specifically upstream oil and gas, and last five months and culminate in a demo day where founders will present solutions to industry leaders, potential investors, NOV executives, and other stakeholders. Click here to continue reading.

2 Houston health innovation leaders award grants to cancer-fighting researchers

The Cancer Bioengineering Collaborative announced the projects that were selected for its first round of seed grants. Photo via Rice.edu

Five cancer-fighting research projects were named inaugural recipients of a new grant program founded by two Houston institutions.

Last summer, Rice University and The University of Texas MD Anderson Cancer Center announced they were teaming up to form the new Cancer Bioengineering Collaborative. The shared initiative, created to form innovative technologies and bioengineering approaches to improve cancer research, diagnosis and treatment, recently launched with an event at the TMC3 Collaborative Building in Helix Park. Click here to continue reading.

West Coast innovation organization unveils new location in Houston suburb to boost Texas tech ecosystem

plugging in

Leading innovation platform Plug and Play announced the opening of its new flagship Houston-area location in Sugar Land, which is its fourth location in Texas.

Plug and Play has accelerated over 2,700 startups globally last year with corporate partners that include Dell Technologies, Daikin, Microsoft, LG Chem, Shell, and Mercedes. The company’s portfolio includes PayPal, Dropbox, LendingClub, and Course Hero, with 8 percent of the portfolio valued at over $100 million.

The deal, which facilitated by the Sugar Land Office of Economic Development and Tourism, will bring a new office for the organization to Sugar Land Town Square with leasing and hiring between December and January. The official launch is slated for the first quarter of 2025, and will feature 15 startups announced on Selection Day.

"By expanding to Sugar Land, we’re creating a space where startups can access resources, build partnerships, and scale rapidly,” VP Growth Strategy at Plug and Play Sherif Saadawi says in a news release. “This location will help fuel Texas' innovation ecosystem, providing entrepreneurs with the tools and networks they need to drive real-world impact and contribute to the state’s technological and economic growth."

Plug and Play plans to hire four full-time equivalent employees and accelerate two startup batches per year. The focus will be on “smart cities,” which include energy, health, transportation, and mobility sectors. One Sugar Land City representative will serve as a board member.

“We are excited to welcome Plug and Play to Sugar Land,” Mayor of Sugar Land Joe Zimmerma adds. “This investment will help us connect with corporate contacts and experts in startups and businesses that would take us many years to reach on our own. It allows us to create a presence, attract investments and jobs to the city, and hopefully become a base of operations for some of these high-growth companies.”

The organization originally entered the Houston market in 2019 and now has locations in Bryan/College Station, Frisco, and Cedar Park in Texas.

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