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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Houston scientists develop breakthrough AI-driven process to design, decode genetic circuits

biotech breakthrough

Researchers at Rice University have developed an innovative process that uses artificial intelligence to better understand complex genetic circuits.

A study, published in the journal Nature, shows how the new technique, known as “Combining Long- and Short-range Sequencing to Investigate Genetic Complexity,” or CLASSIC, can generate and test millions of DNA designs at the same time, which, according to Rice.

The work was led by Rice’s Caleb Bashor, deputy director for the Rice Synthetic Biology Institute and member of the Ken Kennedy Institute. Bashor has been working with Kshitij Rai and Ronan O’Connell, co-first authors on the study, on the CLASSIC for over four years, according to a news release.

“Our work is the first demonstration that you can use AI for designing these circuits,” Bashor said in the release.

Genetic circuits program cells to perform specific functions. Finding the circuit that matches a desired function or performance "can be like looking for a needle in a haystack," Bashor explained. This work looked to find a solution to this long-standing challenge in synthetic biology.

First, the team developed a library of proof-of-concept genetic circuits. It then pooled the circuits and inserted them into human cells. Next, they used long-read and short-read DNA sequencing to create "a master map" that linked each circuit to how it performed.

The data was then used to train AI and machine learning models to analyze circuits and make accurate predictions for how untested circuits might perform.

“We end up with measurements for a lot of the possible designs but not all of them, and that is where building the (machine learning) model comes in,” O’Connell explained in the release. “We use the data to train a model that can understand this landscape and predict things we were not able to generate data on.”

Ultimately, the researchers believe the circuit characterization and AI-driven understanding can speed up synthetic biology, lead to faster development of biotechnology and potentially support more cell-based therapy breakthroughs by shedding new light on how gene circuits behave, according to Rice.

“We think AI/ML-driven design is the future of synthetic biology,” Bashor added in the release. “As we collect more data using CLASSIC, we can train more complex models to make predictions for how to design even more sophisticated and useful cellular biotechnology.”

The team at Rice also worked with Pankaj Mehta’s group in the department of physics at Boston University and Todd Treangen’s group in Rice’s computer science department. Research was supported by the National Institutes of Health, Office of Naval Research, the Robert J. Kleberg Jr. and Helen C. Kleberg Foundation, the American Heart Association, National Library of Medicine, the National Science Foundation, Rice’s Ken Kennedy Institute and the Rice Institute of Synthetic Biology.

James Collins, a biomedical engineer at MIT who helped establish synthetic biology as a field, added that CLASSIC is a new, defining milestone.

“Twenty-five years ago, those early circuits showed that we could program living cells, but they were built one at a time, each requiring months of tuning,” said Collins, who was one of the inventors of the toggle switch. “Bashor and colleagues have now delivered a transformative leap: CLASSIC brings high-throughput engineering to gene circuit design, allowing exploration of combinatorial spaces that were previously out of reach. Their platform doesn’t just accelerate the design-build-test-learn cycle; it redefines its scale, marking a new era of data-driven synthetic biology.”

Axiom Space wins NASA contract for fifth private mission, lands $350M in financing

ready for takeoff

Editor's note: This story has been updated to include information about Axiom's recent funding.

Axiom Space, a Houston-based space infrastructure company that’s developing the first commercial space station, has forged a deal with NASA to carry out the fifth civilian-staffed mission to the International Space Station.

Axiom Mission 5 is scheduled to launch in January 2027, at the earliest, from NASA’s Kennedy Space Center in Florida. The crew of non-government astronauts is expected to spend up to 14 days docked at the International Space Station (ISS). Various science and research activities will take place during the mission.

The crew for the upcoming mission hasn’t been announced. Previous Axiom missions were commanded by retired NASA astronauts Michael López-Alegría, the company’s chief astronaut, and Peggy Whitson, the company’s vice president of human spaceflight.

“All four previous [Axiom] missions have expanded the global community of space explorers, diversifying scientific investigations in microgravity, and providing significant insight that is benefiting the development of our next-generation space station, Axiom Station,” Jonathan Cirtain, president and CEO of Axiom, said in a news release.

As part of Axiom’s new contract with NASA, Voyager Technologies will provide payload services for Axiom’s fifth mission. Voyager, a defense, national security, and space technology company, recently announced a four-year, $24.5 million contract with NASA’s Johnson Space Center in Houston to provide mission management services for the ISS.

Axiom also announced today, Feb. 12, that it has secured $350 million in a financing round led by Type One Ventures and Qatar Investment Authority.

The company shared in a news release that the funding will support the continued development of its commercial space station, known as Axiom Station, and the production of its Axiom Extravehicular Mobility Unit (AxEMU) under its NASA spacesuit contract.

NASA awarded Axiom a contract in January 2020 to create Axiom Station. The project is currently underway.

"Axiom Space isn’t just building hardware, it’s building the backbone of humanity’s next era in orbit," Tarek Waked, Founding General Partner at Type One Ventures, said in a news release. "Their rare combination of execution, government trust, and global partnerships positions them as the clear successor-architect for life after the ISS. This is how the United States continues to lead in space.”

Houston edtech company closes oversubscribed $3M seed round

fresh funding

Houston-based edtech company TrueLeap Inc. closed an oversubscribed seed round last month.

The $3.3 million round was led by Joe Swinbank Family Limited Partnership, a venture capital firm based in Houston. Gamper Ventures, another Houston firm, also participated with additional strategic partners.

TrueLeap reports that the funding will support the large-scale rollout of its "edge AI, integrated learning systems and last-mile broadband across underserved communities."

“The last mile is where most digital transformation efforts break down,” Sandip Bordoloi, CEO and president of TrueLeap, said in a news release. “TrueLeap was built to operate where bandwidth is limited, power is unreliable, and institutions need real systems—not pilots. This round allows us to scale infrastructure that actually works on the ground.”

True Leap works to address the digital divide in education through its AI-powered education, workforce systems and digital services that are designed for underserved and low-connectivity communities.

The company has created infrastructure in Africa, India and rural America. Just this week, it announced an agreement with the City of Kinshasa in the Democratic Republic of Congo to deploy a digital twin platform for its public education system that will allow provincial leaders to manage enrollment, staffing, infrastructure and performance with live data.

“What sets TrueLeap apart is their infrastructure mindset,” Joe Swinbank, General Partner at Joe Swinbank Family Limited Partnership, added in the news release. “They are building the physical and digital rails that allow entire ecosystems to function. The convergence of edge compute, connectivity, and services makes this a compelling global infrastructure opportunity.”

TrueLeap was founded by Bordoloi and Sunny Zhang and developed out of Born Global Ventures, a Houston venture studio focused on advancing immigrant-founded technology. It closed an oversubscribed pre-seed in 2024.

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