3 female Houston startup founders to watch in 2019

Leading ladies

Three female-founded companies pitched to potential investors at The Cannon. Here's why they are ones to watch. Courtesy photos

The Lone Star State has been deemed a great place for female entrepreneurs to get their feet wet, and Houston's ecosystem is full of these leading ladies. At a pitch party at The Cannon, a coworking space in West Houston, over 100 guests, including Cannon Ventures investors and Cannon members, gathered to hear three of these female founders pitch their companies.

From DNA dating and smart pillboxes to an educational franchise company, these three female-led institutions are ones to watch this year. Here's why.

X&Y Technologies

Brittany Barreto wants X&Y Technologies to be known for its science-based dating expertise. Karla Martin/Pheramor

Now is the time to have a DNA-based technology company, says Brittany Barreto, CEO and co-founder of X&Y Technologies. She launched her genetics-based data app over two years ago, and now she's expanding the brand to include a couples compatibility test and B-to-B software-as-a-service feature, so that other dating apps can utilize her technology.

"Our traction with the dating app was a fantastic way to prove that we are the thought leaders, we have the infrastructure, and we have the algorithm and we've proven that the market is ready to buy a DNA kit to find love," she says in her pitch.

With fundraising plans in 2019, Barreto hopes to launch the expanded company, and says she has already seen a lot of interest in both of the new DNA-based products. Read more about Pheramor's national growth, the X&Y expansion, and how Barreto got her start.

IDEA Lab Kids

Ghazal Qureshi pitched her education franchise company, IDEA Lab Kids, and discussed her plans to double its presence in 2019. Natalie Harms/InnovationMap

Six years ago, when Ghazal Qureshi wanted an after school program for her kid and their diverse interests, she created it. Now, the interactive programming that focuses on the science, technology, engineering, arts and math activities for kids is a growing franchise opportunity. After launching the franchise model in February 2017, IDEA Lab Kids already has 10 locations, with seven coming on board within the next few months — including a location in Ecuador.

"In 2019, we're looking to double the number of campuses," Qureshi says in her pitch.

What makes IDEA Lab different from its competitors, she says, is the interactive and diversified curriculum that engages all children.

"We know that kids have limited attention spans theses days," Qureshi says. "New technologies and methods are needed every day in order to grasp that attention span, and that is what we are really good at. At any given day, there are drones flying, augmented reality, cooking classes, and more are happening under the roof of an IDEA Lab campus."

In addition to expanding its presence, Qurshi has worked to roll our new products, such as a coding club, updated website registration tools

EllieGrid

Regina Vatterott is thinking outside the pillbox with her startup, EllieGrid. Courtesy of EllieGrid

When she was in college, Regina Vatterott fainted on her way to lunch. She had lapsed on taking her medicine and vitamins, which caused an imbalance in her health. She was using a traditional pillbox that was tacky and a pain to organize and starting thinking about a product that was more stylish and used smart technology. She and her cofounders created EllieGrid, a sleek pillbox that syncs to your phone to send you messages when its time to take your meds and allows for an easier organization process.

EllieGrid's reception has been great, and the company is expanding to provide users new tools and technology. For instance, EllieGrid is starting to learn more about when its users take its medicine, which can translate to partnerships with insurence companies that currently pay pharmacies to check in with patients who haven't picked up their medicine.

"For us, Ellie is just the start," Vatterott says in an interview with InnovationMap. "We want to develop more health and wellness accessories that are traditionally known to be medical devices."

Large companies are taking interest in the Houston-based startup. Over the past three weeks, Best Buy, Walmart, CVS Health, and Pelion all reached out and expressed interest in the company, some actually placing orders and setting up trials.

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Houston brain health co. secures $6.5M for rare disease study

neuro funding

Houston-based Goldenrod Therapeutics, part of Fannin Partners' portfolio, has announced the initial close of a $6.5 million series seed preferred stock round.

The round was led by Ataxia Ventures and an affiliate of Fannin, according to a news release.

Goldenrod Therapeutics plans to use the funding to support manufacturing, formulation optimization, IND-enabling studies and a Phase I study of its drug to treat brain inflammation, known as 11h.

The study will consider how 11h, which blocks the enzyme PDE4, could treat Friedreich’s ataxia (FA), a rare genetic disease that affects movement, speech and balance. To date, other PDE4 inhibitors have proven to regulate neuroinflammation and neuronal signaling, but have had adverse gastrointestinal side effects or have not reached enough of the central nervous system, according to Goldenrod.

The company says its 11h is expected to have "broad applicability" with limited emetric side effects.

“Our 11h program is a next-generation, orally bioavailable, brain-penetrant PDE4 inhibitor, where researchers overcame longstanding limitations associated with earlier PDE4 inhibitors," Dr. Dev Chatterjee, CEO of Goldenrod, said in the news release. "We believe this creates the potential for a best-in-class therapy for Friedreich’s Ataxia and a potential foundation for development across multiple neurodegenerative and neuroinflammatory disorders.”

11h was first developed at the University of Nebraska Medical Center (UNeMed). Houston-based Fannin Partners in-licensed the product 2020 and landed SBIR Phase I funding to support its initial development for opioid use disorder soon after.

Goldenrod has also received funding to study 11h's effectiveness for multiple sclerosis, methamphetamine addiction and cocaine addiction.

Goldenrod says it is developing 11h to target a variety of neurological and inflammatory conditions, including Alzheimer's disease, multiple sclerosis, ALS, substance use disorders, Batten disease, pain and traumatic brain injury.

Elon Musk's SpaceX is about to make its debut on Wall Street

Money Moves

Elon Musk's rocket company SpaceX will make its debut on Wall Street Friday, June 12, and both institutional and retail investors are expected to gobble up the 555.6 million shares going up for sale at $135 apiece. Musk, already the world's richest man, could become its first trillionaire.

SpaceX is likely to become the biggest IPO ever, with proceeds of around $75 billion. SpaceX hopes to become the first company to send people to Mars. In fact, part of Musk’s future compensation depends on SpaceX eventually establishing a colony of at least 1 million people on the red planet.

Why SpaceX is going public now

In a video conference on Musk's social media platform X, he told JPMorgan CEO Jamie Dimon that people have suggested for the last 10 years that he take SpaceX public. He's doing it now because the company plans to put 100,000 next-generation Starlink satellites into orbit. Deploying AI data centers in space is a “massive new growth base and you need capital for that,” he said.

Going public provides access to the capital that SpaceX needs. But it also exposes it to more scrutiny from shareholders and more regulatory oversight. That includes filing quarterly financial reports, which critics say incentivizes short-term thinking over longer-term planning and creates unnecessary costs for a company. Securities regulators are currently soliciting public comment on a proposal to require public companies to file the financial reports only twice every year.

How the IPO impacts the company

Musk will hold the majority of a special class of shares, giving him control over decisions related to company strategy, finances and personnel. On the latter, because of his ownership of most of these Class B shares, the only person who can fire Musk as CEO is Musk.

The company credits Musk with being the “driving force” behind its growth, innovation and success. But what happens if Musk is no longer in the picture? SpaceX warns that the loss of Musk could disrupt its ability to execute its strategy as well as hurt its “reputation and relationships with customers, partners and other stakeholders.”

The company also warns that finding a replacement with the same skills and experience as Musk would be time-consuming, if not nearly impossible. As Wedbush Securities analyst Dan Ives wrote Wednesday, “At the end of the day Musk is SpaceX and SpaceX is Musk.”

What could make or break SpaceX

Currently in the test phase, the gigantic reusable Starship rocket is key to SpaceX realizing Musk's ambitions. Much of the commercial space business hinges on SpaceX developing Starship’s capability to be fully reusable and hearty enough for a quick turnaround between flights. If that doesn't happen, SpaceX warns that putting data centers and satellites in space will take longer and cost more money, meaning it risks customers bailing on the company.

Analysts say that by pioneering reusable rockets, SpaceX has established a clear lead on competitors such as Blue Origin, led by Amazon founder Jeff Bezos. The Starlink satellite business competes with, among others, AST SpaceMobile – which is relying on a SpaceX rocket to send its latest generation of satellites into orbit next week.

The prospectus filed last week says SpaceX’s biggest potential market is the sale of business-oriented artificial intelligence products designed to transform how people get work done. It’s an opportunity SpaceX predicts would be worth $22.7 trillion if it could somehow dominate rivals like Anthropic, OpenAI and Microsoft in a highly competitive industry. But the prospectus shows no clear path to profitability for the xAI business, which merged with SpaceX earlier this year.

Why Wall Street is paying attention

If the SpaceX IPO is as successful, the stock could quickly join the Nasdaq 100, a widely followed index that tracks the 100 largest non-financial companies in the composite. That's important because some popular funds, such as the $460 billion QQQ exchange-traded fund, mimic the index and will automatically buy whatever is listed in the index.

Nasdaq recently changed its rules to allow select companies to enter the Nasdaq 100 after just 15 trading days.

S&P Dow Jones Indices, on the other hand, is sticking to established and more traditional thresholds that will not allow SpaceX or other companies with gargantuan IPOs faster entry into its S&P 500 index. That means even high-profile companies will still need to wait for their stocks to trade a full 12 months before they can enter the index.

Companies want to be in the S&P 500 in particular because it's arguably the most important index on Wall Street, with trillions of dollars either mimicking it exactly or benchmarked against it. Vanguard's VOO fund that tracks the S&P 500 has roughly $950 billion invested in it, for example.

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