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Houston’s Startups Are Now an Entrepreneurial Powerhouse

Houston is seeing success in startup sub-sectors including AI and Life Sciences.
Sofia Kousa
on June 18, 2019

Houston is the most ethnically diverse metropolitan area in the U.S and is expected to become the third most populous U.S. city between 2025-2030. With swift growth and top talent, Houston is one of the fastest growing startup ecosystems globally.

There are several reasons why startups choose Houston. The city seems to have it all — relatively low cost of living, the fourth largest concentration of Fortune 500 companies, and a growing base of female founders supported by a wealth of organizations and nonprofits aimed at providing resources for women entrepreneurs.

Houston also ranks as a top 25 ecosystem for talent globally in Startup Genome’s 2019 Global Startup Ecosystem Report with local graduates from Rice University and the University of Houston flooding into the talent pool. With the help of Impact Hub Houston, and its CEO Grace Rodriguez, Houston offers startups both talent and a skill set to solve social problems.

Additionally, Houston is seeing success in AI, Big Data, and Analytics. One notable mention of an AI startup in Houston includes Arundo Analytics, an industrial focused startup providing software to enable machine-learning and analytics applications, raising $25 million in 2018. Another startup to know is Zdaly, a platform providing predictive insights through machine learning and Big Data, that raised $1.5 million in 2018.

Besides AI, Houston’s ecosystem is seeing success in Life Sciences. This comes as no surprise as Houston is home to the largest medical complex in the world — the Texas Medical Center — as well as 8 R&D hospitals and the TMCx AcceleratorOncoResponse is one Life Sciences startup of note. They focus on research in immunotherapy and new technology for oncologists as well as development of antibody-based treatments for cancer. They raised $40 million in a Series B round in 2018.

Houston’s venture capital firms are focused on local strengths. One of the biggest firms in Houston is the Mercury Fund, an early-stage venture capital firm led by Blair Garrou, Adrian Fortino, Aziz Gilani, and Dan Watkins. With over $275 million under management, the firm’s main focus is on AI and Data Science.

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In our 2019 assessment of Houston we ranked the city against 40+ other startup ecosystems. Highlights include:

  • Houston is in the top 10 ecosystems for female founders
  • In terms of tech startups, Houston is among the top 30 largest startup ecosystems in the world
  • The average salary of a software developer in Houston is $80,700, exceeding the global average of $58,300.

Our local Member, Houston Exponential, was created in October 2017 to accelerate the growth of Houston’s innovation ecosystem. It’s a nonprofit organization led by Harvin Moore with a goal to provide support that paves the way for innovative communication between startups, corporations, and investors. They oversee the HX Venture Fund which invests in Houston startups.

“Houston is now home to approximately 15 venture funds, compared to only one fund little over 2 years ago," Jon Nordby, Director of Strategy at Houston Exponential, told us. "The funding environment is thriving and runway capital goes further there.”

Want to be more involved in the Houston startup ecosystem? Become a Startup Genome Ambassador! Please get in touch.


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