Within the startup world, small funding offers are a giant deal in Houston.
A brand new Houston Exponential analysis primarily based on knowledge from PitchBook reveals early-stage and angel rounds accounted for 151 enterprise capital offers below $5 million final yr. Practically two-thirds of these VC offers had been lower than $1 million.
Because of that sturdy exercise, Houston now ranks because the third-fastest-growing tech ecosystem for early-stage corporations within the nation, in keeping with the evaluation.
In the meantime, final yr’s total VC deal depend exceeded 200 for the primary time, “a harbinger of future development potential as new firm creation continues to blow up,” the evaluation says.
Texas Medical Middle is contributing to that explosion. It lately raised the dimensions of its TMC Enterprise Fund to $50 million. TMC says the fund now will have the ability to again a wider vary of early-stage startups.
“After we launched the TMC Enterprise Fund, our aim was to drive collaboration and entrepreneurship, and set up Texas as a life science hub,” William McKeon, president and CEO of TMC, says in a news release. “Our preliminary funding was extraordinarily profitable, and this inflow of capital creates a singular alternative for TMC to spend money on corporations within the earliest phases of commercialization, additional bolstering Houston’s thriving life science group.”
Though Houston’s common early-stage deal dimension of $18 million stays shy of the nationwide common of $21 million, that also represents a 68 % development price since 2019, in keeping with the evaluation from Houston Exponential, an entrepreneurship hub. In contrast with the nationwide development price of 23 %, “this demonstrates the broader enlargement and maturities throughout the Houston ecosystem,” the evaluation says.
The dimensions of offers on the Sequence A and Sequence B ranges is also on the rise. In line with the evaluation, the median Sequence A spherical in Houston grew from lower than $3.2 million in 2020 to greater than $10 million in 2021. The dimensions of Sequence B rounds rose 35 %, from a median of $13.6 million in 2020 to $21 million in 2021.
Whereas these numbers are spectacular, mega-deals stole the highlight in 2021. Six Houston corporations raised a minimum of $100 million final yr, with three of these offers surpassing $300 million. Collectively, Axiom Area, Cart.com (now based in Austin), HighRadius, Lancium, Solugen, and Vyripharm Biopharmaceuticals raised $1.3 billion final yr.
Final yr’s mega-deals introduced the variety of Houston unicorns, together with Cart.com, to 5. Unicorns are startups valued at $1 billion or extra. In Houston, the latest members of that membership are Solugen, with a $357 million Series C round in 2021, and Cart.com, with a $240 million Sequence B1 spherical final yr.
“That VC-backed corporations had been capable of generate such monumental worth in 2021 throughout a time characterised by nice uncertainty and extraordinary circumstances highlights the continued significance of VC-backed corporations to the resilience of Houston’s financial system,” says Serafina Lalany, government director of Houston Exponential.