Houston Deal Highlights – Q1 2022

Houston Deal Highlights

Q1 2022 Venture Report

5! Count it, 5 straight quarters with over $300M in venture funding! 6 years ago, we were barely cracking this number for the year, and now it’s below the quarterly average. This newsletter is a lot easier to write when we have major activity, and bringing in $348M certainly fits the bill. I’ve said it before and I’ll say it again, these numbers are based on years of hard work from several organization to build the startup infrastructure in Houston. Amazing to see the company building and value creation that is happening.

Venture Funding in Houston

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Houston Venture Activity

Here are your 10 biggest venture deals of the quarter:

• Encina, The Woodlands-based developer of technology designed to produce renewable products from waste plastic, raised $55M of venture funding from IMM Investment and SW Recycle Fund
• Avelo Airlines, a Houston-based airline, announced a $42M Series B round, led by Morgan Stanley Tactical Value. Avelo has now raised $167M since beginning service in April 2021.
• Ecommerce Brands, a Houston-based e-commerce aggregator platform, raised a $40M round, including $10M in equity led by Bearing Ventures.
• MetOx, a manufacturer of high-temperature superconducting wire, raised $28M of Series A venture funding from Safar Partners and other undisclosed investors.
• Zeta Energy, a Houston-based battery manufacturer, announced a $23M Series A round, led by Moore Strategic Ventures. Zeta has raised $27.2M to date for their novel lithium sulfur battery technology.
• Stream Biomedical, developing therapeutic needs for individuals suffering as a result of neurologic trauma and/or degeneration, raised $21.5M Series A from undisclosed investors
• Zinnov, the Woodlands-based developer of talent acquisition and management consulting software, raised a $20M Series A from HKW.
• Decisio, a clinical decision support platform designed to aggregate and prioritize real-time patient data, raised $18.5M Series B venture funding from Declatex, GE Healthcare and UT Horizon Fund. The company has raised $31.5M to date.
• Vivante Health, a Houston-based chronic disease management platform, raised $16M Series A led by 7wire Ventures. The financing round was joined by new investors Human Capital, Intermountain Ventures, SemperVirens, Elements Health Ventures, and Leaps by Bayer. Returning investors FCA Venture Partners, NFP Ventures, Lifeforce Capital, and Big Pi Ventures also participated in the round. The company has raised approx. $50M to date.
• SiteAware, a Houston-based construction AI platform, announced a $15M Series B round, led by Vertex Ventures Israel. SiteAware has raised $26.5M to date with other investors including Axon Ventures and Robert Bosch Venture Capital.

What do startups, investors, Mason Rathe and Baker Tilly have in common? We’re all passionate about the startup and venture capital ecosystem in Texas. At Baker Tilly, we have the resources to support the ecosystem throughout each phase of the business lifecycle. From startup to IPO, from portfolio company to fund, we have a team dedicated to enhancing and protecting your value. Connect with us or visit our website to learn more

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Houston M&A Activity

M&A Activity in Houston

Usually I break down the M&A activity strictly for software companies, but considering there were 12 acquisitions in this sector, and none of them decided to disclose the deal terms, that chart wouldn’t tell the right story. Houston is a huge economy, and as tech accelerates its momentum in the tech arena, there are key industries that has made this the 7th largest metro GDP in the country, at over $500B. Let’s take a look at the acquisitions that did occur.

M&A Activity By Sector in Houston

As you can see, Q1 was dominated by the energy industry, a common theme in Houston’s identity, which claims headquarters of major energy companies including Phillips 66, Baker Hughes, ConocoPhillips, and Haliburton. These companies also happen to be key customers for the startups in the area. As the venture backed companies continue to build value in Houston, we will most certainly see more M&A activity and IPO’s to follow, stay tuned!

I’ll see you in a few week to catch you up on the happenings in Q2. Thank you!