Houston startup companies have raised over $466 million in venture capital funding so far this year. According to HTX Funding Review, a new report from Houston Exponential, that's 7% more compared to the same time last year. It’s also a break away from the national trend, where funding has dropped 40% nationwide. 

This marks the third consecutive year of strong growth in deal value in Houston’s tech innovation ecosystem.

“This expansion in Houston’s relatively new and booming tech innovation ecosystem shows a strength and resilience that is really exciting,” said Houston Exponential President Harvin Moore.

Houston kicked off 2020 on a high note with the first tech unicorn of the year. HighRadius, an AI-powered fintech software company, raised a $125 million round of funding in January, propelling the Houston-based business' valuation over $1 billion. (Hear more about why this was significant in this episode of Bayou Business Download) But the report also notes that while significant, HighRadius isn’t the sole reason for Houston’s remarkable VC strength. 

“We are seeing a maturation of our very young ecosystem, as rapidly growing tech companies increasingly access later stage venture capital, which often comes from outside the local area” said Moore.

2020 on Track to Surpass 2019 Funding Volume 

Moore also noted Houston tech startups are on pace to surpass last year’s funding volume, even as deal flow is hampered by COVID-19-related slowdowns.

“There are several very large local deals in final term sheet stage, and we expect full year 2020 to be the highest ever for venture capital in Houston; our ecosystem is really thriving.”

So far this year, nearly 20 late-stage VC deals (Series C and D) have accounted for nearly 76% of all capital raised. The deal count of these rounds also outpaced last year with the prominence of what the report calls “megadeals” ($100 million +), including Preventice Solutions, which raised $137 million, and HighRadius, which, as mentioned earlier, raised $125 million. Preventice, a developer of remote patient monitoring and devices for cardiac arrhythmia patients, is Houston’s largest deal to date, securing Series B funding from a Palo Alto-based VC. 

Notable Late-Stage, Early-Stage Deals

Houston Exponential highlighted nearly a dozen deals in their later stages as well as those in Series A and B. 

It said while the late-stage is the most vulnerable to market volatility, there’s been a surge in this activity. Nearly 20 late-stage deals that have been completed so far this year with nearly $325 million invested. This is an increase of over $100 million from what was reported from the same time period in ’18. 

In addition to HighRadius and Preventice Solutions, the report named other notable deals in this stage: Liongard, ThoughtTrace, and Quident Energy. 

The early-stage landscape in Houston is also thriving. So far, a dozen deals in this stage have been completed with over $73 million invested. The most notable early-stage investment was in Solugen Inc. at over $30 million, which uses plant-centered biotechnology to produce environmentally friendly chemical.

The leading industry sectors are health care, information technology, and consumer products and services. 

Learn more about Houston's innovation landscape.