A turbulent funding year for startups across the country was reflected in Houston, where venture capital investment and deal count fell compared to previous years. However, 2023 continued to see growth in Houston’s incubators, such as the Ion and Greentown Labs in Midtown, and accelerator programs such as Softeq Venture Studios.
Meanwhile, some Houston-founded companies that took shape in recent years, such as Cemvita Inc., Syzygy Plasmonics, and Axiom Space, continued their progress in the form of infrastructure buildouts, high-profile commercial deals, and even space missions.
Here are the top five most-read stories from Houston’s innovation ecosystem this year:
'Explosion of opportunity': Axiom, NASA project low-Earth-orbit economy boom in next decade
Axiom Space is over halfway through its plan to send four commercial missions to the International Space Station, but co-founder and CEO Michael Suffredini said those missions are just part of the economic boom that the company wants to be a front-runner in — and Space City will continue to play a part in Axiom Space’s growth.
"The local economy is affected significantly because not only will there be jobs, but the amount of research and manufacturing that will take place over time will start to focus around the Houston area as well," Suffredini said in April. "There's a lot of testing and demonstration you have to do before you fly a system or [produce] a product, whatever that product might be."
Axiom Space followed its successful Axiom Mission 2 by closing the largest funding round in Texas in Q3, a $350 million Series C round co-led by South Korea-based Boryung Co. and Saudi Arabia-based Aljazira Capital. The company also opened the first phase of its planned 22-acre campus at the Houston Spaceport in December.
United Airlines secures big sustainable aviation fuel deal with Houston-based Cemvita
The biochemicals company Cemvita Corp. marked a milestone in its growth when it announced a major deal with United Airlines for its sustainable aviation fuel in September. Chicago-based United agreed to buy up to 50 million gallons of SAF annually for 20 years, for a total of up to 1 billion gallons. The airline was also a previous investor in Cemvita.
Cemvita uses microbe technology to convert carbon dioxide into an oil that can then be converted into SAF, a sought-after commodity for airlines looking to decarbonize their operations. Moji Karimi, Cemvita’s CEO and co-founder said locations for the plants that will produce fuel for United had yet to be determined, but ideally the company would like to stay in Houston.
That deal followed Cemvita opening its first pilot plant in Houston only a few months earlier. The company has also spun out subsidiaries exploring mining applications of its technology.
How advent of AI is changing tech landscape for data management firm Solidatus
The advent of artificial intelligence has changed the game for a data company that expanded to Houston last year. Philip Dutton, CEO of London-based data management firm Solidatus, said the company was adapting to the growing prevalence of AI due to inquiries from its clients and stakeholders.
“Everyone wants the advanced analytics; everyone wants the AI algorithms to be able to accelerate the journey,” Dutton said. “But as data professionals, we know that unless we provide the right data into those tools, the decisions that are going to come out of them aren't going to be optimal.”
The growth of generative AI in business has led tech giants across the nation to create and expand venture funds and accelerators targeting the technology. Spring-based Hewlett Packard Co. (NYSE: HPE) predicted the market to triple by 2026 during the company's securities analyst meeting in November.
Cart.com brings headquarters back to Houston, begins search for larger space
In one of the biggest headquarters moves in Houston this year, the e-commerce company Cart.com returned to its old stomping grounds, two years after it left for Austin as a startup looking for software developers.
Cart.com leadership confirmed that the company is on the lookout for a new, larger space than the office it occupies in The Cannon’s West Houston location, where it can bring employees together. Proximity to the Port of Houston and access to a larger base of legal and professional services firms were other reasons why Cart.com returned.
The move followed Cart.com hitting unicorn status in the summer thanks to a $60 million funding round. Omair Tariq, the company’s CEO and co-founder, also shared a personal statement on his ties to Houston.
“I moved to Houston as a 16-year-old first generation immigrant from Pakistan and have done everything from working at gas stations to delivering pizzas to building my first entrepreneurial venture at the Houston flea markets,” Tariq said. “The city has made me who I am today and my family and I have come to love its diversity, kindness and ease of allowing people like us to not only blend in, but thrive.”
Embark Technology to close offices in Houston, Southern California, cuts 70% of staff
It has been a bumpy ride for autonomous vehicle technology in Houston in 2023. While companies such as California-based Kodiak Robotics Inc. and Pittsburgh-based Aurora Innovation Inc. announced deals and infrastructure for their autonomous trucking business, others, including San Francisco-based Embark Technologies (Nasdaq: EMBK), ended up cutting workers and closing offices.
Other autonomous vehicle companies operating in Houston that had a hard 2023 include fellow California-based startup Nuro, which blamed a difficult funding environment for its decision to cut staff and move away from its previous vehicle manufacturing plans.
Meanwhile, San Francisco-based Cruise LLC, which is backed by General Motors, did manage a Houston pilot run, but a suspension of the company’s operating permit in California led Cruise to pause its robotaxi rollout in all markets in October. A few weeks later, its CEO Kyle Vogt resigned from the company.
