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Quarterly Update: Venture Capital

Q4 '19
Published on 1/13/20
Quarterly Update: Venture Capital Funding

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Houston startups received $543.9 million in venture capital (VC) funding in ’19, a 42.2 percent increase from ’18 and the highest on record for the Houston region, according to a Partnership analysis of Pitchbook data. The tally marks a third-straight year of growth for VC funding in Houston. The region has doubled its VC investment since ’16, when startups received $267.5 million. 

Venture Capital Q4 2019 - graph

 

On a 12-month rolling basis, VC investment averaged $524.7 million in ’19, with activity peaking at $611.5 million in the 12 months from September ’18 to August ’19, the best yearlong span on record for Houston. While funding levels were up, deal activity was slightly down from the previous year, with 87 deals reported in ’19 compared to 92 deals in ’18.  

 

Health care was the biggest target for investment in ’19, with life science and digital health startups generating $243.6 million across 26 deals. Half of that total came from Houston’s largest VC deal of the year, a $121 million series B funding to the immunology firm Allovir.  Information Technology (IT) companies generated $131.8 million across 26 deals, while energy-focused technology startups generated $65.8 million in 10 deals.  The Business-to-Business (B2B) Products and Services sector drew 48.1 million across 11 deals. Notably, the B2B and IT sectors includes several companies offering energy-related.

Venture Capital q4 '19 - sector bar graph

 

Other top deals across all sectors included a $32 million Series B to materials tech company Solugen, a $30 million Series D to medical device maker Procyrion, and a $25 million Series B to digital oilfield supplier GoExpedi. 

 

Breaking down the investments by maturity, later stage VC showed the greatest uptick in ’19 with investments totaling $255.8 million, twice the previous year’s tally of $120.2 million. Early stage investment grew to $224.7 million, a 21.9 percent increase, while Seed and Angel fundings fell to $63.4 million, an 18.7 percent decline. 
 

Venture Capital - Q4 19 YTD Summary

 

Prepared by Greater Houston Partnership Research

 

Josh Pherigo
Director, Data Analytics
713-844-3617
jpherigo@houston.org

 

Digital Technology Key Economic Indicators
$543.9 million

Houston startups received $543.9 million in VC funding in '19.

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