Page 14 - April 2023

HOUSING AFFORDABILITY, SELECTED TEXAS METROS

Source: Houston Association of Realtors

VENTURE CAPITAL UPDATE
Houston companies raised $455.8 million in venture
capital (VC) funding in Q4/22, a 41.3 percent drop from
the $776.7 million raised in Q4/21. Houston companies Houston companies raised
raised $1.95 billion in VC funding in ’22, down 23.7 per- $455.8 million
cent from ’21 but still the second-best year on record. To
put Houston in context, Austin had 416 VC deals totaling in venture capital (VC)
$4.9 billion in ’22.
funding in Q4/22
HOUSTON VENTURE CAPITAL FUNDING
4-Quarter Total
• Information technology slid 60.3 percent to
$285.3 million.
• Business products and services (B2B) fell 10.4
percent to $277.6 million.
• Healthcare slid 72.3 percent to $246.4 million,
last year’s results somewhat skewed by the few
oversized deals in ’21.
• Materials and resources dropped 52.3 percent to
$201.2 million, and
• Financial services slipped a modest 3.2 percent to
$47.3 million.

ENERGY TRANSITION
The Partnership has identified over 300 Houston-based
Note: Funding includes all venture capital types (Angel & Seed, Early companies in over 30 industrial sectors that are engaged
Stage, Later Stage) in the energy transition. These companies work in the
Source: Greater Houston Partnership analysis of Pitchbook data areas of biofuels, carbon capture use and storage, the
efficient use and storage for geothermal, hydrogen, solar,
and wind energy.
In ’22, 191 Houston-area companies secured invest- They represent a variety of operations: asset man-
ment through 226 venture capital deals. These deals were agement, construction and engineering, environmental
funded by 348 different investors. The biggest Houston services, equipment manufacturing, investment and
deal was valued at $500 million and closed by Manchester financing, startup incubator, renewable power generation
Energy, a traditional midstream energy company. The and distribution, software development, operating, and
average post-closing valuation of a business was $86.6 professional services to name a few. Of note is the signif-
million, and the median, $28.5 million. icant number of traditional oil and gas companies diver-
In ’22, energy and consumer products and services sifying their operations and investing in a low-carbon/
(B2C) were the only two industries to see an increase in zero-carbon future. N
funding. Energy raised $785.6 million, an 866.6 percent
increase from the previous period, while B2C raised Patrick Jankowski, Roel Martinez, Zain Murtaza, and
$106.8 million, a 25.7 percent increase. Other industries Clara Richardson contributed to this issue of Houston:
saw decreases: The Economy at a Glance.

14 NBIZ ■ April 2023