Startup supporters in Houston are increasingly focusing on energy. Five or six year ago, there was a movement to boost the local consumer tech startup scene. But such companies don’t always attract local capital as easily, so groups such as the Houston Technology Center and Surge, a recently launched accelerator, are now focusing more on energy, a Houston mainstay. Surge matches startups with veterans in energy and technology to serve as mentors. “We said, ‘Let’s find startups that can be built around an ecosystem that already exists, and that’s energy,’ ” said Blair Garrou, a venture capitalist with Houston-based DFJ Mercury and Surge co-founder. DFJ Mercury has invested an undisclosed amount in all 10 of the energy startups in the Surge program. “There’s a lot of innovation that wants to come to Houston and plenty in Houston that wants to stay here,” he said.
Recent newcomers include Neopure Corp. and NanoVapor Fuels Group, both focused on helping reduce or recycle energy-related pollution. Both are on a list of tech startups to watch created for the Chronicle by the Houston Technology Center.
Neopure, which uses a high-voltage electrolysis process to recycle industrial wastewater, moved to Houston in 2009 from Salt Lake City, lured by half a million dollars in funding from local investors.
“It was where we found investors and the infrastructure in oil and gas. All the suppliers were here and the customers,” CEO Dean Themy said. “Houston is the place to be.”
NanoVapor Fuels moved to Houston that same year from Dallas to be closer to its target market, users of large oil storage tanks. The company’s technology, CEO Jim Rice said, helps capture fuel vapors so they can be reused or recycled rather than burned off.
His customers, such as big oil companies, have been traditionally been somewhat risk-averse since they invest so much money in infrastructure. But, he said, many are increasingly open new ways of doing things, he said.
“For an area to be nurturing of starting new technology, there have to be ideas, money and a nurturing environment where potential customers want new technology and are willing to share some of the risk,” Rice said. “Houston is growing that way, but four or five years ago it wasn’t that way in oil and gas.”
Other areas for startups in Houston include biotech, given the presence of the Texas Medical Center, and space-related technologies. Of late, several local startups are venturing into what’s being dubbed the clean Web, said Marc Nathan, a co-founder of Startup Houston, which promotes startups. The emerging technology lets energy companies monitor and analyze production and development online, in turn helping to increase energy efficiency.
“It’s inevitable that we’re going to leverage the Web for technology development and deployment,” Nathan said. “Energy runs Houston, and anything that goes on in energy will have technology applied to it.”
Though consumer tech companies have had a harder time attracting capital in Houston, they continue to sprout up.
YouData has had some success as an online network that matches consumers with advertisers willing to pay them for their attention. Recently launched or in the works Web-based consumer companies include New for The Night, a designer dress rental site; FoodSitter, which helps in the hiring of personal chefs; and GrubSquad, a restaurant food delivery service for individuals and companies inside Loop 610.
If the companies grow large enough or catch the right investor’s eye, they may leave Houston.
The local Web, mobile and social media startup community has long tried to build Houston’s reputation as a technology hot spot. While companies such as Giftiki are conceptualized, built and developed here, investors may lure them away to other cities. California’s Silicon Valley offers an unrivaled concentration of venture capital, tech companies and advisers.
Those that have left Houston include the now-California-based Giftiki, a service that lets users buy items or send money via social networks, and email aggregator NutshellMail, bought by Massachusetts-based email marketing company Constant Contact.
To that end, Garrou said, the city needs to attract more young programmers and tech workers.
“People want to move to these towns because of the cultural breadth, and because it’s a culturally significant place to be,” he said. “There’s a lot of infrastructure here in Houston, but you’re only now starting to see art, photography and other aspects really start to hop and be put on the map for this new consumer hipster group to come to town.”
Meanwhile, he sees opportunities for local startups in next-generation seismic imaging, energy efficiency and energy trading software.
From the Houston Chronicle.