Report: In tough market, Houston sees surge in venture capital funding

Houston-area startups saw a healthy increase in venture capital funding in the first half of 2024 compared to the same period last year, new data shows.

In the first six months of this year, Houston-area startups attracted $760.55 million in venture capital funding, according to the latest report. PitchBook-NVCA Venture MonitorThis represents a 17.7% increase from the $645.99 million raised in the first six months of 2023.

Keep in mind that these numbers may not match previously reported numbers. This is because PitchBook regularly adjusts the data as new information becomes available.

In light of a variety of factors, such as the current hype around artificial intelligence, fundraising will likely continue to be difficult for U.S. startups as a whole, according to Nizar Tarhuni, vice president of institutional and editorial research at PitchBook, a venture capital data provider.

Nevertheless, Bobby Franklin, president and CEO of the National Venture Capital Association (NVCA), points out that American venture capital is “finding its place in 2024.”

Nationwide, venture capital funding for startups in the first half of 2024 totaled $93.4 billion, up 6.5% from the $87.7 billion raised in the same period last year, according to the PitchBook-NVCA Venture Monitor.

“With deal values ​​continuing to rise, particularly in early-stage investments, more seed funding and increased participation from crossover investors, Q2 2024 has been a strong year for venture capital,” Franklin said. “It is now up to founders, investors and regulators to support, rather than stifle, these green shoots as the market heads toward recovery.”

In the second quarter alone, venture capital funding in the United States increased from $35.4 billion in 2023 to $55.6 billion in 2024. That’s a 57% increase.

In contrast, Houston-area venture funding moved in the opposite direction. Startups in the region raised $231.79 million in venture capital in the second quarter of 2024, down from $333.17 million in the same period a year earlier. That’s a 30% decline.

So far in 2024, Houston-based Fervo Energy is leading the way in venture capital rounds for startups in the metro area. In March, the geothermal energy provider announced it had secured $244 million in fundingwith Oklahoma City-based oil and gas company Devon Energy leading the round.

Fervo’s latest venture capital round represents more than 30% of all Houston-area venture funding through the first six months of 2024.

Tim Latimer, Fervo co-founder and CEO, says the $244 million investment allows his company “to continue to position geothermal at the heart of 24/7 carbon-free energy production.”

Fervo says the latest round of venture capital funding will support the development of its 400-megawatt geothermal project in Beaver County, Utah. The Cape Station facility is expected to begin generating electricity for the grid in 2026.