Venture capital invested doubles

Houston startups receive big boost in second quarter

Venture capital in Houston startups more than doubled in the second quarter from the previous year as investors put money into more than 20 deals involving life sciences, clean chemical manufacturing, technology and blockchain.

Entrepreneurs in the Houston area received $250.8 million in venture capital during the second quarter of 2019, up from the $116.8 million reported for the same three-month period last year, according to financial data and software company PitchBook. The top deal pumped $121 million in the cell therapy company AlloVir, formerly called ViraCyte.

AlloVir unveiled its latest round of financing in May, when it also said it would join the portfolio of ElevateBio of Cambridge, Mass. ElevateBio is a holding company established to create and operate a broad portfolio of cell and gene therapy companies.

For the first half of 2019, the Houston area received $327.3 million in venture capital, up more than 90 percent from $169.6 million reported in the first half of 2018. Despite the jump, Houston remains a minor destination for venture capital. Silicon Valley, in comparison, attracted nearly $27 billion in venture capital in the first half of the year. Austin attracted $1 billion.

Nationally, venture capital deal value in the first six months of 2019 reached $66 billion and is nearly on pace to match 2018’s record of $134.7 billion, according to PitchBook. If this pace holds, 2019 would mark the second consecutive year in which venture capital tops $100 billion.

PitchBook identified exits, when a company is sold or becomes publicly traded, as the biggest story for the second quarter. There were 34 venture-backed initial public offerings that pushed exit value to a record $138.3 billion. Including mergers and acquisitions, total venture-backed exit value for the first half of 2019 reached $188.5 billion, eclipsing every full-year total on record.

The IPOs of companies such as Uber, Zoom and Pinterest stole headlines in the second quarter, but life sciences companies continued to see robust IPO activity.

PitchBook uses more than 650,000 web crawlers to scrub the internet for relevant financial information from news articles, regulatory filings, websites, news releases and more. Natural language processing and machine learning technology organize the data and filter out anything irrelevant. Then a 300-person research team conducts manual reviews to vet every piece of data.