Houston mayor Sylvester Turner opened the two-day GCV Venture Houston conference last month, welcoming more than 200 participants to the city of Houston, Texas, the seventh largest economy in the US and 26th largest in the world. Dubbed the “global knowledge capital”, the city has a vibrant ecosystem for startups with more than 500 technology startups in consumer and business service, data analytics, software development, healthtech, spacetech and cleantech.
Turner said Houston was now the fourth-largest city in the US, one in 10 of whose residents were foreign-born, representing more than 145 languages. This diverse population contributed to an exciting framework, allowing the city to customise itself to cater to entrepreneurs and investors.
Barbara Burger, president of Chevron Technology Ventures (CTV), the 20-year-old strategic investment arm of oil and gas producer Chevron, spoke about the future of energy innovation. Having launched a $100m future energy fund in June this year and being a Luminary member of the GCV Leadership Society, CTV is an active agent in the innovation ecosystem in Houston.
She said that although CTV’s parent Chevron is headquartered in California, it had more employees and contractors based in Houston than in any other place in the world. Burger said innovation in technology in the oil and gas industry required change, such as more digitised value chains and energy efficiency. As a result, CTV had a much greater interest in engaging with external innovation, particularly in the digital arena, and Chevron was increasingly leveraging from technologies developed by its innovation unit.
In today’s world, Burger emphasised: “Status quo is not acceptable – change is the new norm.”
James Mawson, editor-in-chief of Global Corporate Venturing, Global University Venturing and Global Government Venturing, led a discussion on universities as a driver of US venturing and innovation with Julie Goonewardene, chief innovation officer of the University of Texas (UT) System.
A doyenne in technology commercialisation and company formation, Goonewardene said she oversaw the university’s dealings with intellectual property and startups. UT System, with 14 universities and health science centres, linked key elements needed to start a company – money, people and ideas. She said: “At university, there are plenty of ideas, but we need to find ways to help our people with money, training and matching.” An example was UT Connects Talent, which brought together job-seeking students and entrepreneurial companies.
Like Turner, who highlighted diversity in the entrepreneurial realm, Goonewardene said Texas governor Greg Abbott also sought to make Texas the number-one US state for women-led startups. She said she had started her career as an IT entrepreneur and built a software company, so she was aware it could be more challenging for women to start a company, particularly funding, which was largely relationship-based. She thought it was imperative to help women raise capital in a male-dominated field.
Goonewardene then explained the organisations associated with the university. University of Texas Investment Management (Utimco), the investment arm of the University of Texas, had a $46bn endowment and invested solely for financial return. It allocated approximately $2bn a year to private equity and large funds but also made direct investments. She said Utimco was well-run and successful.
UT Horizon Fund, on the other hand, had started in 2012 as a dual-purpose fund and was run by the UT System. It was designed to generate positive returns, but it also advanced commercialisation by collaborating with companies much earlier. Unlike many university-affiliated funds, the fund had crossed to the public market to support its portfolio companies and also conducted multiple rounds. The fund invested from $100,000 to a few million per round.
Having co-invested with Microsoft’s venture fund M12 and Intel Capital, the venturing subsidiary of the semiconductor and data technology provider, Goonewardene concluded that CVCs and universities should define what “early” meant, as the word often carried different connotations in mixed contexts.
The general session at Venture Houston then hosted a series of presentations focused on how CVC has driven cross-industry collaboration and technology uptake. The session featured speakers from CVC-backed enterprises and was moderated by GCV contributing editor Tom Whitehouse. These startups showed how they had developed technologies and solutions at the intersection of data and energy and had received corporate backing.
Steve Sliwa, CEO of Seeq, was introduced by Kemal Anbarci, managing executive at Chevron Technology Ventures (CTV), the corporate venturing arm of US-based oil and gas major Chevron. Anbarci noted that Seeq was CTV’s 78th investment and an enterprise IT solution adopted by Chevron and implemented in just 10 days.
Sliwa’s talk stressed the need for advanced analytics for process industries, ranging from oil and gas to food and beverage manufacturing. Sensors employed by those industries collected vast quantities of data, which necessitated proper visual analytics tools. Big data from industries did not work well with traditional time series or spreadsheet tools, so process engineers in charge of streamlining production and reducing costs were left behind. He said Seeq built tools enabling analysis and reporting which could be integrated with other tools enterprises may have. Sliwa also said Seeq had tripled its subscription revenue after Chevron’s investment and significantly increased its customer base.
Brian Ballard, CEO of Upskill, a developer of a software for augmented reality devices used in manufacturing, was introduced by Kash Siddiqui, senior principal at Accenture Ventures. Ballard said Upskill’s product was designed to help increase the skillsets of modern blue-collar industrial workers. The company believed augmented reality would bridge the gap between the physical and digital world in manufacturing. Ballard’s presentation included a video on how Upskill’s technology was used in the wire manufacturing process for Boeing aircraft.
Kevin Duffy, vice-president of business development at FogHorn, developer of an industrial internet-of-things (IoT) analytics application developer, was introduced by Lee Sessions, managing director at Intel Capital, venturing arm of US-based chip and semiconductor manufacturer Intel. Sessions said he co-invested in FogHorn with oil and gas major Saudi Aramco, US-based industrial product and software producer Honeywell, industrial conglomerates Robert Bosch and General Electric, among others. Duffy spoke mostly about “edge intelligence”, after noting his company has raised around $50m.
He said overwhelming amounts of data generated by industries had to be sent from oil rigs to headquarters via the cloud for analysis. He said the main idea behind edge computing was processing data locally. FogHorn worked cooperatively with all cloud services and applied machine learning. Duffy gave examples of how FogHorn’s solution had been used for processes from early pump failure detection through wellhead performance monitoring to windfarm output forecasting.
Dan Piette, CEO of Bluware, was introduced by Kirk Coburn, investment director of Shell Ventures, a corporate venturing arm of Anglo-Dutch oil and gas major Royal Dutch Shell. Piette said Bluware provided a data compression solution for the oil and gas industry. He said the way data were stored allowed them to be analysed via machine learning.
The following session was introduced and moderated by Neil Foster, partner at Baker Botts, a Texas law firm and a sponsor of Venture Houston. Advanced mobility solutions were presented by CVC-backed and emerging businesses.
Stephen Voller, CEO of Zap&Go, a UK-based graphene supercapacitors-based charger developer that provides fast charging for phones, tablets and electric vehicles, said the company’s chargers were made using innovative nanocarbon materials and proprietary electrolytes that produced a fast and durable power module with cordless charging facilities.
Antonio Vitti, chief financial officer of Peloton Technology, a US-based automated car technology developer, said his company’s aim was to improve freight transport. Heavy vehicles were linked in a tightly-knit formation through radar-based active braking systems and vehicle-to-vehicle communications to boost safety and reduce fuel costs. With most funding coming from strategic investors, the company raised $65.31m in series B1 and B2 rounds led by Omnitracs in 2017 and other participants included BP Ventures, Intel Capital and others.
Boris Maslov, director at Russia-based cargo-carrying platform developer ARDN Technology, said his team had developed a novel flight control system for drones. More than 30 technical experts were involved in the development of the platform, performing tests and implementing prototype improvements.
Kaz Uchida, from Japan-based mineral resources and metal products provider Mitsubishi Corporation Metals Group’s venturing unit, presented on behalf of the group’s Israel-based portfolio company SoftWheel, which has developed a smart wheel automotive system. Established in 2011, the company’s technology incorporated an adaptive in-wheel suspension system for wheelchairs, cycles and automotive industries.
After these presentations, the main stage hosted a panel discussion on healthcare, focused on living better and longer. The session was moderated by Erika Smith, CEO of ReNetX, a therapeutics developer for spinal cord injury, stroke recovery and Alzheimer’s disease.
The panel included Thomas Luby, head of Johnson & Johnson JLabs, an incubation program of the pharmaceutical producer, Ferran Prat, senior vice-president of research administration and industry relations at the MD Anderson Cancer Centre, Koji Murota, president and CEO of Kyoto University Innovation Capital, the tech transfer office of Kyoto University, and Doron Benn-Meir, vice-principal of enterprise at the University of Melbourne and director of BioCurate.
The panel discussion initially focused on challenges in making university-generated intellectual property (IP) in life sciences. Panellists agreed that university innovation was discovery-oriented and deficient on market and commercial orientation. However, as Luby pointed out, the healthcare and pharmaceutical industry was looking to increase its minority holdings of externally generated medical innovation, so the opportunities were significant.
All panellists concurred that developments in regulatory environments concerning IP and university-driven innovation had had no significant impact in recent years.
Panellists also discussed new technologies with the potential to be revolutionary in healthcare. They said promising areas for a significant breakthrough were advances in therapeutics for neurodegenerative diseases in old age, the datafication of healthcare and life sciences, cancer treatments and precision medicine – the combination of genomics and traditional therapeutics.
Rosemarie Truman, founder and CEO of the Centre for Advancing Innovation, said research had shown that the US, the UK and the EU would lose all innovation leadership positions by 2029. She said they had already lost the lead in number of patents and grants. While these economic actors had a negative or near-zero growth rate in producing quality patents for the past two decades, China, Singapore, Brazil, Israel and India had high-quality patents from 2005 to 2015.
Truman added that although the US spent a considerable amount in research expenditure relative to its GDP, R&D spending was not driving its GDP growth. However, she said hope lay ahead as venturing in startups contributed to more efficient patent usage and better patent effectiveness. She concluded that the centre’s rigorous due diligence and capital-efficient management models served to accelerate startups for excellent investor returns.
Brian Richards, managing director at Ireland-headquartered professional services company Accenture, had a conversation with Russ Capper, executive director at Houston Exponential, a program that drives Houston’s innovation economy development. Capper said Mayor Turner’s Innovation and Technology Task Force, the Houston Technology Centre and the Greater Houston Partnership’s Innovation Roundtable had joined forces to create the HX Venture Fund to strengthen Houston’s innovation initiatives and convert the region into one of the top 10 startup ecosystems by 2022.
On the second day of the conference, its co-chairman Tom Whitehouse, contributing editor at Global Corporate Venturing gave an update on energy venturing. When low-carbon and cleantech bubbles burst in 2008, promises to solve environmental questions had been unkept. Few VCs and corporate VCs stuck with the field until things changed more recently. Now, the low and zero-carbon companies and their technologies were backed by traditional energy industries and they collaborated with each other rather than compete.
In the first session, Oleg Mikhailov, partner and managing director at management consultancy Boston Consulting Group, introduced and moderated a panel discussion on how robots worked with energy.
Nick Radford, chief technology officer at US-based engineering applications robotics systems developer Houston Mechatronics, said the company’s robotics and mechatronics technology employed technologies directly from the laboratory and built integrated hardware and software systems with state-of-the-art engineering. These systems would improve electric motors and provide greener and more efficient solutions in automation, he said.
Julian Ware, general manager at Canada-based autonomous car technology developer Clearpath Robotics, said that with his company’s technology, software-controlled vehicles worked with people to provide a better and smoother material transport operation.
Alexei Poluboyarinov, CEO of US-based autonomous mobile robots manufacturer SMP Robotics, said his company’s autonomous mobile robots were powered by solar energy. Having already secured 10 patents, its focus was on commercialising robots in the energy sector, such as gas leak inspection robots.
Vaseem Khan, vice-president of global engineering at US-headquartered engineering, construction and installation provider McDermott, said his company worked mainly with the oil and gas industry, providing infrastructure and technology solutions. Khan helps push McDermott’s efforts to digitise the energy industry.
In the second session, moderated again by Tom Whitehouse, venture-backed digital, IoT and big data businesses gave short presentations on their respective companies.
Gene Dolgin, vice-president of strategy at US-based weather prediction technology developer ClimaCell, said his company employed sensors from wireless and IoT networks, instead of conventional radar-based systems, to detect weather conditions in a specific environment at lower latitudes. Autonomous vehicles, drones and aviation industries were said to be the primary beneficiaries of this system. Airline operator JetBlue, apart from being an investor in its series A and B rounds, is also a customer.
Sanjay Bhatia, vice-president of finance at US-based DNA sequencing and data science services provider Biota, said the company’s DNA sequencing and data science services offered production profiling, sweet-spot identification and reservoir connectivity. Its technology offered an improved reservoir production and reduced environmental impact.
They concluded that the digitisation of energy had barely begun.
In the following session, Glenn Vonk, director of business development and alliances at the National Council of Entrepreneurial Tech Transfer (NCET2), introduced university startups involved in federally funded R&D.
Jeff Xu, founder, president and CEO of US-based solar-powered energy and wellness management systems developer Leaptran, gave a presentation on how the company’s system utilised machine learning, visualisation software and customised hardware platform to enhance investment return and asset management.
John Griffin, CEO of zero-carbon low-cost electrical power solution provider Terracoh, described the company’s carbon dioxide plume geothermal (CPG) technology, through which carbon dioxide is transformed to a geologic working fluid. Terracoh’s systems allow negative emission power production and affordable energy storage, and convert underproductive elements into clean energy.
Arun Gupta, founder and CEO of US-based solar concentration platform developer Skyven Technologies, said the company utilised its “intelligent mirror array” technology to harness sunlight to create thermal energy.
Dave Goebel, CEO and founder at the University of Minnesota’s spinoff Enverde, saif his company generated energy using waste, including livestock manure, food manufacturing detritus and plastic garbage.
Stephane Meystre, CEO of US-based online healthcare platform developer Clinacuity, illustrated a system for de-identifying clinical notes in the electronic health records to facilitate confidentiality.
After the morning break, the main stage featured a fireside chat on corporate venture investments whose focus was on combining corporates around single-mission venturing strategies. The featured speakers in the conversation were Jeff Peters, principal at Autotech Ventures, and Guillermo Borda, managing partner at HX Venture Fund. Both Houston-based venture firms have several corporates among their limited partners (LPs). They target promising emerging enterprises in the advanced mobility space.
HX Venture Fund pools money from corporate investors in Houston and invests in VC firms outside the city and Texas to encourage them to invest in startups in Houston from the mobility space. This model, as Borda said, had already been successfully applied in Michigan.
Autotech Ventures, on the other hand, as Peters explained, was “becoming smarter by leveraging technical expertise from corporate LPs” while creating an ecosystem around transportation. Both speakers agreed that while there were challenges in bringing corporates together and generating positive synergies among them.
Valery Krivenko, chairman of Angara Industries, spoke of fusing smart chemistry with the industrial IoT. Angara Industries claims to be using data-powered smart chemistry to clean expensive industrial equipment. Sensors enable clients to carry out cleaning without shutting down an entire plant.
In the following session, Neil Foster, partner at Baker Botts, introduced and moderated the presentations by venture-backed and emerging businesses with cyber and cloud solutions.
David Drescher, CEO of US-based control system cybersecurity platform provider Mission Secure, said his company offered cyber-visibility and endpoint protection for operational technology. The platform was networked and could be managed by a non-IT professionals.
Jeff Faris, sales executive at US-based cybersecurity technology developer Synack, introduced cybersecurity platform Crowd Security Intelligence, which was crowdsourced and devised by a network of ethical hackers.The company aimed to help organisations fix security holes in their digital assets before criminal hackers could exploit them.
Ugur Tigli, chief technology officer at US-based cloud storage software developer Minio, talked about an open-source cloud system provided by the company for data storage to avoid unstructured data growth. Developers could build cloud storage-based applications compatible with major public and private clouds.
Paul Dietz, director of regional sales at US-based IT monitoring software developer ScienceLogic, said his company facilitated IT management for resources, services and applications. The company’s platform allowed users to navigate public cloud migration and explore the interrelationships between hybrid IT assets.
The first afternoon session was introduced by Tom Whitehouse and moderated by Temple Fennell, co-founder and managing director at Clean Energy Ventures. It touched on the theme of low carbon and how venture-backed emerging businesses sought solutions. Fennell said his firm, a US-based angel investment fund, backed early-stage clean energy firms and provided management support and mentoring to portfolio companies.
Matt Stevenson, chief financial officer at Canada-based carbon capture technology developer Inventys, discussed the company’s technology which focused on lowering the cost curve of carbon dioxide captures from industrial fuel gas streams with a rotary absorption machine.
Keith Guerrini, vice-president of business development at BP Ventures-backed commodities digitisation platform developer Xpansiv, showcased the company’s platform which used big data and distributed ledger technology to help commodity producers discover the value behind operational data through visualisation and analytics.
Joe Zhou, CEO of US-based grid-scale energy storage systems developer Quidnet, said his company’s mission was to produce a carbon-free electric grid. The system would store water under pressure for use in generating hydroelectricity.
Trevor Best, CEO of US-based plasmonic photocatalytic reactor developer Syzygy Plasmonics, said his company had developed a chemical reactor driven by light, aimed primarily at fuel cell vehicles.
Tim Latimer, CEO of US-based clean energy technology developer Fervo Energy, said his company generated power from enhanced geothermal systems. He said Fervo had raised funds from Breakthrough Energy Ventures, a US-based VC firm funding cleantech companies, and was partnering Schlumberger, a natural resource drilling services provider.
In the second afternoon session, Satish Rao, partner at US-based management consulting firm Clareo, introduced a fireside chat on new venturing approaches to startups.
Wal Van Lierop, managing partner at Canada-based VC firm Chrysalix Energy Venture Capital, said his firm focused on early-stage financing for the nuclear fusion, smart mining and solar steam generator sectors and invested strategically in robotics and automation companies. An example was portfolio company MineSense which had all the criteria – “a little bit of hardware, data analytics and a new business model”.
Taylor Shin, director of ventures and growth at General Electric-backed oil services company Baker Hughes, said his company provided products and technology for drilling and production in the oil and gas industry which used digital solutions to reduce both environmental footprint and cost.
The final session of the program featured several strategy and technology-themed roundtable discussions introduced by Paul Morris, chief investment officer of the VC unit at the UK government’s Department for International Trade. Participants debated themes related to term sheets, strategic technology deployment, water challenges and new corporate venturers in energy and mobility.