Image of Austin, Texas
Photo by Carlos Alfonso on Unsplash

Located in the south-central part of the country, Texas is the second-largest state in the US, extending nearly 1,600 km from north to south and around the same distance from east to west. The state is known for its great agricultural wealth, huge urban centres and most importantly, major oil and natural gas production. Despite the growth of manufacturing and other industries, the state is still heavily reliant on oil and gas, and any fluctuations in oil prices have a major impact on the state.

From on-demand workforce management platforms to developers of DIY testing kits, the home of Elon Musk and the soon-to-be home of Tesla has a vibrant startup ecosystem worth exploring.  


The analysis is based on data from Crunchbase, and overall, 38 startups have been analysed. Startups considered for this analysis are private entities that were founded in 2009 or later and have raised more than US$ 100 million of capital to date. 

The startups have been classified according to various industries based on data from Pitchbook, and the sector classification is based on the Global Industry Classification Standard (GICS). The sector classification is subjective and has been made considering the sector/industry the startups closely resemble.

Most of the Texas-based startups were founded between 2013 and 2016 and made up 45% of the total, followed by those founded between 2009 and 2012, accounting for 37%. 

Sector-wise classification of the total funding amount of Texas startups

Having raked in US$ 2.32 billion, the information technology sector ranks first in terms of total funding. Prominent industries in this sector include business/productivity software (US$ 822 million) and IT consulting and outsourcing (US$ 396 million). The IT sector also ranks first in terms of the number of startups, accounting for 34% of the total. 

StackPath is a cloud computing and services startup that enables developers to protect, innovate and accelerate cloud properties ranging from websites to IoT services. The startup’s platform boasts of serverless scripting, virtual machine deployment, centralized infrastructure management, among others. StackPath has raised US$ 396 million in two funding rounds between 2016 and 2020. 

Founded in 2020, Cart is an e-commerce-as-a-service startup that helps businesses scale online. The startup offers a whole host of services ranging from order fulfilment and marketing to growth capital and data science. Cart has raised US$ 143 million from prominent VCs such as Moonshots Capital, PayPal Ventures and Arsenal. 

Industry-wise classification of the total funding amount of Texas startups

With US$ 1.67 billion, the industrial sector is the second-largest in terms of the total funding amount. Prominent industries in this sector include human capital services (US$ 752 million) and aerospace and defence (US$ 347 million). 

Founded in 2014, Workrise is an on-demand workforce management and hiring platform. The startup simplifies the process of finding work and hiring in industries such as construction, defence, upstream and midstream oil and gas. It also offers staffing, training, and professional services. Workrise has raised around US$ 753 million in eight funding rounds in the past seven years.  Arrive Logistics is a freight brokerage platform that offers transportation management services. With its proprietary transportation management system, Arrive leverages data to improve processes, provide useful insights to its partners and deliver the best service. The Temasek Holdings backed startup has raised US$ 335 million to date across three funding rounds. 

Texas startups classified according to the number of funding rounds

The health care industry, with US$ 1.3 billion, is the third-largest in terms of funding. Prominent industries include pharmaceuticals (US$ 599 million) and diagnostic equipment (US$ 325 million). 

Founded in 2015, QuVa Pharma specialises in providing compounded sterile injectable pharmaceuticals in ready-to-use unit dose forms. Other services include process improvement consulting and new product development. The startup has raised US$ 356 million from prominent VCs such as Bain Capital Ventures, Goldman Sachs and Silicon Valley Bank. Everlywell is a developer of testing kits that provide access to transparent and insightful lab tests. The startup offers a wide range of DIY kits for thyroid, hormones, fertility and food sensitivity. To date, the startup has raised US$ 325 million across eight funding rounds between 2017 and 2021.  

Funding amount and the number of startups classified based on the latest funding type

Among the latest funding rounds, private equity ranks first with US$ 1.52 billion or 18% of the total, followed by Series E with US$ 1.29 billion or 16% of the total and debt financing with US$ 1.15 billion or 14% of the total. More than half of the startups have raised funds within one to five rounds, and around 42% have raised funds within six to ten rounds. Overall, Texas startups have raised a staggering US$ 8.26 billion in funding. With tech giants such as Hewlett Packard and Oracle moving to Texas, the information technology sector will receive a further boost, cementing its dominant position. 

For more extensive analysis and Market Intelligence reports feel free to approach us or visit our website: Venture Capital Market Intelligence Reports | VCBay.

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