A Startup Ecosystem Pioneer, Houston Tech Center Closes After 19 Years

Xconomy Texas — 

Houston—The Houston Technology Center, the city’s oldest organization dedicated to boosting local startups, has been shut down.

HTC, founded as a non-profit in 1999, was last October brought under the umbrella of a new initiative called Houston Exponential. HX, as it is called, was unveiled as a comprehensive citywide approach to boosting Houston’s community for innovative startups.

As of Wednesday, HTC was closed and officials are encouraging founders of the 60-odd companies that had been working with HTC’s accelerator programs to find new homes. Both Station Houston and the Texas Medical Center are offering discounted rents for a limited period. The HTC had operated from a headquarters in downtown Houston and managed three satellite offices in the northern, southern, and western parts of the city, specializing in oil and gas and aerospace innovation.

“We have a great legacy,” says Deborah Mansfield, the HTC’s former director of life sciences acceleration. Mansfield says she was one of five acceleration directors, as well as some support staff, who were laid off. “We had 600 companies in that program total; we were a resource when there wasn’t anything else out there.”

Among the HTC successes are Idev Technologies, a stent maker that was acquired by Abbott Laboratories (NYSE: ABT) in July 2013 in a $310 million deal, and Bellicum Pharmaceuticals, a Houston biotech that went public in a $140 million IPO in 2014. (This week, Bellicum hit a speed bump in the development of its lead drug candidate after the FDA halted clinical trials because three patients had unspecified brain disease.)

Despite those and other wins, the HTC program, which required a minimum residency of at least two years, was deemed ill-suited for the sort of faster-paced startup environment that now dominates regional innovation ecosystems. Most accelerator programs today only last for three months.

“It was just looking at HTC and assessing: is this the right model in 2018?” Michael Sklar, head of HX’s acceleration strategy committee, said in a Houston Chronicle article. “Is this the right model going forward?”

The Houston civic and technology leaders have worked to expand the number of organizations designed to nurture startups in recent years. The Texas Medical Center established its Innovation Institute, which sponsors a twice-yearly accelerator program called TMCx devoted to health IT and medical devices and recently launched its own venture fund. Both JLabs and AT&T’s Foundry have set up shop next door as well.

In 2016, Station Houston started downtown as a co-working and gathering spot for startups in other parts of the tech sector. Houston Exponential hopes to capitalize on that momentum and transform the region into one of the nation’s top startup ecosystems by 2022.

One key component to that effort is the newly established $40 million fund of funds, which is being run by Guillermo Borda, who came to Houston last fall from Los Angeles where he was an executive with Bank of America. Borda says he expects to announce a new investor into the fund by early fall.

In the meantime, he says Amazon’s decision to leave Houston off of the short list for its HQ2 project has resulted in some soul-searching among the city’s innovation leaders.

“Let’s don’t let a good crisis go to waste,” Borda says. “Well, not that it’s a crisis but certainly an indication of some of the changes that need to occur to make Houston more competitive in innovation.”