“Everything is bigger in Texas”: Why Israeli startups should consider Houston as their gateway to the US

When most Israeli tech companies target the U.S. market, their focus tends to be on the East and West Coasts, particularly New York, Boston and California. Texas, as well as the Midwest and Southwest, often fall by the wayside. Naturally, Israeli entrepreneurs are following their existing networks to the Coasts, yet a deeper look at Houston and the opportunities it presents would surprise many.

The saying “everything is bigger in Texas” can certainly describe Houston’s large industry clusters: it is known as the oil and gas capital of the world, home to one of the largest ports in the U.S., to NASA, and to the largest medical center in the world, the Texas Medical Center.

Houston Metro Area: the world’s 26th largest economy

Over the past two decades, there has been a remarkable transformation in Houston. Today, it is America’s fourth-largest city, with 7 million residents in the metro area, and the fastest rate of population growth among the 10 most populous U.S. metro areas. With a regional gross domestic product (GDP) of $490.1 billion, Houston is the nation’s seventh-largest metro economy and has grown by $100 billion (inflation-adjusted) over the past decade. If the Houston Metropolitan Area were an independent nation, it would rank as the world’s 26th largest economy.

The Houston region is home to 22 Fortune 500 companies, placing it fourth in the U.S. These corporations are mostly in the oil and gas sector, but Houston is also home to multinational companies in the fields of life sciences, manufacturing, logistics, maritime and aerospace. As these industries increasingly digitize, Houston offers many opportunities for Israeli technological developments. Moreover, the cost of doing business is significantly lower than in other major metropolitan areas, as the State of Texas has one of the lowest tax burdens in the nation.

From energy to COVID-related MedTech innovation, opportunities abound

Despite its vibrant innovation scene, Houston still has much room for out-of-the-box Israeli startups, especially those that can address its challenges. Houston’s energy sector is going through challenging times. The COVID-19 crisis has crushed the price of U.S. crude oil; combined with the growing need for clean/renewable energy, Houston is now forced to look for new, innovative energy technologies. The vision of attracting ‘Energy 2.0’ (clean, efficient, or renewable energy) innovation to Houston presents one of the greatest opportunities for Israeli startups.

In addition to overcoming energy challenges, Houston is scouting for tech solutions tackling coronavirus. Since the COVID-19 outbreak, Texas Medical Center (TMC) hospitals have been looking for telemedicine and remote monitoring solutions, as well as innovative treatments, to serve more than 20,500 COVID-positive patients they have treated to date. For example, Israeli startup Tyto Care has gained interest among TMC hospitals; the Houston Methodist Hospital is one of the selected American hospitals currently testing an innovative Israeli-American treatment for critically ill COVID patients, developed by NeuroRx Inc.

Israeli startups whose solutions have already been tested, piloted, and even implemented in other large hospitals or clinics could find opportunities in Houston, as TMC hospitals prioritize the more mature solutions; its campus serves as a testing ground for scaling up Israeli companies.

Meet Houston’s HTX TechList, the newest member of the Global Finder Network

How can Israeli startups navigate Houston’s market? How can they benchmark themselves against local innovators? Enter Start-Up Nation Central’s Global Finder Network initiative. Houston Exponential, a local nonprofit organization that promotes Houston’s innovation ecosystem, has partnered with Start-Up Nation Central as part of our Global Finder Network. Houston Exponential recently launched innovation discovery platform HTX TechList, modelled after Start-Up Nation Finder’s free online platform. The platform maps Houston’s startups, investors, multinational corporations and startup support organizations (hubs), allowing users to request moderated introductions and connect directly. With a vision to cover additional Texas regions in the future, HTX Techlist is poised to increase the visibility of the state’s innovators.

In parallel, Start-Up Nation Central is building a network of connections to identify partnership opportunities for Israeli technology companies, working locally with leading organizations, including Houston Exponential, TMC Innovation Institute, Ignite Healthcare Network, the Greater Houston Partnership, and more, as well as working closely with the Israeli Energy and Trade Office in Houston.

Houston’s leading tech hubs could boost Israeli startups

In the fields of digital health and medical devices, TMC Innovation at the Texas Medical Center (which treats 10 million patients a year) is considered the region’s most prominent MedTech hub. Through its equity-free program TMCx, it curates and promotes emerging startups that have already demonstrated proof of concept (ideally with a large healthcare system). Start-Up Nation Central encourages Israeli startups to reach out to us and explore the program.

We’re also collaborating with nonprofit Ignite Healthcare Network to promote women-led digital health and medical devices companies from Israel. Ignite’s annual pitching event provides an opportunity for women-led companies to gain access to leaders from TMC hospitals, investors, as well as corporate executives catalyzing industry changes.

In the energy field, Houston’s Halliburton Labs and Greentown Labs are considered the leading tech hubs. American oil and gas corporation Halliburton recently launched accelerator Halliburton Labs for innovative, early-stage companies that advance cleaner, affordable energy, by providing access to Halliburton’s lab facilities, technical expertise and business network.

Boston-based Greentown Labs, the largest climate tech startup incubator in North America, has picked Houston as its second location, to be opened in Spring 2021. Greentown enjoys the support of the City of Houston, the Greater Houston Partnership, as well as leading energy players such as Chevron Technology Ventures, and Shell.