Texas just leapfrogged Massachusetts in the startup money race, and that is not something you hear every day in venture circles. For the first time in at least 16 years, Texas-based startups have edged past their Bay State counterparts in quarterly venture funding. In the first quarter, Texas companies raised about $5.8 billion, while Massachusetts startups pulled in roughly $5.3 billion, a role reversal that is already sparking chatter in Boston’s tech community.
The tally comes from data compiled by PitchBook and the National Venture Capital Association, as reported by The Boston Globe. The Globe notes this is the first time in at least 16 years that Texas has outpaced Massachusetts and points out that as recently as last year, Massachusetts was still well ahead on an annual basis, $16.6 billion to Texas’s $11.7 billion.
Big Rounds Pushed Texas Ahead
Texas’s sudden surge was powered by a small cluster of massive late-stage rounds, mostly centered in Austin and Houston. Austin-based Saronic Technologies hauled in roughly $1.75 billion in a Series D, according to a company press release reported on by PR Newswire.
Humanoid-robot maker Apptronik reopened its Series A and pushed total Series A funding to about $935 million, as reported by TechCrunch. Satellite-communications firm CesiumAstro closed a $470 million growth round, according to Via Satellite, and restaurant-finance startup inKind raised about $450 million, per the Houston Chronicle. Put together, those concentrated late-stage checks show how a handful of jumbo rounds can swing a state’s totals in a single quarter.
Why the Shift Happened
Investors and industry watchers tie the Texas jump to a few overlapping trends: big defense and industrial-hardware financings, a rise in space and satellite manufacturing in the state, and a broader push to bring production back onshore, which naturally favors places with room and capacity to build things. The momentum has been amplified by high-profile announcements around chip manufacturing and other industrial projects in the Austin area, moves that industry reporting suggests could attract even more factories and capital to the region, according to Forbes.
What It Means for Boston Startups
None of this means Massachusetts is suddenly out of the game. The state still turned in some hefty raises in the first quarter, and its life-sciences and software ecosystems remain very much alive. Homegrown wearable maker Whoop closed a $575 million round in March that valued the company at about $10 billion, according to Hoodline’s local coverage, Fenway fitness upstart Whoop muscles to $10 billion after cash flood…