San Antonio startups still fall short on venture capital funding; Austin companies jet ahead

San Antonio startups collected more venture capital in 2021 than they did the year before — and still fell farther behind their peers in Texas’ other big cities in the hunt for early-stage financing. Lew Moorman, a leader in San Antonio’s burgeoning technology industry, is frustrated by the gap. But he’s not surprised. “There’s too many of us in tech declaring victory and not recognizing our shortcomings,” said Moorman, chairman of the San Antonio industry group Tech Bloc and co-founder of Scaleworks, a local venture equity firm. “We need to take a hard look at ourselves and ask if this bothers us or not.”

Attracting the attention of venture capitalists — and their wire transfers — is key to building up San Antonio’s web of cybersecurity, information-technology and biotechnology companies. With few of deep-pocketed investors focused on companies here, it’s harder to lure entrepreneurs to the city. In 2021, investors plowed $93.1 million into 18 deals in San Antonio, according to Crunchbase, which tracks investments in startups. That was almost double the $47.1 million raised in 16 deals in the year before. But those numbers represent a small fraction of the investment hauls of companies in Texas’ other major urban centers. Dallas startups attracted investments of $1 billion in 107 deals last year, down from $1.3 billion in 108 deals the previous year. Houston firms brought in $1.7 billion in 136 deals, a jump from $475.33 million in 91 deals in 2020. And Austin startups blew them all away. They secured investments totaling $5 billion in 368 deals in 2021, up from $2.2 billion for 294 deals the year before.