After going fully virtual in Dallas during the pandemic, Capital Factory is opening a new physical space for the region’s entrepreneurs.
The Austin-based accelerator and investor plans to launch a Center for Health Innovation at Pegasus Park in Dallas. The new center will connect startups, corporates, and research players in the space with each other, locally and across the state.
“Health care is already a big strength of Dallas,” Bryan Chambers, president and co-founder of Capital Factory, told Dallas Innovates, adding that health care will always be a leading sector over the next decade. “We’re moving into a new era of deep tech, where the lines of computer science, life science, and robotics are blurring so hard. This is a very intentional initiative for us to enter one of the largest markets in the world more intentionally.”
Creating collaboration across industries
While the new space at the biotech-focused Pegasus Park development bears the name “Health Innovation,” the center will be open to startups working in various industries. The new center builds off the success Capital Factory has seen with its Center for Defense Innovation in Austin. It aims to bring together early-stage companies working on different solutions to interact with companies and university researchers already operating at Pegasus Park. The goal: Sparking new ideas and finding ways to apply solutions from other industries into the healthcare space.
Chambers said it will also allow startups from its other locations in Austin, Houston, and San Antonio to collaborate with companies in the North Texas area. Like its other locations, the space will also be available for non-Capital Factory members to rent out coworking space.
“We have enough data points, evidence, and success stories to know that innovation is more accidental than people frequently think it actually is,” Chambers said. “It happens when people that are working on high-impact things run into each other when they normally wouldn’t run into each other. It’s a fresh approach to thinking about ideas and letting experts from other sectors collide and participate in the problem solving that drives innovation. We’ve seen it in the defense sector, we’ve seen it in the government sector, and it’s going to happen in the healthcare sector, as well.”
Building on local expertise
Partnering with companies like McKesson and Blue Cross and Blue Shield of Texas’ C1 Innovation Lab for the launch of the Center for Health Innovation, Capital Factory expects to open its doors on the 16th floor of Pegasus Park before the end of 2023.
Capital Factory chose Dallas to focus on health innovation due to the density of companies in the region operating in the space, as well as nearby research players like UT Southwestern and UT Dallas that are doing research and spinning out startups in fields like biomedical engineering and computer science, Chambers said. He added that the location at Pegasus Park will put companies working out of Capital Factory’s new space in close proximity with existing tenants like coworking laboratory BioLabs, genetic medicine company ReCode Therapeutics, gene therapy firm Taysha Gene Therapies, and accelerator Health Wildcatters.
“Building a focused network and a focused theme with a focused set of partners is going to be really impactful for businesses that are solving solutions, that have applications to the health care sector that might not think about selling into healthcare,” Chambers said. “The gravity of the Center for Health Innovation is that it pulls in everybody from everywhere and creates more opportunities for people to do business together, and to treat Texas like one big city.”
‘Doubling down’ on Texas
After operating in Austin for more than a decade, Capital Factory made its first expansion beyond the state capital in 2018, opening the 26,000 square-foot, DEC Network-affiliated Dallas space at The Centrum in Uptown. After putting a pause on in-person activity and having to furlough dozens of employees due to the pandemic, Capital Factory shuttered its operations in that space in November 2020.
“It really gave us the opportunity to rethink our business model and rethink the opportunity to build a new type of space,” Chambers said. “Emerging post-COVID, we recognize that building community is a little bit different in each city and community can be regionally focused. It can also be sector-focused, as a part of building out and connecting all of Texas.”
Despite that, the organization has continued to host virtual and in-person meetings and events, in addition to having boots on the ground in the region since then. Chambers said Capital Factory has a local team of about six, most recently bringing on former Omron Automation account manager Thomas Bunting as its newest venture associate. Capital Factory has also continued to invest in the local ecosystem through its investment arm’s rolling fund, which launched last March. Chambers said the organization has been making around 15 to 16 investments per quarter—about one each week—with investments ranging between $50,000 to $250,000.
“We’re in the business of erasing boundaries in Texas—full stop,” Chambers said. “We have plans to double down on the Texas fund and continue to grow it at scale and continue to write checks.”
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