A recent ranking shows that Houston’s startup community has a lot of potential for expansion.

According to a recent report by capital markets data and research company PitchBook, Houston is one among the top 50 startup hubs globally. Houston really ranks No. 50 in the list. However, upon closer examination of the data, Houston emerges as the leader in one crucial category.

With a growth score of 63.8 out of 100, the city has the highest growth of any American city and the seventh-highest growth score globally. Houston is positioned between Paris (64.4) and Washington, D.C. (61.7) in the growth bucket.

For the previous six years, activity related to venture capital deals, exits, and fundraising has been tracked by PitchBook. The growth score represents the short-, mid-, and long-term growth momentum for these events.

Hefei, a Chinese manufacturing hub for solar panels, liquid crystal displays, electric cars, home appliances, and Lenovo laptops, has the highest growth score (86.5) on PitchBook.

Based on a grading algorithm that uses exclusive PitchBook data on private firms, the overall rating is determined. Data on agreements, exits, financing, and other aspects of the system are used to calculate growth and development scores.

Houston ranks 50th in the world in terms of development, with a score of 34.1 out of 100. The size and maturity of a city’s startup network are gauged by this score.

Beijing, New York City, and San Francisco are the next three cities on the overall list. Dallas is ranked No. 36 while Austin is ranked No. 16 in other parts of Texas.

According to source, the rating “helps founders, operators, and investors assess locations when deciding where to expand or invest,”

PitchBook continues, “Network effects matter in venture capital: According to research led by Harvard professor Paul Gompers, investors get more than half of their deals through referrals.” “So it stands to reason that dealmakers should seek these networks out when deciding where to do business.”