Surge Focusing on More Mature Energy Companies, Raising Bigger Fund
(Page 2 of 2)
Angel Network and the Mercury Fund—he also invested $100,000 personally—to serve as the seed funding for the accelerator while bringing on key oil and gas partners such as Shell and Schlumberger.
Sam Long, a U.S. Naval Academy and the University of Cambridge graduate who is also a Houston native, came on board to run the day-to-day operations at the accelerator in January. “Surge initially was an experiment: Can you do early stage energy technology in Houston?” he says. “If the answer is yes, then what?”
Clearly to Long and Coburn, the answer is yes—and now they are on to the next stage. “This is a little bit of a rebranding, from accelerator to ventures,” Long says.
Long’s appointment frees up Coburn to focus on other long-term strategy, namely the raising of a $30 to $50 million fund to enable Surge not only to provide initial seed funding to energy startups, but to make follow-up investments as the companies mature.
Long says he also wants to expand Surge’s mission to be a producer of energy innovation information. “We want to fully embrace our partnership with McKinsey and do some thought leadership in this space,” he says. “We want to produce white papers with profound thoughts that are ours and originate from this building. It’s a way to be more proactive when it comes to supporting innovation.”
Along those lines, the companies that made their debut at this year’s Surge Day were much further along than those in previous classes. Though young, most of the startups already had revenue prior to joining the accelerator. “Almost all had revenue—showing that Surge is looking harder at product-market fit being established prior to accepting the company into the accelerator,” Garrou says. “This is a trend that you are seeing across the country.”
And the entrepreneurs, save for one team, are targeting the oil and gas industry as customers. (The exception, Vert, is a software platform for acquisition and financing of solar projects.) Previous classes had a broader mix of industry segments, from oil and gas and solar to wind and water.
“Our investment thesis is being refined toward tech innovation in oil and gas specifically,” Long says.