Houston’s Arundo Taps Into the Industrial Internet for Energy Firms

Houston—Oilfield operations are increasingly digitized, with each piece of equipment loaded with software and sensors spitting out reams of data.

“Heavy equipment is becoming instrumented. Now, what do I do with all of that information?” asks Stuart Morstead, COO at Houston-based Arundo Analytics.

He says the company can help oil and gas companies, as well as those in maritime operations and minerals and mining, answer that question with Arundo’s software platform. “Industrial data is dirty. How do I clean that?” Morstead says. “We leverage data to look at historical performance or actually build a set of predictive models to do a much better job of manning the asset.”

Arundo’s software ingests both structured data—coming from individual components on an oil rig, for example—and unstructured data such as weather readings. “We build a set of predictive models and allow companies to avoid unplanned downtime or address issues before they happen,” he says.

So called “industrial internet” applications are becoming more common. Morstead says it’s no accident that GE (NYSE: GE), one of the world’s largest companies, has also invested in this kind of effort through its Predix program. The industrial giant has designed Predix to be a cloud-based operating system for industrial applications. “What they’re doing is building awareness in customers around the opportunities around performance from leveraging the technology,” Morstead says.

Users can reap substantial revenue increases with these diagnostic tools, especially in industries like oil and gas, where key equipment tends to be expensive and heavy. For example, Morstead says increasing the production rate of an offshore rig by about 10 percent could lead to almost $100 million in potential new revenue, at current oil prices.

Arundo has signed up oil and gas and maritime customers and Morstead says the company has proposals with utilities and renewables companies.

Arundo’s executive management team are all alumni of McKinsey & Company, and outside of Houston the company has offices in Palo Alto, CA, and Norway. Earlier this month, Arundo closed on a $4.9 million Series A funding round. At the time of its founding, in August 2015, Arundo raised a $2.7 million seed round from investors.

“The industrial internet is the next big thing,” Morstead says. “We want to be a part of it.”

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