Houston Investors Step Up to Bring Tech Innovation to the Energy Sector
Houston—A new crop of investors are backing efforts to support oil-and-gas innovation in Houston—just over three years after the Surge energy accelerator shut its doors.
BBL Ventures, a newly formed investment and consulting firm that focuses on energy technologies, will, next week, formally announce an accelerator program at Station Houston next week. The idea, co-founder Patrick Lewis explains, is to buttress the traditional accelerator model with consultancy services, research, and early-stage capital to more successfully connect new energy startups with the oil-and-gas companies that seek to work with them.
“We’re reverse engineering the [accelerator] model,” says Lewis, who is also BBL’s managing partner. “Instead of entrepreneurs saying, ‘I think they have this problem,’ let’s start with the problem.”
BBL first starts by evaluating big energy companies’ needs using its proprietary iNavigator software in pilot projects. “We deploy this across the organization to capture pain points in real time: the driller on the rig, technicians in the plant, and the global operations manager in corporate,” Lewis says. “They all get to see a dashboard and analytics across the organization.”
The companies export that information to BBL, where it’s analyzed. “We then send them back a dashboard and analytics at an industry level, where they are different or similar to the rest of the industry,” he says.
Next, BBL looks for common problems among the energy companies, trying to pair those with startup entrepreneurs who might have solutions. “We have a reverse pitch,” Lewis adds.
So far, he adds, BBL has about 100 startups and a handful of major energy companies in the pipeline. One current pilot involves helping ExxonMobil evaluate a refinery in Baytown, TX, looking for places where robotics could be used.
Developing an accelerator model tailored to the oil and gas industry make sense, says Brett Perlman, CEO of the nonprofit advocacy group Center for Houston’s Future and the former commissioner of the Public Utility Commission of Texas, which oversees telecom and electric utilities industries in the state.
“It can take 30 years from lab to pilot to commercialization and scale,” he says. “The [traditional] venture capital model isn’t patient capital. Things that work well and create unicorns in social media don’t work well in energy.”
Another Houston energy investment firm, Eunike Ventures (pronounced “unique”), is employing a model with similarities to BBL’s to promote innovative technologies in the oil and natural gas sector. In particular, the firm has agreements with Anadarko, Equinor Technology Ventures, and Hess to form the Hybrid Accelerator for Energy Technology. Eunike’s accelerator will work with the oil and gas operators to identify, screen, and pilot innovative tools as well as mentor startup entrepreneurs.
“It’s critical to work with experts who have operational experience in integrating oil and gas products and services,” Amy Henry, Eunike’s CEO, said in a press release last week. “We can help facilitate technology trials that are done right with process safety in mind and minimal disruption to ongoing operations.”
All in all, Houston is hoping to leverage its status as the world’s headquarters of the energy industry into leadership in oil-and-gas innovation as well. Houston Exponential, a technology-focused civic organization founded last year, has made investing in tools like industrial IoT, robotics, and materials sciences—all key in energy—a priority. And The Cannon, a co-working space located in the western part of Houston known as the “Energy Corridor,” has formed a partnership with Chevron Technology Ventures.
Lewis, who was a mentor to Surge startups, has spent his career in energy investment working with young startups and public companies, as well as private equity. About five years ago, he built a digital-focused market intelligence business with ETR&D, a New York-based firm that measured and analyzed the needs of technology executives in some of the world’s largest companies.
“Then we would go to the startup ecosystem to try to find solutions to those tech gaps,” he says. “I thought, ‘let’s do it better and focused on energy and natural resources.’”
BBL hopes that its approach will help it avoid Surge’s fate, which folded under the weight of collapsed energy prices five years ago. Lewis also says he thinks that executives in big energy companies have made engaging with the tech world a larger priority.
“They’ve stood up innovation teams and given them directives, KPIs, and budgets to make this happen,” he explains. “Digital transformation is the buzzword in the industry. On the tech side, we’ve never seen a greater confluence of technologies: cloud, analytics, AI, industrial IoT, AR, VR. It’s the perfect tailwind and timing for this model.”