The mimosas and Bloody Marys began flowing before 9 a.m. at Houston’s House of Blues, setting up a rock-concert after-party feel for the coming out party for a group of energy startups.
The entrepreneurs were the headliners at Wednesday’s Surge Day, the 2nd annual Demo Day featuring Surge Accelerator’s latest class of entrepreneurs. The companies featured innovations ranging from a way to digitize land records to help oil and gas companies more easily secure mineral rights to using seismic waves to get clearer images and reduce risk in exploration wells.
“Crazy ideas happen when you connect people across unusual dimensions across different industries,” says Russ Conser, program manager with Shell Game Changer, a Surge sponsor. “This is how to make really cool things happen. Energy is going to be solved in Texas and it will take the technical talent of people in Houston to make it work.”
Surge Accelerator was set up two years ago specifically to spur innovation in the energy industry. And now, it will make its first move overseas through a partnership formed with an Israeli accelerator. Azimpo, based in Tel Aviv, will use Surge’s business model to support its own startups in energy and manufacturing. “If this works, we will seed others in strategic cities all over the world,” says Kirk Coburn, an Xconomist and the Houston accelerator’s founder and managing director.
Wednesday’s event featured a backdrop that featured purple spotlights and a soundtrack that blasted “Danger Zone” from the movie Top Gun and “Back in Black” by metal band AC/DC. Taking turns, a dozen entrepreneurs strode onstage to the music to pitch about 500 venture capitalists, angel investors, and potential customers sitting in the audience below. Each startup is aiming to raise between $800,000 and $3 million.
A mentor from each company—in one case, it was the startup’s first major customer—made introductions and talked up their mentees much like a parent happily showing off blue ribbons won by their kids.
The startups, whose entrepreneurs hailed from close to home in Houston to Spain, Ireland, and Norway, all aimed to create a digital oilfield that would make doing business more efficient for those in the energy industry. (For a complete list of Surge companies, click here.)
“Every home in Austin and Houston could be powered with the power wasted by U.S. power plants alone,” says Javier Garcia, the CEO of Optimitive, a startup which came to Surge from Spain. With slideshows of Homer Simpson and Montgomery Burns, Garcia explained how his company aims to use artificial intelligence to help those plants run more efficiently.
The testosterone-driven setting was broken up a bit by the sole woman startup CEO, Siv Hilde Houmbe, of Secure-Nok, a Norwegian cybersecurity firm that is targeting the oil and gas industry. Its software can be used in control systems in drilling rig platforms, refineries, and other critical infrastructure. “More than 40 percent of the critical infrastructure targeted by malware was in the energy industry,” she says.
Other pitches came from companies specializing in products that can help oil companies monitor tank levels online, instead of the manual process that right now adds risk, and more efficient use of seismic waves for subsalt imaging to lower the risk in exploration wells.
Surge focuses exclusively on software companies designed to innovate and promote efficiencies in the energy industry, a sector not typically known for its entrepreneurial standouts. While industry giants have venture arms, Coburn says that Houston lacked a fully formed ecosystem that included innovation at its most basic level—startups and the entrepreneurs who lead them. So he formed the accelerator two years ago.
Its philosophy attracted Avikam Levanon, Azimpo’s managing director. He plans to bring five to 10 of his startups to Houston this fall to interact with companies in the energy and manufacturing sectors—two industries that are underrepresented in Israel’s startup community.
Each company at Surge receives $30,000 in funding and the usual assortment of business support and mentoring sessions. Surge can also invest up to $50,000 in optional convertible notes in each startup, something it did in half of the first year’s class. In return, the for-profit accelerator takes 6 percent of the company’s equity.
Jeff Martin, vice president of sales and business development at Energy Infomatics, called his experience at Surge invaluable. “If you’re in the energy space, they know everybody,” he says. “It really provides credibility when you’re making those calls.”
