The Rice Alliance held its Energy and Clean Technology Venture Forum last week. The organizer, Rice University, through its Rice Alliance for Technology and Entrepreneurship, is an active supporter of technology commercialization, entrepreneurship education and the launch of technology companies. Its popular business plan competition gave $1.5M in prize money in 2012, billed as the richest ever.
This 10th annual venture event featured 43 promising emerging companies pitching to 400-500 investors and industry professionals. Entrepreneurs came from as far away as South America and Europe. Technologies ranged across nanotechnology, material sciences, photovoltaics, biofuels, waste, power management and distribution. Naturally, this being Houston, many technologies had immediate application to petroleum exploration.
Nine presenters were pure-play software companies, with big data analytics dominating. Applications for sustainable power management were the most popular. These capital efficient, lean startups stayed focused on delivering niche analytics applications to build immediate traction, avoiding the temptation to pitch as analytics platform plays.
Analytics in the Utility sector is seeing high powered, 30% pa growth and is projected to be a $800M market by 2016. One reason is that smart meters are being rolled out under regulatory mandates with deployments reaching 65M meters in 7 years. It took cell phones 20 years to reach 65M units. The massive volume of new data produced by these meters is overwhelming. Smart meters come with the promise of energy efficiency for consumers who are footing the bill for these high cost deployments. Utility companies are being pushed hard to solve the big data challenges and deliver benefits. Analytics is important to resolving the data, providing operational efficiencies and delivering power grid stability.
Houstons traditionally an oil and gas town. Thats changing pretty fast for non-petroleum energy and clean tech. The entrepreneurial and venture communities are expanding. One exciting, new resource is the Surge Accelerator focused exclusively on energy software. Five of the companies at Rice were graduates of Surges first class.
Investors came from both venture and industry. Intel Capital, looking for technology to grow the demand for chips, is a good example. Petroleum companies are actively investing in technology outside the confines of their proprietary R&D centers. Companies like ConocoPhillips, Chevron, BP, Shell and Statoil invest out of their own venture funds. The traditional mandate that these investments generate proprietary competitive advantage for their own operations is softening.
If one metric were to capture the optimistic outlook for the energy and clean technology sector, its that the price of oil, the worlds primary source of energy, will remain generally stable, bouncing between $80 and $100 per barrel backed by continued global growth in demand.