Spotlight: Abby Mercado – Altira Group
In this first in a series of five Spotlight Interviews, we spent a few minutes with Abby Mercado of Altira Group, a Denver-based venture capital firm focused on helping energy tech entrepreneurs build the future of oil & gas. Altira has been a sponsor of the Denver Energy Tech Showcase (“DETS”) since the beginning. Abby tells us more about Altira and its portfolio companies below – as well as what makes DETS such a unique event.
Prism Group: Tell me a little about Altira Group.
Abby: Dirk McDermott founded Altira Group, focused exclusively on the oil & gas sector, in 1996. His vision was that, in an industry that has only ever gotten better with technology adoption, there was an opportunity to fund the entrepreneurs who help our industry make crucial step-changes. We are currently investing out of our sixth fund, which has a unique structure.
What makes Fund VI different is that we have brought on upstream companies that are typically the customers of energy tech companies as investors. Pioneer Natural Resources, Devon Energy, Apache and EQT combined represent half of our LP base. As our LPs, they have a first look at the innovative technologies that can help them develop their unconventional resources in the best ways possible. As tech leaders, they are quick-adopting customers of our portfolio companies and often provide important product guidance. We like to think that start-ups enjoy working with Altira because we provide them with intimate access to these large potential customers that can help them commercialize quite quickly.
Prism Group: What kinds of technologies is Altira investing in?
Abby: We are especially interested in technologies that help upstream companies develop their assets better and more efficiently; technologies that promise to cut costs, increase production, streamline supply chain and make the industry safer and more environmentally friendly. We are looking at, or have invested in, everything from IIoT to the electrification of the oilfield to AI to big data analytics.
An example of one of our portfolio companies is ResFrac, which has developed the industry’s first 3D, cloud-based reservoir and frac simulator sold to upstream companies as a SaaS solution, enabling operators to evaluate the impact of various completion techniques on production. A lot of the potential investments we evaluate cut costs; ResFrac enables production uplift, and with that, substantial NPV increases.
Prism Group: Why did Altira decide to sponsor DETS?
Abby: As enthusiastic investors in oil & gas tech, we are always looking for ways to support and strengthen the energy tech ecosystem at home in Denver. We travel a lot to places like Houston, Oklahoma City, Pittsburgh and Calgary, but there is something special about Denver. The Colorado frontier spirit is alive and well here, and the digital oilfield has really taken hold. There is amazing talent in Denver – software developers, engineers, data scientists and so on – these folks see the opportunity to make the oil & gas industry better with innovation. Altira wants to support our hometown entrepreneurs as much as we can.
Prism Group: How did Altira benefit from its association with DETS?
Abby: We have sponsored all three events to-date. At Altira, we are in the trenches with our portfolio companies as trusted partners and business builders – we don’t do passive portfolio monitoring. DETS is a great venue for connecting our portfolio companies with leading Denver operators – and even those who travel from outside Denver to attend the event.
DETS has attracted some fantastic exhibitors and attendees. Because of DETS, we have been able to discover some energy tech companies we’ve never heard of before. Being a sponsor provides us with visibility; it is important for the ecosystem to know that Altira supports the ecosystem!
Prism Group: We appreciate your support! Can you provide readers with an example (e.g. – portfolio company, new customer, new relationship, etc.)?
Abby: Absolutely. We recently invested in ResFrac, the company I mentioned prior, which is a fully-coupled, 3D reservoir and frac simulator. The company exhibited at the last DETS event while we were under term sheet and performing due diligence. At the event, I located the CEO of an upstream company in Denver who has become an acquaintance of mine over the years and introduced him to Mark McClure, ResFrac’s CEO. My contact, who has a similar geomechanics background as Mark, was dubious of ResFrac’s solution at first, but Mark was able to convince him otherwise. After a follow-up meeting with my contact and his Completions Manager, the Denver upstream company became a fast-adopting ResFrac customer. I like to think that Mark would have closed the sale on his own, but the DETS introduction definitely accelerated the process.
Prism Group: What areas of energy tech are you most excited about?
Abby: All of it! First off, communications at the field level are key – that’s why we’ve invested in Infrastructure Networks. Upstream companies are collecting more data than they know what to do with. In fact, the oil & gas industry recently surpassed the global healthcare industry in terabytes of data. Today’s million-dollar question: How do you make sense of all that data? Access to data has the potential to dramatically reduce costs and increase productivity, but only if you can process that data intelligently.
Back to Infrastructure Networks though. Before HQ can analyze field data, it has to be collected, without interruption, and sent over a network, in real-time and without latency. Important and time-critical decisions are made based on this data – there’s no opportunity for mistakes. And often, oilfield operations are in remote areas with little to no connectivity – the Infrastructure Networks advantage is that they are the boots on the ground, and communications is their core competency.
AI, without question, will infiltrate the industry in a big way, sooner rather than later. AI is a fun buzzword, but at Altira, we seek AI investments that actually make a business case for oil & gas companies. We were lucky to find an investment in ThoughtTrace, which allows for better, faster and smarter contract analysis through the use of AI (think oil & gas leases, of which there are thousands and thousands – and they are either archaic or written in ways that are meant to confuse the reader). In one case, with a large operator in Oklahoma, ThoughtTrace reduced a team’s time diligence’ing a divestiture package by over 50 times, while maintaining better accuracy than the status quo.
Another trend is making formerly dumb iron a whole lot smarter. The future will hold machines directing themselves, having learned from past errors as well as achievements – making processes quicker, more efficient and getting humans out of harm’s way. Wouldn’t it be cool to press a button in Houston and drill a well outside Midland?
Prism Group: What is the best thing about DETS?
Abby: Getting a community of energy tech enthusiasts together – entrepreneurs or budding entrepreneurs, oil & gas operators, investors – these people are all there. DETS is a unique networking event that involves groups who are striving to solve big problems. It is also a great place to uncover some of those hidden gems. We are thrilled to be part of DETS year-after-year!
About Prism Group
Prism Group is a multi-talented marketing and investor relations agency for leaders that are serious about building value. Our proprietary processes for building brands, generating awareness and establishing Thought Leadership and award-winning work help our clients drive top-line revenue and bottom-line profitability. We leverage state-of-the-art technology to optimize productivity, effectiveness and ROI.
We focus on Energy Tech, Oilfield Services, Oilfield Equipment, Energy Finance and E&P sectors.