While the oil market remains in a slump, a Westlake Village-based startup that provides software to the industry pumped up its resources with the closure of a $20 million Series A financing round.
Founded in 2009, Seven Lakes Technologies develops plug-and-play software that optimizes operations at oil and gas companies using data-driven analytics. The round was funded entirely by Carrick Capital Partners, a San Francisco-based investment firm that partners with technology-backed service companies.
Seven Lakes was founded by its current CEO, Shiva Rajagopalan, who recognized an opportunity in the inefficient, fractured structure of energy companies while working for Chevron in Bakersfield.
Seven Lakes Engagement Manager Shrivan Kamdar said inefficiency is “a problem across the industry,” so Rajagopalan took a leap of faith and signed a contract to develop software for a smaller company, LINN Energy. He recruited old Chevron colleagues and began building a data-driven operations manager with the goal of streamlining workflow across firms’ disparate departments.
With a strong oil market, the company was able to rely on its one client until 2012. By the end of 2013 it had five clients and began expanding its workforce, and in 2014 the firm grew to 25 clients and started searching for funding to support its growth.
Kamdar said the Seven Lakes team sensed the industry was ready for the change and wanted to be the first to bring it.
“Oil companies are going to need to transform into more data-driven companies and take advantage of those insights,” he said. “We’d like to be the leading enabler of that transformation.”
The firm’s enterprise software gives energy producers more insight into their operations across platforms and monitors everything from production allocation and well down-time to rig scheduling and payout management. But almost more importantly, Kamdar said, is the products’ ability to deliver this management capability on one seamless interface available on a range of devices, including mobile ones.
“Like many industries, in the oil industry a lot of departments operate in silos,” Kamdar said. “They’re not necessarily collaborative in nature.”
The software also helps push the industry toward adoption of cloud technology, a service Kamdar said most oil and gas companies have yet to take advantage of, “which increases their IT costs by a lot.”
Software pricing varies depending on the type of customer. Although the last few tumultuous months for oil on the commodities market have left producers with less to spend, Kamdar said Seven Lakes feels “extremely strongly positioned as a disruptive competitor in the oil and gas space. We just want to get as many clients as we can so that when the market picks back up, we’re primed and ready and one the strongest competitors out there.”
Kamdar said the firm hasn’t yet allocated the entirety of its windfall, but it will initially concentrate on expanding its marketing team and building its customer support infrastructure.
As part of the Carrick deal, two of the fund’s executives, Jim Madden and Steve Unterberger, were added to Seven Lakes’ board of directors. Kamdar said Seven Lakes chose to partner with Carrick because of the firm’s extensive experience with similar startups and in the oil and gas industry.
“They also seemed most willing to mentor and work with us and understand the value that we bring to the industry,” Kamdar said. “They have the expertise of how to make a service company and make it a true products company, making something that’s modular and standard enough to work anywhere but can be customized for specific customers’ needs.”
Madden and Unterberger will occupy somewhat of a mentorship role, he said, and will be able to help the company “pivot around where the prices are” for oil barrels.
“We identified a significant opportunity for software and services companies serving the North American energy market to improve production and operating costs,” Madden, who is Carrick’s co-founder and managing director, said in a statement. “After examining numerous companies we confirmed the superiority of Seven Lakes’ approach and how well suited they are to a partnership with Carrick.”
Seven Lakes now has 60 employees across three offices: 40 at its Westlake Village headquarters, a development team in India and a sales team run out of industry-saturated Houston. Kamdar said the firm had considered opening an office in San Francisco, “but we’ve so far been able to succeed and get the talent we need by staying in Westlake.”
Correction: A previous version of this article stated that Seven Lakes had considered relocating to San Francisco. The company had only considered establishing a second location.