A new Y Combinator–style incubator that will focus solely on the intersection of energy and information technology is launching in Houston, the founder of the group, Kirk Brand Coburn, told me in an exclusive interview. The accelerator program, called Surge, will begin accepting applications for its program starting in November, says Coburn, and it will select 10 companies in January 2012 that it will fund with $30,000 each for a chance to come to Houston for three months and receive mentorship.
The intersection between energy and IT could mean anything, from projects building smart grid applications to software for energy trading to analytics for the oil industry. Coburn explained to me that the latter could help oil producers seek resources more efficiently, in a safer way, and with a smaller environmental footprint. The overall goal of the startups that Surge brings into its fold will be to “create the efficient energy software technologies of tomorrow.”
Investors and entrepreneurs have eagerly looked to embrace ways that energy, and other resources, can intersect with digital technologies. In addition to the unveiling of Surge this week, the Cleanweb Hackathon kicked off last weekend and enabled 14 teams to create web- and mobile-based applications to make the consumption of energy, water and food more sustainable. The winner of that hackathon was team TACO, which created a browser plug-in that adds in the total cost of energy associated with a gadget or appliance to a retailer’s website like Lowe’s.
Investors and entrepreneurs aren’t just moving toward what they see as an opportunity. They’re actively adjusting away from the capital-intensive business models and long-return timelines of companies in biofuels, clean power and electric cars.
Greentech has had its fair share of bruises lately, from Solyndra’s fall to a drop in venture capital to claims of “disaster” by prominent investors. Some green investors and entrepreneurs are hoping to make the greentech ecosystem look a lot more like the web by literally turning to the web. I like to call it the “searching for the next Opower” syndrome.
Coburn tells me he’s a three-time entrepreneur who cut his teeth first at Dell (s DELL) and then the startup world. For his incubator he has brought in about 50 mentors that will offer business advice to the chosen startups, from venture capital firms like DFJ Mercury, Austin Ventures, Battery Ventures, Siemens Venture Capital, IBM’s (s IBM) VC arm and smart grid leaders like Bert Haskell from the Pecan Street Project.
Coburn says that the traditional energy sectors are entrenched and take a long time to change, and startups need to connect with mentors that have long roots in the energy industry. Coburn doesn’t have an energy background himself, which is why he’s created such an extensive mentor list. The mentors themselves are looking for deal flow, so to speak, or finding the next potential hot investment.
Like with Y Combinator, the investors in Surge will take something in return for their program and mentorship opportunity: about 6 percent equity.
A couple of months ago a group of entrepreneurial investors had a similar idea for a Y Combinator but wanted to focus on greentech (not just energy and IT). That project is called Greenstart, and it is led by Mitch Lowe, Dave Graham and Dillon McDonald.