Houston oil and gas software exec eyes M&A activity following private equity deal
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Travis Parigi has built his software within his own company for about 14 years. Now, he's in a position to further develop his product at a faster rate.
In January, LiquidFrameworks entered into a partnership with private equity firm, Luminate Capital. The new financial partner has opened doors for Parigi and LiquidFrameworks — including putting merger and acquisition activity on the table.
"I have historically written stuff from the ground up, and we're going to continue to do that, but we want to give our customers more than that," Parigi tells InnovationMap. "And I've never had the opportunity to go out and strategically target opportunities where it makes sense to compliment the product. And I think that's going to be a very exciting thing to do."
Parigi, founder and CEO, tells InnovationMap about how his company has transformed over the years — and especially over the past several months with its new financial backer.
InnovationMap: How did you get your start in software development?
Travis Parigi: I've been building software since I was a very young kid, actually. I started writing software for companies at a very early age and realized that I really, really enjoyed it. And so when I say young, I'm talking in grade school and high school. And I really found that it was rewarding and I enjoyed meeting the requirements that people gave me. From the very early days, I knew I wanted to start a software company, but I really wasn't sure exactly what it would do. I went to work in the consulting industry right after graduating from A&M University with a degree in computer science and engineering and was building software for variety of different companies that were their clients and started to get some exposure to the energy industry.
Then in the late 1990s, the company I was at was going through some financial struggles, and it became an opportune time for me to start my own consulting company building software for companies. One client I had was Schlumberger, and I really started seeing this similar business problem related to collecting data at the well site. The workers in the field were working with paper and Excel. I thought it was a great opportunity to move people out of manual and into the digital world.
IM: Now, over a decade later, what role do you feel LiquidFrameworks plays in the industry?
TP: We play a role of standardizing the datasets that our clients are working with as it relates to the quote to cash process. So, specifically around their pricing data and their catalog data. We're standardizing that data and we're getting it into form and a shape that allows them to easily keep it up to date and easily syndicated changes related to that data out to not only other offices and districts, but also field crew that may be occasionally connected to the network.
With that data, we can do all sorts of things that end up benefiting the customer — like using it to create field tickets, invoices, work orders, safety forms, quotes, and all sorts of transactions that really need to be based upon one homogenous set of data that standardize, that isn't floating around in various documents.
IM: Where does the artificial intelligence LiquidFrameworks has developed come into play?
TP: We're taking it one step further, and once they finished those transactions, they end up with not just the reference data as it relates to pricing, but also the transactional data, we can use that data to infer the best way to quote or price new services in the future that will position the company and the best possible place to win the deals that they're quoting and bidding against. We're using different types of artificial intelligence algorithms to do that.
Nowadays, companies like us have at our disposal tools in the AI world — specifically in the machine learning world — that we just didn't have when I started the company. Fourteen years ago when I started the business, cloud computing in 2005 was not nearly as ubiquitous as it is today. And it wasn't as widely accepted and it certainly wasn't as widely accepted as it is in the energy industry today.
IM: What kind of clients are you working with?
TP: We're targeting three different industries. The upstream oil and gas service provider market, the downstream service provider market, and the emergency response service provider market. On the upstream side, they are companies doing work at the well site, and in downstream, they are companies doing work at the refineries.
IM: As automation and cloud technology is being more adapted within oil and gas, what technologies are now on your radar?
TP: In the beginning, we spent a lot of time educating our potential customers about cloud computing and about technologies that we had available. And now that a lot of that is so well received, it just means that we don't necessarily have to focus on that anymore. We can focus really on what really brings ROI to the customers that implement our product.
I keep a keen watch on a lot of the different technologies that are emerging out there. Blockchain is certainly one of them that we're looking at. I think there's some interesting things that we might be able to do with that as it relates to price book management, which is complex and varied. It could be that blockchain could end up providing a nice mechanism for both parties to independently have pricing data verified.
We're always keeping an eye on and doing work in artificial intelligence, specifically around machine learning. I think there's always new interesting stuff taking place there outside. I would say those two technologies are something that we're pretty pretty keen on.
IM: How has the transition into private equity been with your new partner in Silicon Valley-based Luminate Capital?
TP: We had a financial partner prior to Luminate Capital called Houston Ventures. Our managing partner there was a guy named Chip Davis. He was fantastic, and he helped us grow the business for about seven years. Eventually, we got to a point where we had grown to a level where I felt like, in order to do some things we wanted to do, we needed to establish a new financial partner. Private equity made the most sense for us, and it's really allowing us to do some things that we couldn't do with venture.
Over the years, we built out a fairly extensive roadmap, and my development team has worked very hard and diligently to fulfill those items on the roadmap. But our customer base has really grown significantly, and we've moved up into enterprise customers who have asked for a lot of things that we want to put into our product. And so our long range roadmap has grown. For these new features, we either need to build that ourselves in house, but, in some cases, there are some things that are tangential and complimentary to our product that other companies have already. So, it could make sense for us to go out and acquire those kinds of companies. And with Luminate, they provided us not only capital for us to do that, but equally as important, they provided an engine that we can facilitate from an M&A perspective to help us go and source those deals, find them, help assess them, and ultimately help acquire them and then integrate them into the overall platform.
IM: How has the partnership benefitted your company from a networking and opportunities perspective?
TP: Their portfolio of companies are similar to us and that they're are all enterprise software companies. They're not necessarily in the energy space, but they're all enterprise software companies. Being able to network with those companies has really been helpful. We didn't have a CFO prior to Luminate coming in. Part of the deal was that they said, "hey, we really would encourage and recommend that you get a CFO at this stage because you're growing and you need it." They provided some relationships there to in the form of recruiters to help us source the CFO. And we ended up sourcing a local CFO — Paul Marvin — who's absolutely fantastic.
IM: How has Houston been as a home base for you?
TP: Houston has been fantastic for LiquidFrameworks. I started the business based here and see no reason to change that. It is a fantastic market for us, both from a customer perspective as well as an employee perspective. The employee talent base in Houston is rich and deep. There's a lot of technical people here, and obviously there's a ton of energy companies.
IM: With all your operations being in Houston, do you see opportunities for other offices in the future?
TP: We have customers all over the world — a lot in Canada, so I could see an office there for sales and implementation. I would say that as we grow, expanding sales to other geographies is certainly something that will ultimately end up doing. It's just not something we've had to do yet.
IM: Are you planning on growing operations here?
TP: We've added a couple dozen people to the team just over the past few months, and we plan on doubling the staff by the end of next year.
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Portions of this interview have been edited.