New unicorn in Texas as energy marketplace startup RigUp raises $300M
Austin, Texas, has a new unicorn in the form of RigUp Inc., a startup that offers a marketplace for contractors in the energy sector.
Today it said it has raised $300 million in new funding on a $1.9 billion valuation. The new funding will be used to continue the company’s expansion into renewable energy, midstream oil and gas, and downstream operations.
The Series D round was led by Andreessen Horowitz and included Baillie Gifford and Brookfield Growth Partners as well as previous investors Founders Fund, Bedrock Capital and Quantum Energy Partners. As part of the deal, David George, general partner at Andreessen Horowitz, is joining RigUp’s board.
Founded in 2014, RigUp has developed a platform that primarily serves as a marketplace for services and skilled labor in the energy industry. Though it may sound like a glorified job ads provider, RigUp provides much more, matching contractors with jobs that fit their skills while connecting service providers and operators with qualified workers.
In addition, RigUp provides paperwork support for contractors and supervisors, assists with risk management, links them with healthcare providers and maintains vendor contact information taking it more into the realms of human resources software and financial management than simply an employee finder. The company pitches itself has having lower fees with faster pay, offering flexible terms while cutting out the middleman.
The market in energy provision continues to grow, particularly in the U.S. given the boom in shale oil production. Along with growing demands for skilled employees, the market also faces shortages, with 50% of skilled workers expected to retire in the next five years.
“With an impending industry labor shortage and a generational workforce shift underway, we believe it’s time for better software for the energy labor market,” Andreessen Horowitz’s George said in a statement.
“Before RigUp, contractors also relied heavily on fragmented, offline agencies to help them find new roles, but these agencies have thrived on obfuscation, high fees, and a lack of visibility into the full opportunity set available for workers,” George explained. “RigUp stands alone in serving the energy labor market with much-needed technology and has oriented their marketplace to provide increasing returns to both sides.”
RigUp currently has more than 300 employees across the U.S. and expected to exceed $2 billion in gross service volume in 2019, up 200% from 2018. Clients include Anadarko Petroleum Corp., Xto Energy Inc., EOG Resources Inc., Gulfport Energy Corp., Noble Energy Inc. and BP plc.
Including the new funding, RigUp has raised $423.8 million to date.
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