Houston-based Blockchain-as-a-Service (BaaS) company Data Gumbo has announced it has raised $6 million in Series A funding co-led by the venture arms of two international energy companies including Saudi Aramco Energy Ventures (venture subsidiary of Saudi Aramco) and Equinor Technology Ventures (venture subsidiary of Equinor). Data Gumbo is in the process of creating a massively interconnected blockchain network for industrial companies including oil and gas.
“We enabled the first application of blockchain technology in the offshore drilling industry and will continue to break new ground with applications of BaaS to improve the bottom line of companies of all sizes. Blockchain will have a major impact on the oil and gas industry – and all global industries – and we will lead the charge in its broad adoption for sweeping operational improvements,” said Data Gumbo founder and CEO Andrew Bruce in a statement. “The partnership with Equinor and Saudi Aramco, and their associated supply chains and partnerships will provide the momentum for the Data Gumbo BaaS network to gain critical mass.”
Data Gumbo will be tapping into the oil and gas market first and then it will expand into a number of other global industrial markets for streamlining the supply chain.
“While we started in energy, we already have value for bulk commodity haulage, trucking and shipping, with plans to parlay our momentum into other global industries. Wherever two or more organizations share a contractual relationship that can be verified with a digital source of data, opportunities abound to realize efficiencies and cost savings utilizing our blockchain network,” Bruce added.
Bruce is a former executive at National Oilwell Varco and MHWirth and is a serial entrepreneur with 20 years of experience in the software and energy industries. Bruce had built Data Gumbo after identifying a multi-million dollar cost-saving opportunity for eliminating a major inefficiency between an oil supermajor and one of its suppliers. Using a blockchain solution, Bruce built a BaaS distributed ledger network for automating contract execution.
With this round of funding, Data Gumbo is going to expand the company’s commercial blockchain network in addition to the growing technical, sales, and marketing teams at their headquarters in Houston and office Stavanger, Norway. Including this round of funding, Data Gumbo has raised a total of $9.3 million.
This solution helps solve a major problem in the oil and gas industry. Transactions that result from measures are interpreted differently by companies, service providers, and suppliers. These measurements usually involve weight, speed, height, connection, delivery time, volume, quality controls, and any other number of related contract terms.
“Distributed ledger technologies have the potential to bring win-win efficiencies between industrial companies and their suppliers, and Data Gumbo is at the forefront of introducing this innovation,” added SAEV senior investment director Daniel Carter. “While they have started in the energy sector, Data Gumbo’s platform has broad industrial applicability.”
Every company in the supply chain has different interpretations of the data and when it comes to payments, filing and audits cause significant delays and disputes. As a result, supply chain parties currently lose hundreds of millions of dollars in extra expenses and delays every year due to delays and disputes.
Using Data Gumbo, companies are able to eliminate the differences in interpretation with the power of its BaaS network and smart contract technology, facilitating automated calculation, reconciliation, and payment of invoice line items in near real-time with total transparency — which drives reconciliation time between supply chain counterparts down to zero.
Once the disputes are resolved and automated payments are enabled, the BaaS network records the result in an immutable record shared among all parties to the transaction. These benefits include significant cost savings, better reporting, bills paid on time, and clarity and certainty over financial positions for all of the supply chain parties.
As a result, customers realize a savings of about 5% to $10% off the top on Data Gumbo-managed contracts from a combination of fewer disputed invoices, fast-pay discounts, and performance contracts. Data Gumbo offers its services in the form of a subscription model — which frees the industry from building and sustaining standalone in-house blockchain solutions.
“Over the past two years, through our internal and external efforts, we have learned a great deal about how blockchain can create efficiencies and save cost in our operations. We believe now is the time to put that knowledge to work by supporting a promising company in this space and to realize value by implementing their technology,” explained Equinor Technology Ventures managing director Rannfrid Skjervold.