Silicon Valley's Hot New Investment: Oil and Gas

02-Oct-2015

Technology investors aren't usually known for backing anything related to fossil fuels—they tend to favor solar energy and other environmentally responsible endeavors.

But Peter Thiel, whose Founders Fund recently led a $7 million investment an oil-related startup called RunTitle Inc., isn't your typical Silicon Valley investor. Thiel, Facebook Inc.'s first backer, is known for making contrarian bets. RunTitle is the latest in a series of oil and gas investments by his fund—even amid a slump that has seen the price of oil decline by more than half since June of last year.

RunTitle, essentially a search engine for mineral rights, compiles data on land ownership that's valuable information for oil drillers. The company's name is a play on the expression "running title," a process of digging through public records to figure out who owns what in oil-producing regions.

"The reality is that fossil fuels will continue to be the dominant source of energy for years to come," said Geoff Lewis, a partner at Founders Fund who led the investment in RunTitle. "There have been very few innovations in production." 

The San Francisco-based venture firm has also financed Tachyus, a company that sells tools to optimize oil production through data analysis; RigUp, a marketplace for oil-field services; and Modumetal, a materials company that sells to the industry. Founders Fund has also backed nuclear technology and clean energy companies.(by Eric Newcomer, Bloomberg)