Frontrow Energy Technology Group, an Aberdeen-based outfit aimed at developing new technologies in the oil and gas sector, is poised to help more fledgling firms get off the ground after securing a £13 million investment.
Along with £10m from the banking industry-backed Business Growth Fund (BGF), which is taking a minority stake in the business, Frontrow will receive a £3m cash injection from its founders.
Our vision is to build a group of world-leading technology businesses in the North-east of ScotlandGraeme Coutts
Since it was formed in 2013, Frontrow has created an incubator “hub” in Dyce, to the west of the Granite City, were it has assembled a group of energy service companies – including subsea technology business Interventek, downhole data technology firm Well-Sense and offshore wellhead servicing specialist Well-Centric – giving them access to shared resources.
The group, set up by chairman Graeme Coutts – the former Expro Group chief executive who also chairs BGF portfolio firms Spex Group and Stats – said it would use BGF’s funding to expand its resources and infrastructure, “allowing it to develop even more promising young technology companies in the region’s energy industry”.
Coutts said: “Our vision is to build a group of world-leading technology businesses based here in the North-east of Scotland, which has long been a centre for the development of downhole and subsea technologies.”
Mike Sibson, an investor in BGF’s Aberdeen office who will join the board of Frontrow, added: “The past two years have been incredibly challenging for companies operating in the North-east of Scotland’s oil and gas industry, and many entrepreneurs have understandably been shaken by the downturn.
“Despite these strong headwinds in the energy industry, and across the whole of UK, 2016 was a record year for BGF, and we will continue partnering, supporting and investing as part of our strategy to provide truly long-term capital to companies scaling up.”
Sibson added: “This deal allows us not only to invest in the growth and development of Frontrow, but it also extends our reach into younger, earlier stage companies in oil and gas, and the broader energy industry. We are backing a team with a deep understanding of energy technology, a strong industry network and the operational experience to bring new products to market.”
Frontrow is led by chief executive Stuart Ferguson, the former chief technology officer of oil and gas services group Weatherford. Its senior team also includes non-executive director Colin Smith, who sold his Petrowell business to Weatherford in 2012, and executive director Frank Summers, who ran a fund at energy-focused investment banker Simmons & Company.
BGF, backed by banking groups Barclays, HSBC, Lloyds, Royal Bank of Scotland and Standard Chartered, also counts the likes of optician chain Duncan & Todd and food waste recycling firm Keenan among its portfolio companies.