After the peak in Cleantech VC funding some years ago, are there new trends in cleachtech fundraising today?
Jan Michael Hess: Since last year, I see more and more utilities interested in investing into cleantech startups. There is a rising demand for open innovation from energy providers not only in Germany but all over Europe. It is a big trend that utilities are looking for external innovations outside of their companies, and are opening to new solutions that can be supplied by startups. Some startups are selling their products to the utility, others via the utility to its customers.
Can you name any examples of such cooperation?
Jan Michael Hess: One of the partners of Ecosummit, a German utility RWE, has recently started an innovation hub: an organizational structure, where they concentrate their open innovation activities. RWE used to be active in venture capital (VC), and I know that they are planning to become active again. Another partner, a German energy provider E.ON started strategic co-investments in startup companies. One of the companies E.ON is investing in is Thermondo a Berlin-based startup that sells heating systems online.
How would you assess VC appetite for cleantech investments? In what fields do VCs demonstrate the most interest?
Jan Michael Hess: I wouldnt say that VCs lose interest in cleantech. But, as always, the key idea for them is to invest not in a particular field, but in capital efficient business. A big trend that I see in VC investment now, is that many VCs prefer to support late stage startups. A lot of young companies are trying to enter the market, but not so many of them are successful and fast growing. And these are the startups investors are mostly interested in.
What about solar startups? Any chances for them in terms of early stage investment?
Jan Michael Hess: At the moment, it is very difficult for a startup to offer new technology in the PV sector. The competition with the big players is very tough. And I would say that VCs are not motivated to invest in PV manufacturing. I believe there are still people in the market who have new ideas. But the amount of solar startups offering new PV technology is quite small. Its very difficult for them to raise venture capital on their own. And I dont think they should try to reinvent a solar cell. Instead, they should use the concept of open innovation, talk to the big companies and see if there is an opportunity for cooperation.
Do you know any startups that have already used this opportunity?
Jan Michael Hess: I dont have many examples of such cooperation yet. There is a Sweden-based startup Sol Voltaics, probably the most high-tech company at the upcoming Ecosummit, which is using nanomaterials to increase efficiency of PV cells. I dont think they are planning to bring their technology to the market on their own. Instead, they are aiming to find a big existing solar company to work together.
Another possible business model will be presented at the summit by a late stage startup Greeneergetic – an online shop for PV systems and other green energy solutions. Another example is an early stage company Lumenaza, which is working with utilities, offering them software for green energy distribution. Two more early stage startups, SunOyster and Solarus Sunpower, will be both presenting their thermo-PV technology at the summit.
With the battery storage fast emerging as a market in the PV sector, how successful are the energy storage startups in terms of early stage funding?
Jan Michael Hess: I would say there is a huge potential for startups in the storage sector. Berlin-based Younicos, an intelligent storage and grid solutions provider, is a good example. They are a late stage startup now, but they already have a number of big investors, including First Solar and Panasonic. Another German smart energy storage developer Qinous, a relatively young and successful company, will be also participating in the forthcoming Ecosummit.
Summing up the five years of the Ecosummit history, what are the most successful startup stories that emerged from the event?
Jan Michael Hess: Hard to say. We provide startups with a platform, where they can pitch their ideas and look for investors and partners. But afterwards, we dont always have an opportunity to track their activities and see if they are successful in this partnership. I know a couple a stories, when startups found investors at our event. For example, Sonnen, one of the most successful startups in Europe, which is developing batteries for residential and small commercial customers, came to Ecosummit 2012 in Düsseldorf. It was when they did their first pitch, even before they closed their first funding round. Afterwards, they have been very successful in VC fundraising. Last year, Inven Capital, a VC of a Czech utility CEZ, also invested into Sonnen. And I know that they first discovered the company at Ecosummit 2014.
I know there are more stories like this one, even if we cant track all of them. This is the reason why Ecosummit has grown fast over the last years. 55 startups are presenting at the upcoming event. 52 early stage and nine late stage companies are nominated for the Ecosummit 2016 award. And there is still room for more innovative ideas.
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