Face-to-Face with our Portfolio: gridX
As the energy market becomes increasingly decentralised, digitised and democratised, the relationship between energy company, grid operator and the end user is evolving, demanding new business models and a more customer-centric focus. We sat down with David Balensiefen and Andreas Booke, founders of our portfolio company gridX, and innogy Ventures’ Venture Capital Investment Partners Veronique Hördemann and Thomas Labryga to learn more about their latest projects, their collaborative partnership, and how AI and data will impact our future energy systems.
Can you start by talking a bit about what your company does and what it is you are focusing on in particular at the moment?
David Balensiefen: Three major trends are reshaping the energy supply system: decentralisation, digitisation, and new customer needs such as transparency, co-determination, and new business models. gridX offers companies holistic, white-label energy management and monitoring solutions to successfully master these challenges. From our point of view, e-mobility is currently the biggest driver in the field of energy transition and therefore we are currently focusing on our Smart Charging solution, helping our customer base of OEMs, utilities and energy suppliers to set up and operate a charging infrastructure that is as cost-efficient, simple and sustainable as possible. In this way they can significantly reduce their capex and optimise their running costs. Companies such as innogy, e.on, Viessmann & Axel Springer are already using our solutions.
What are the key challenges you foresee for utilities going into a digitised and decentralised energy system? What role do you see data usage and AI playing in this future and what impact will it have for the grid business?
Veronique Hördemann: One clear example of both decentralisation and digitisation is in connected homes and vehicles. For that, often energy generating devices such as solar panels are used, putting utilities in a position where their customer is both a customer and a producer of energy. The related impact on energy grids raises the question how to effectively meet and manage these new and additional requirements. gridX’s solution is valuable to innogy as it helps us to get a real grip on this emerging “problem”.
The adoption of technologies like gridX is essential, but achieving that relies on gathering data which, in turn, is reliant on establishing trust between consumers and utilities. To facilitate this, a clear benefit needs to be demonstrated to the customer, so a key focus for innogy is working together with companies like gridX to find appropriate and customer-centered solutions. The grid business has long seen itself as a centrally-controlled and operated market; this needs to change. While grid operators will still have an important and value-creating role at the distribution level, they need to accommodate an energy market that is becoming more dynamic, integrated and distributed.
Does gridX have the potential to transform the energy industry?
Andreas Booke: Absolutely, otherwise we would not have founded gridX in the first place! From a technical point of view, the biggest challenge is to make all the physical assets usable at all. We can, for example, digitise the charging points of different manufacturers and bring them together so that they can talk to each other. From the customer’s point of view, the biggest challenge is to unravel the complexity in such a way that he does not notice anything and at the same time gets real added value. We are proud that we have found a solution for this.
Why did innogy Ventures invest in gridX? What opportunity did you see in the company and how does it fit with your strategy?
Veronique Hördemann: When we first met gridX and saw their proprietary technology, we knew that they had developed a solution for the challenges the energy industry is facing and one of the building blocks to manage the energy transition. Furthermore, we were really convinced of the management team – particularly their approach and drive to really have an impact in that transition.
Thomas Labryga: Although the company had just started when we first met them, the gridX team had already achieved a remarkable level of technological development with very few resources. At the time of investment, we already had a pretty good overview about the energy IoT market and saw huge potential in what this team could accomplish with enough resources and the right partners. The gridX product and technological roadmap coupled with the team’s style and attitude were perfectly suited to provide holistic, state-of-the-art white label solutions for energy players like innogy. Also, from an investment standpoint, we were very confident that we would be the right partner to strongly support the company on its way to become a relevant player in the new energy world – which has proven as correct.
Why did you choose innogy Ventures as an investor?
David Balensiefen: When selecting investors, it is always important for us that they fully believe in the market and the company. At innogy Ventures we have found exactly that. In addition, we did not only want to have pure financial VCs but also an investor that can open doors to a large customer and therefore a sales channel if required.
Can you tell us about your approach to giving growth support to gridX?
Thomas Labryga: Our main approach has been to connect gridX to the right departments at innogy in order to accelerate its growth. In some cases, the organisations already had touchpoints with competitors of gridX or were intending to build comparable solutions in-house. So, the challenge was to transport our insights and high opinion about the gridX capabilities to the larger cooperation. We managed it by constant marketing and networking for gridX, but the big breakthrough came in an engineering workshop when the participants fully bought into gridX capabilities. They have been “ambassadors” for gridX solutions in our organisation ever since. gridX fully seized the opportunity and have successfully launched several projects and co-developments with innogy. In addition, we also leverage our external networks in the VC ecosystem and energy industry to position gridX as a leading energy IoT player to increase their reach.
What makes innogy Ventures different to other investors (VCs or other corporates)?
Andreas Booke: innogy Ventures has an extremely good overview of the European and global electricity market due to its history and understands very well how this market – and the start-ups in it – work. Even though innogy Ventures is a CVC, it does not interfere in the strategic running of the business. They are true to the motto: everything can be nothing must.
You have already built strong global partnerships and have acquired some big names in the energy industry as your customers and successfully completed a significant funding round in 2018. When do you expect exponential growth for your business?
David Balensiefen: We have been able to grow rapidly in the past months and years. Our business model is of course also dependent on the penetration of electric cars, PV solar systems, storage facilities and all other renewable assets. With the climate targets of governments and companies, we will soon experience this growth.
Can you provide some concrete examples of how innogy Ventures has provided growth support/cooperation?
Andreas Booke: innogy Ventures has been a great accelerator for our growth, particularly in introducing us to the relevant people and departments within the innogy group. Of course, we also had to convince with our product, but the direct introductions helped shorten the sales process.