Published on September 12th, 2018 |
by The Beam
September 12th, 2018 by The Beam
By Erika Clugston
Energy conservation is a crucial element of environmental responsibility. And for households or businesses, saving energy is not only good for the planet but good for the wallet.
Energy management company GreenPocket is a German company that is ahead of the curve. With a lack of digitalization in Europe and smart meter rollout barely underway in Germany, GreenPocket is leading the charge with an international client base and big plans to enter the American market. The company uses IoT software and smart metering to provide critical insights to end users on their consumption patterns. Recently the company secured €3.1 million in funding from investors KfW, Intelligent Venture Capital, and Betafabrik, allowing them to further develop their AI and data science technologies and play with ideas for the future.
We speak with company CEO Dr. Thomas Goette to learn more about the future of smart metering, how they’ve found investment as a startup, and GreenPocket’s next steps.
Tell us a little bit about GreenPocket. What drives you to create smart energy solutions?
GreenPocket assists its customers in capitalizing on smart meter data by maximizing their customer relationships. We serve utilities and business customers with a highly intuitive IoT software solution to unleash the value of smart meter data by offering modular white label standard software as SaaS. The software visualizes, evaluates and interprets smart meter data based on intelligent algorithms. The software also provides useful functions for utilities to improve their services, the customer dialogue and the customer engagement. End users get valuable insights into their energy consumption that can help them so to improve their energy efficiency to save costs. This way, they also get a chance to contribute to a more sustainable future by reducing their CO2 emissions.
Our aim is to provide customers all over the world with our solutions. Therefore, we’re currently not only expanding into various European countries such as Spain and the Netherlands, but also into countries outside of Europe, such as Japan. Naturally, the American market is a very important part of our vision as well.
Why are you personally passionate about visualizing energy consumption?
There are at least two reasons that motivate me personally. The first one is, quite obviously, the climate change as a global problem. It proves a great challenge as well as a responsibility for all of us. Our energy management tools can make a small contribution to a better awareness of this problem, and it also gives a first approach to come at it: Based on the consumption data, we can give specific recommendations for the optimization of the energy efficiency of private households and enterprises. Our hope is that this might reduce the overall C02 emissions in the long run.
Besides that, we are proud to be a service provider for utilities that has earned the trust of four of the five biggest utilities in Germany. We also have internationally active partners like Bosch. The cooperation with customers and partners of this caliber is very motivating and inspiring for us.
How do you see this technology changing energy metering and consumption in both the commercial and private sectors?
In our view, data transparency is just the first step. The following step is data intelligence. There is still a lot of potential in the data pool, and we will be able to unlock this potential by adding highly improved functions like artificial intelligence and machine learning applications to the basic technology. Through features like anomaly detection and pattern recognition, end users will be able to spot reasons for energy wasting even faster and more accurate. Private customers will also be able to evaluate their own consumption in relation to external conditions such as weather changes, as well as in comparison to similar equipped households. This can be a motivator to optimize the own energy efficiency and therefore to take measures for improving the infrastructure within households and companies.
To what extent is your energy software already implemented in homes and companies?
Currently, we’re processing data of over 30 customers, most of them being utilities. At large, we’re mainly working in pilot projects, since the smart meter rollout has yet to start in Germany. Overall, we’re receiving data from around 50,000 meters – that’s ten times more than three and a half years ago. We expect this number to increase at least by the factor ten within the next three years. This rapid growth is to be expected because of the upcoming infrastructural improvements on the one hand, and the growing trust that companies put into us and our solutions on the other hand.
There is a strong demand for sensor data, since they are becoming an elemental source of information for a better understanding of business and production processes. Energy and energy data matter in all of these processes.
What have been the biggest obstacles so far?
The biggest obstacle is, without question, the delay of the smart meter rollout in Europe, and especially in Germany. Unlike many states of the USA, we are still in the initial stage of the digitalization in Europe. As long as we’re missing the necessary infrastructure in Europe, we will not yet be able to unfold our full potential as a smart metering specialist. Because of this, we are only able to provide our services to relatively few companies until the start of the rollout. Naturally, that’s a hurdle to overcome. Then again, it is a great opportunity: The rollout will inevitably be realized within the next years. And GreenPocket will be perfectly ready for any chance that can be taken at that time.
What did you personally learn on funding a startup – specifically a clean-tech company – and what investors (private, VCs, corporate VCs) does a company need at which stage?
The first challenge is to identify the right people to talk to. This is the foundation of an information network which is essential for the whole process of funding and expanding a startup.
The next step is to prepare an appropriate pitch document. It has to tell the story of the startup in a condensed and comprehensible way – in no more than 10 to 20 slides. The most important points to mention in the document are the uniqueness of our business model as well as the market and the growth potentials. The market potential is usually relatively easy to show, while the business model is a little more complicated. The main questions are: What differentiates us from other companies? Is our business model unique and stable enough to hold our ground on the market?
This differentiation can be realized in several ways. In our case, as a clean tech company with a SaaS model, we have the possibility to differentiate ourselves through innovative technology, a broad and stable customer base and easy customer access.
GreenPocket’s position in the energy market is in fact a bit challenging, since we work in a small software sub-segment of the very broad cleantech segment. It’s quite difficult to prove the uniqueness of our business model in this segment. Our main task is to show that it’s attractive to invest in nevertheless. Therefore, we need to show how much traction and potential our business model has.
If I had the chance to start over again, I might choose a slightly different way, even though it worked out well the way we did it. In the seed phase, I’d possibly focus more on raising private investments through business angles. This way, we’d have a little more time to work calmly on our product and our business philosophy. In the second phase, when the proof of concept is given, I’d rely on venture capital investments to accelerate the company’s growth. In our current phase, it was the right step to rely on a strategic investor to improve the sales activities.
What sort of investment is GreenPocket trying to raise in the next 12 months?
We have recently closed our current round of financing. We found a strategic investor and have raised €3.1 million for our company. This money will be used for the further development of our energy management software. For example, we’re currently recruiting numerous talented developers to work on our AI and data science technologies.
Where are your biggest opportunities for growth and what sort of time line are you looking at for the future of GreenPocket?
Our plan is to raise the international sales from 25% to about 50%. The US market plays an important part in that plan, since it is highly fragmented, just as the German market. There are about 1000 utilities in Germany, and approximately 2000 utilities in the USA. For comparison: In Great Britain, there are only six larger utilities, and only four in Spain.
The utilities in the USA usually don’t have their own energy management software, but they are relying on solutions such as GreenPocket’s. Besides that, the US-market is much further developed than the European market, having more than 80 million active smart meters in the field. Nevertheless, there are still 70 million electric meters that yet have to be digitalized within the next 10 years.
We believe that we have a realistic chance to hold our ground in this market even against the established competitors, because we have already gained a huge amount of project and process experience. At this point, we have successfully finalized twice as many projects as very big competitors such as Bidgely or FirstFuel. This is an important reason even for big utilities to put their trust in us. We work, for example, for the fourth biggest utility in Japan. Endesa in Spain and E.ON Eneco in the Netherlands are also our customers. Because of this success and because of our broad knowledge of the branch, we are confident that we will be able make a big step forward by entering the American market.
What needs to happen nationally and globally in climate action?
It will be tough to change anything without the biggest countries with the highest energy consumption setting a good example. Especially America and China have to become aware of the situation and react to it as pioneers and role models. As soon as the big countries adjust their legal framework to the climate situation, others will follow their lead.
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