Modified Energy bets on a more integrated approach to accelerate the decarbonization of the built environment. Founded in Munich, Germany in May 2024, the startup is led by a team with expertise in scaling the energy business, including the German octopus energy and energy price comparison platform Verivox. It focuses on selling energy system upgrades to commercial real estate and targeting property owners with a portfolio of buildings.
Carbon emissions from heating buildings have contributed greatly to climate change. Therefore, accelerating the transition to low-carbon forms of heat management, such as heat pumps and solar panels, is an important part of achieving climate goals. Therefore, in Europe, considerable regulatory pressure is applied to building owners to implement energy upgrades.
At the same time, even understanding what you need to do to unleash these energy upgrade projects, or understanding what you need to do to optimize a particular building can slow the momentum to install low-carbon solutions.
Resharp energy hopes that the one-stop shop model will help to diverge some of the friction from the system. It starts with the German market, but when expanding its approach, it looks to expand elsewhere in Europe.
Engagement of energy upgrade inertia
“Why not enough” was an important question that the founders kicked as they were thinking about how to construct a business targeted at commercial buildings with energy upgrades.
“We’ve seen a lot of momentum [energy upgrades for] A single family home… But when you look at the commercial real estate, our focus, it’s very slow,” he says. “maximum [competitive] The threat is definitely the “do nothing” option. ”
He suggests that the sector was extremely slow intake is complicated. For example, it is not one missing piece that new technology can fix. Rather, it is the systematic complexity that orchestrates all the different bits needed to successfully deliver such a project that is keeping the pace of change.
“The complexity of running these projects is incredibly high,” he argues. “Commercial property owners don’t have the expertise, and some of them don’t even want to deal with it because it’s not their core business.”
Stanzle also points out that construction is a sector that relies heavily on trust, so low levels of trust can also slow down progress.
Startups are taking on this energy upgrade inertia through this energy upgrade model. This allows you to buy existing companies and bring key features and customer relationships within the company.
The idea is to cover every stage of the project. From initial assessments and determining what you need, to installing a new system, to ongoing service and maintenance. It also includes fundraising when customers want to broaden the frontline costs of installing new energy systems.
By covering the full chain of what is needed for energy upgrades, startups believe it can unleash the efficiency of scale while also leaning (and leveraging) towards trustworthy customer relationships. Each stuntlle is breaking out of the siloed workflow that characterizes sectors more generally.
He says the startup has covered more fragmented energy upgrade project work so far. But the idea is to continue to expand and build business, what we can offer to undertake projects with many moving parts and much higher complexity (e.g., installing district heating).
Funding Injection
Reshape has already made several acquisitions to build its services. There are more cards – and the company will use some of the new financing rounds of 5 million euros for this purpose.
Buying small and often local businesses shortens customer acquisition and plugs into relationships and contacts, which these other businesses have gathered over the years. The acquisition model also gives you complete control over where and how skills are deployed, says Stanzl.
“Through the life of these businesses, they served hundreds, if not thousands, of people. [of customers],” he says of the business Reshape brought into the house. So far, it has covered energy consulting businesses and commercial solar planning, installation and maintenance companies.
“The control part is important because all these companies need to work together, and they need to use a common system and a common technology,” he adds, sketching strategies that unlock efficiency in project delivery by pooling trust and risk.
The founder puts money in a place where his mouth is and donates a portion of his funds to a salary increase of 5 million euros. Stanzle says he’s not sure the typical venture funding model is for them, but other approaches, such as private equity, could have a better fit, he says.
Other investors in the round include Postscriptum Ventures, Vireo Ventures, and some unnamed industry players.
Various models
Germany has seen a boom in energy upgrade startups in recent years following the 2022 Russian invasion of Ukraine and the resulting surge in gas prices. But the first wave of energy upgrade activities (many of which focused on single family homes) followed that shock, “definitely settled down,” Stanzle says.
Players in space have the incentive to get out of the lane and take more approaches to deliver the next wave of upgrades, he says. Second, you can tackle more complex challenges, such as upgrading commercial real estate.
“If you don’t know what the electrical infrastructure of a building is, you can’t deploy a heat pump, right? And if you do that, suddenly, you may realize that your customers promise a lot of savings, then they come back and they need to upgrade their transformers and more. Then all your savings are out the window,” he suggests.
“So I think a lot of people realize that if they’re just focused on their little silos, that’s not enough anymore.”
Reshape’s model, which provides energy optimization services to building owners, appears to be more capital efficient than other approaches. For example, it involves purchasing real estate to buy real estate through modernisation of energy infrastructure.
German startup Reneo, for example, recently shut down a €600 million funding round to build another decarbonised play, including buying target properties for improvement. However, on the contrary, Reneo’s ownership model means that you can benefit from increased property values, while Reshape remains purely a service provider, but it means that the capital requirements for spinning up your business are much lower.
Stanzle says that when they are developing a business that they consider taking on property ownership, it would mean they also need property and tenant management services, but they decided that it is not the core of the energy transition mission. He also points out that commercial property owners may not want to sell the building.
Another factor often associated with energy transitions is to upgrade the insulation of a building, as better insulation can benefit the performance of the energy system. Asked about this, Stanzle says that while they can provide it, they won’t “never go and find it” because it could add to the complexity of the project.
They also made a firm decision to be involved in improving cosmetics in the building.
“We’re focused on energy, right? We want to look at energy infrastructure and energy fabric,” he emphasizes. “So the problem [for target customers] More…How can you use waste heat? How do you optimize it along with cooling load?
This report has been updated with revised positions for Benjamin Stanzle
Source link
