The energy transition is a marathon, not a sprint. But there are growing opportunities to accelerate. Swedish startup Greenely* has seized that opportunity. The company closed an 8 million euro Series A funding round (about $8.7 million at current exchange rates) to expand its energy management platform to neighboring Nordic countries.
This energy technology startup serves around 200,000 households in the domestic market. The company offers freemium energy consumption analytics combined with energy optimization services that enable paying customers to save electricity consumption. Examples include smarter charging of electric vehicles when energy prices are low, or Greenely reducing the energy demand on the power grid through automatic (aggregated) optimization of customers' energy needs and, as a result, accessing government payments.
Currently, these energy optimization services are only available to customers who pay Greenely for their energy supply, but the company plans to carve out this requirement once new European legislation comes into force in its home market, hopefully by the end of the year.
The startup also offers energy customers the opportunity to install a home battery (currently reselling Pixii Home) to store energy for later use, allowing households to adapt to changes in wholesale electricity prices and optimize when they are on and off the grid, reducing their energy costs.
Greenely's platform is also designed to integrate and manage energy use and demand for homes with solar power plants and heat pumps, so that customers with home batteries and solar panels, for example, can sell excess energy when electricity prices are high and store it (for later use or future sale) when prices are low.
Paying customers will have access to hourly variable electricity rates and what Greenlee calls “residential virtual power plant” (VPP) technology, which allows them to participate in grid balancing, contributing to grid stability and potentially earn revenue through government payments.
“we [our customers] “They're going to save a lot of money,” CEO and co-founder Tanmoy Bari (pictured on a solar-powered roof in the featured image above) said on a conference call with TechCrunch, “by essentially switching over to our platform and using it. And the technology in our virtual power plant is actually going to enable consumers to generate revenue that they never could before.”
“By aggregating this at scale, we are able to enter the frequency market and essentially stabilize the national grid, which the government will then actually compensate us for and we will pass this on to the consumer. So not only are consumers saving a lot of money, but they are also making a lot of money through our platform today.”
According to Bali, the average energy consumption savings is 250 euros per customer per year, but Bali stresses that this is just an average, and that households that charge their EVs could save up to 500 euros per year thanks to the platform's charging optimization features.
For battery storage customers, there is also an opportunity to earn revenue from Greenlee's ability to support governments in helping regulate demand on the power grid. Bali suggests that users could have earned more than €3,000 in regulation payments last year if the company's VPP technology had been fully operational in 2023. However, customers will need to factor in the cost of the battery, although Bali says the investment in a home battery could be paid back in “two to three years”.
Building an energy platform
Greenely wasn't always in this smart consumption race. The company was founded nearly 10 years ago. The original idea was to give energy providers the tools to improve their customer experience. But after a few years, the team saw an opportunity to build, in Bari's words, “the consumer experience for the energy consumer of tomorrow,” and asked Greenely to become the energy supplier.
Currently, the startup's approach has some overlap with the likes of the UK's Octopus Energy and local digital energy startup Tibor, but Greenlee's goal is to become more than just a direct competitor as an energy supplier: It wants to become an “energy platform” layer that rival suppliers' customers can tap into to generate savings and make money on top of providing the service.
Separating its services in this way could allow Greenlee to position itself as a more independent player that can lower energy bills on behalf of customers and help generate revenue. As a power supplier, the higher customers' rates, the more profit Greenlee could make.
The initiative could also accelerate Europe's decarbonization by creating a path for start-ups to scale up and have a major impact on energy management and demand, as well as pioneering ways to incentivize householders to play their part.
“We don't see ourselves as an energy supplier,” Bali emphasizes. “We see ourselves as an energy platform.”
“We're trying to create the best consumer experience for our consumers, and we've come quite far. We believe we have the most advanced product on the market right now, and we're looking to expand that to other markets.”
“It's something I haven't seen anyone else do,” he added of the VPP business. “We've been preparing for this service for quite a long time, because we think that energy supply is currently a great revenue model for us, but we think there's a lot more we can do. Essentially, we want to cover as many consumers as possible and create something like the largest virtual power plant in Europe, but to do that we need a lot of consumers on the platform. So we don't want to limit it to just our energy customers.”
According to Bari, the new funding will enable Greenlee to expand its platform to homeowners in Finland and Norway as a first step in its international expansion, and to enter the unified market for frequency regulation services in those countries.
The company is also looking at other European markets where smart meter penetration is growing (he cited France and the UK as interesting future possibilities). While Bari argues that the startup can adapt to regulatory differences in how energy markets are managed across Europe, he says smart meter penetration is a fundamental prerequisite for the company's efforts to succeed. As such, markets like Germany, where smart meter penetration is low, aren't on the company's roadmap for now.
“We have a goal to have the largest residential virtual power plant and serve consumers across Europe,” he says. “It's a logical step because basically everyone needs electricity, so like any market, if you have access to a lot of consumers, the market is very large. And with over 2 million single-family homes and over 4 million residential buildings in Sweden, we continue to gain a lot of customers.”
“The Nordic market is really big and our ambition is to become the biggest player in Europe.”
Greenely's Series A was led by Belgian investment firm Korys, with participation from existing investor Luminar Ventures and other current shareholders. The company has raised approximately €15 million to date, including this latest round and a €2.5 million seed round in 2019.
Commenting on the Series A funding in a joint statement, Korys' investment director Brieuc de Hults and investment manager Quentin Dupont said: “Greenely is a remarkable company, revolutionizing the way we consume electricity at home and actively contributing to a net-zero future, typical of the type of impactful companies we want to support. We are thrilled to partner with Tanmoy and his team in Greenely's next exciting chapter and support its geographic and product expansion.”
*Not to be confused with French carbon emissions tracking startup Greenly.
This report has been updated to correct the upper limit of average savings for EV owners after an incorrect figure was given during interviews.