European regulators are pushing hard for the adoption of greener energy, with the REPowerEU plan to add 10 million heat pumps by 2027, and solar panels are also on the rise.
However, most installations are carried out by small and medium-sized businesses, where improving work processes could increase productivity.
That's where German startup Reonic comes in. “We provide renewable energy installers with the tools to work extremely efficiently. We do this primarily by providing planning and workflow software,” says co-founder Tristan Menzinger (seated on the right in the photo above).
Menzinger, Lars-Manuel Schneider (sitting center in the photo above), and their college friend and third co-founder Udo Sill worked in a research lab studying renewable energy deployment. That sparked their interest in founding Reonic, but to fill the gaps between theory and knowledge they needed to listen to real customers. They concluded that installers needed end-to-end software, not individual tools.
Startups in other sectors have come to similar conclusions, but selling can be tough when your target audience is already accustomed to the habit. Rheonic promises to increase its value by helping installers sell faster and in greater numbers. “If we could combine a heat pump with a solar power system, for example, our sales would double,” Schneider said.
Unlike competitors who specialize in narrow niches like solar, Rheonic focuses on renewable energy as a whole: photovoltaics, energy storage systems, wall boxes and heat pumps. Beyond specific types of installations, the bigger goal they see is energy self-consumption in every home and business, says Schneider. “And this is at the core of our product, which always works the same wherever you are.”
The promise of accelerating the adoption of renewable energy seems to have resonated with investors: To expand across Europe, Reonic has just raised €13 million in a Series A funding round led by Northzone, with participation from existing investors Point Nine and Puzzle Ventures.
This is consistent with venture capitalists’ preference for climate-focused start-ups, which face market risk in their go-to-market strategies rather than the scientific risk of inventing new technologies.
Still, market risks remain real.Aurora Solar, a U.S. company that provides software to help solar-power installers manage their sales, laid off 20% of its roughly 500 employees earlier this year in a $523 million deal.
But with 21 team members and €16 million in funding so far, Reonic is closer to smaller companies such as Arch, Enerflo, Lun and Scoop Solar.
Image credit: Reonic
The company has also seen growth typical of early-stage companies that have found product-market fit, saying it has tripled recurring revenue in the past six months alone. “We've had a lot of momentum since we launched three years ago, but the reality is we're just getting started,” Schneider said.
Subsidies and other legal frameworks vary from country to country, but Rheonic’s internationalization is being driven by its founders’ confidence that it can enter new markets without much customization. After the DACH region, the company has also launched in France and has had a soft launch in Italy, said Menzinger, who oversaw much of the process.
The company remains headquartered in Augsburg, Bavaria, but almost half of its staff works in Berlin and earlier this year opened a second office there to more easily recruit international talent – another key element of the expansion supported by the new funding round.