Power to the startups
What’s going on in the energy sector? An immensely disruptive shock, to put it lightly. The digital transformation of the energy sector has only just begun. Still, it already is a cross-cutting theme of the investment thinking of the investors playing the field to leverage the power of digital startups in the energy realm. Who are they planning on investing this extraordinary year?
Cleantech venture capital investments – and the amount of energy sector startups – in the Nordics are on the steady upswing, as founding companies around providing affordable and clean energy solutions sits well with the ideals of the impact-oriented startup region.
Helen Ltd, a leading Finnish energy producer, seeks to be part of the digital solution through its 50M€ CVC investment operation arm, Helen Ventures. Their team of seasoned VCs is continuously on the lookout for young, energetic (that’s it, that’s the last pun, promise) startups to invest in and to form long-term partnerships with.
How to stay future-proof and in an industry environment where tomorrow is routinely hard to predict? Don’t be frightened by fuzziness – and ensure that the latest digital innovation is always at arm’s length. This is precisely what Helen is regularly doing by growing its portfolio of digital energy-related startups.
“Many ordinary things that are safely familiar to all of us, such as household electricity and transportation, are in rapid transition, and we want to be able “to address the challenges with those changes fully, Terhi Vapola, VP and the head of Helen Ventures, says. “There’s a huge upheaval going on in this field, and the difference that a startup ecosystem and a nimble-footed founder can make is needed right now. Now is the time to make an impact.”
Founders out there with grandiose plans to revolutionize the energy industry with your almost-ready product? Our targeting seems to be working. Not quite there yet? Not to worry – it might not even be known what kind of digital solutions will be the most applicable in the future. It could be that thing you’ve been working on, so keep on reading, as Vapola walks us through her investment philosophy.
LOOKING FOR FUNDING AS AN ENERGY-DRIVEN STARTUP: A CHECKLIST
1. IS YOUR TEAM IN IT FOR THE RIGHT REASONS?
Helen Ventures is especially interested in those founders and companies who actively want to drive change and be part of transforming the energy sector – and environmentally friendly future. The energy sector is a complex field – it is vital that your understanding and passion for solving the exact problem your company is founded upon is clear.
This is an industry where being deeply committed to the cause does make things easier. Running a startup is a tough job with often pretty tough probabilities. Your mission must be far greater than money or mere growth.
Prove this by demonstrating a long-term interest around the issues your company is set to solve. Being able to illustrate your mission with a genuine, articulate company brand story will make this easier.
2. RIGHT PLACE, RIGHT TIME, RIGHT ENERGY
It’s equally important that your investors’ skills can accelerate your company’s development. Thus, it really should be the right time to seek venture capital for your startup as well.
Long, gone are the days when one thought an investment merely means receiving money – Helen Ventures wants to partner up with startups that are at the right phase to get the best of their resources, advice, networks and sales channels.
“If a B2C company offers a service, such as electricity market solutions, the pace of picking up customers is probably going to be that of a small startup. We at Helen already have over half a million customers, and we do want our startups to benefit from our go-to-market. We too can solve problems that are important to our customers and us through the opportunities of the digital world and the startups that apply these technologies effectively.”
3. IDEAS ARE GOOD. GETTING THINGS DONE IS EVEN BETTER
Smart people worldwide will eventually come up with a bunch of brilliant ideas – intelligent people are always coming up with the same ideas everywhere. In the end, all that matters is who gets it out there first. The pace of getting things done in the market is significant.
Ideas come and go, but getting things done requires systematic doing and sheer stamina. It would be best if you did what you’ve told – to yourself and others – that you’re going to do.
“Analytical and structural thinking, strategic intelligence, passion, ability to get things done, willpower to execute”, Vapola lists the qualities of an ideal startup founder.
4. THE IMPORTANCE OF TRUST, TRANSPARENCY, AND RECEIVING FEEDBACK
As we all know, it’s been quite a year for adapting to unforeseen situations.
“I had never invested in a team that I hadn’t met before, but right now, we cannot sit still; we need to adapt to the change around us. Our industry has taken a huge leap because of the situation. On the other hand, it is good that the way we look at Europe has changed, as the world has shrunk for us. Behind our computer screens, we are all equally as close to each other,” Terhi ponders.
In times like these, being trustworthy and open is more critical than ever. Your team needs to be transparent: prepare to speak your truth toes, exactly how it is. Sugarcoating difficult things about market changes, revenue projections, or other critical necessities won’t help anyone in the long run.
“To be able to do difficult things, it’s important to be honest with yourself, and never underestimate the market feedback. Evaluate market feedback. Never think that you know better than the customer. Sometimes you have a better way of doing; sometimes you learn valuable insight to improve on. Very rarely, things will go like you expected it to go in your initial business plan. We need to know how you’re doing so we can help you find the new way.”
5. NO DIGITAL SOLUTION IS PROFOUNDLY UNSUITABLE FOR THE ENERGY SECTOR
When it comes to the Finnish markets, Vapola – a Nokia veteran herself – notes that the national knowledge of the complex networks and digital systems, partly built through Nokia, is something we could all learn to utilize better, as many of these lessons could be further applied to the energy industry.
As an example, Vapola highlights one of their latest portfolio companies, Gradient. The Dutch software company optimizes district heating networks with an AI-powered tool. The company’s strong, yet small team has achieved a 10-celsius degree reduction in supply water temperature together with a huge district heating company in Central Europe. The company is now focusing on scaling and has already won several public tenders.
Gradient has a clear direct environmental impact and a visible, direct bottom-line impact. Utilizing a digital twin of the heating network, the company can deliver the optimal amount of heat at the time when it is needed.
Their solution is simple, effective, and digital. How about yours?
Helen Ventures hopes to see more companies with digital solutions such as AI and data analytics startups hoping to increase their dialogue with the energy sector. They’re certainly always on the lookout for bold teams unafraid of getting things done. Think your startup fits the bill? Let’s talk at Node by Slush!