The start-up helps customers with the construction of photovoltaics – and thus meets with great interest.
(Photo: IMAGO/Westend61)
Frankfurt The energy start-up 1Komma5 Grad could become the next German unicorn. This is what companies are called with a valuation of more than one billion euros. According to financial sources, the company has approached investors to raise an additional 150 to 200 million euros in equity.
The funding round is expected to be completed by the summer at the latest, according to people familiar with the matter. The money should come from existing investors such as Porsche Ventures, Haniel, Eurazeo and Jan Klatten, and one or two new investors should also come along. It was said that 40 interested parties had registered for it.
This would make it the second potential unicorn of the German start-up scene within a few weeks: In mid-February, financial circles announced that the hydrogen company Sunfire was heading for another round of financing and thus the billion-euro threshold.
1Komma5 Grad has targeted an IPO for 2024 or 2025. The company is already making initial contacts with investment banks that would organize a deal, it said. However, no so-called IPO consultant has yet been mandated to accompany the company on this path. 1Komma5 Grad declined to comment.
The energy start-up with 900 employees is benefiting from the boom in demand for solar systems, heat pumps, electricity storage and charging infrastructure for electric cars. The company installs the technology for customers and ensures long-term optimized operation, also with its own software.
The energy crisis triggered by the Russian war of aggression against Ukraine triggered a boom in demand, which is also reflected in the figures from 1point 5 degrees: In 2022, the company posted sales of 206 million euros and earnings before interest and taxes (EBIT) of 20 million euros .
Craft businesses are taken over for more growth
For 2023, 1Komma5 Grad expects sales of 550 to 600 million euros. Almost two thirds of the business growth should be achieved from within, one third through takeovers. The company’s future goal is an EBIT margin of over 20 percent.
After Germany, Sweden, Finland and Australia, 1Komma5 Grad is currently expanding to Italy and Spain. To this end, 1Komma5 Grad prefers to buy up craft businesses and ensures their professionalization and manufacturer certifications. The start-up has already taken over 22 such companies.
>> Read also: Obstacles to balcony power plants remain for the time being
Since the sellers usually receive part of the payment as non-voting shares in the deals, 1Komma5 Grad has only spent half of the previously collected 200 million in investor funds.
In addition to the hardware, the young company focuses on software that helps customers to use the systems in the most economical way. The Heartbeat energy management tool ensures that power-intensive devices such as heat pumps run whenever possible when electricity is self-produced or available cheaply from the grid.
Strongly growing market for photovoltaics
While 1Komma5 Grad is already working with manufacturers such as Enphase, Solaredge, Sungrow and Stiebel Eltron, talks with a well-known manufacturer of electric cars are still in the final phase. These “Software as a Service” sales should be in the double-digit million range next year.
With the current round of financing, 1Komma5 Grad wants to catch up with competitors such as the photovoltaic provider EKD or the solar system rental company Enpal. The start-up recently poached managers from Google and Tesla for this.
According to financial circles, EKD is being prepared by its owners for a sale in which the company could be valued at more than two billion euros. Enpal announced a €215 million funding round in January at a valuation of €2.25 billion.
The photovoltaic market with competitors such as Eon, EnBW or the Shell subsidiary Sonnen is currently growing strongly. According to figures from the Federal Network Agency, solar systems with a capacity of more than 600 megawatts were added each month in Germany in 2022. In order to achieve the expansion target of 215 gigawatts set for 2030, the pace would have to increase. Solar systems with a total output of 65 gigawatts are currently installed.
More: Bundestag decides more speed for renewable energies