Coming off the back of Europe’s hottest summer on record, the imperative to invest in climate technology has never felt more pressing.Â
During summer 2022 (June 1st to August 31st), Spain recorded “an average anomaly of +2.2C”, meaning the average temperature sat more than two degrees above expected levels during this period.
Combined with an unseasonably dry and warm Autumn, this augurs poorly for the climate situation in Spain.Â
A recent McKinsey report on Spain’s decarbonisation potential reported that with a >2C temperature rise worldwide, some regions in Spain would see >45 days per year of >37 celsius, rendering large areas of the nation essentially uninhabitable for over a month each year, and decimating agricultural potential in these regions.
This situation is highly concerning, however, as also noted in the McKinsey report, Spain has the potential to become a leader in decarbonisation, energy transition and green technology… “Rich in natural resources and with highly competitive renewable energy potential, these factors present an opportunity for Spain to become a European leader in sustainability and a clean-energy hub… Much of the upside from the transition [to clean energy] will fall to Spanish organisations that make sustainability a strategic priority”.
At K Fund, one of the opportunity areas we believe is most promising is solar – building enabling technologies on top of existing core infrastructure, and updating core infrastructure to augment energy generation and distribution.Â
There are a number of correlated tailwinds, including national and European grants that provide a favourable environment for industrial and at-home installation (up to 55% on solar panel installation), and a European government mandate for PV installation in commercial and residential buildings from 2025 and 2029 respectively.
In fact, solar capacity in Spain tripled in the three years to 2021 (with generation sitting at a close second behind Germany in 2021), and generation third in the same year. This is set to continue as soaring gas prices have provided an incentive to find cheaper, greener alternatives.Â
We believe there are a number of areas with considerable potential in solar. Namely, those startups developing the installation and management tech-stack for industrial scale solar farms, those building the smart home provider for clean energy, software to optimise energy consumption, distribution and grid charge-back, and novel off-grid storage applications.
We are keen to speak to founders working across these areas in Southern Europe and Latin America.
There is an interesting opportunity for venture in those businesses developing the solar tech stack - i.e. incorporating technology in a previously analogue process to finance projects, capture data, optimise installations and management, cross-sell other clean technologies and build long-standing commercial relationships with customers across B2B and B2C.
On the B2B side, competitors are tackling this from various angles - either approaching customers through owning the installation process, providing SaaS to streamline their third party installation, attempting to becoming the marketplace through which customers access installers, or offering solutions to better manage existing legacy solar farms.
Approaching this via owned installation, Energy Solar Tech (Madrid) is working across the hardware, installation and management stack. They build a relationship by owning the installation process (having developed proprietary panel technology), managing large-scale solar farm installation for third parties, then building an analysis layer onto plants that optimises performance, repair and renewal.
By building a relationship at point of installation, they are able to lock in the whole process - however the complexities around owning both a hardware and software play will be considerable. Working in the same area but with a focus on the burgeoning agri-voltaics field, PowerfulTree (Vitoria-Gasteiz) offers end-to-end plant projects for agricultural applications.
Ezzing Solar (Madrid) has built a SaaS product to manage the whole solar development process, from CAD-enabled planning through a marketplace of installers to ongoing management of developments for repair and renewal, seeing strong traction across Spain, Italy and Latin America.Â
Their standout feature is streamlining the software side of installation, providing a seamless tool to both developers and the installers they work with, on top of which they’re building a marketplace play for installers across Southern Europe to connect the hyper-fragmented, local world of installation to often larger scale, more regional development opportunities.
This is an exciting opportunity, especially given the business models seen in software, yet owning the development of a multi-sided marketplace, then scaling this internationally, while also reducing customer churn post-installation will be an interesting challenge.Â
Marketplaces are notoriously difficult to build, especially here where the installation marketplace is so localised, however there will be winners in whoever can capture sufficient, defensible market share. The successful businesses in the space will lock in B2B customers (and installers) with a superior experience across the installation and management process, leveraging data to then improve performance, suggest repairs, and upsell products and financing.
On a more focused level, RatedPower (Madrid) has seen success owning the design of utility-scale solar photovoltaic plants, focusing on optimising cost, reducing risk and maximising yield for solar plant installations. This led to a recent acquisition by Enverus, likely signalling integration into a broader stack in the coming years.
Approaching the problem via management and diagnosis, Clever Solar Devices (Soria) has developed a plug-and-play IoT device capable of tracking the performance and health of older panels, allowing real-time management of both at-home and industrial scale solar farms.
On the B2C side, the market largely reflects similar dynamics, with players attempting to own the “smart home for clean energy”, building a customer-facing proposition that adds in financing streamlines installation, cross-sells other clean tech (EV chargers, batteries, heat pumps) and provides an attractive software layer that allows the optimisation of consumption, grid pay-back and renewal.
Pure installation is a large market served by many players, but one that will cap out in Spain within the next decade. Legacy providers (HolaLuz, utilities providers etc.) provide broad geographical coverage (at varying degrees of customer satisfaction), but largely provide a legacy proposition with limited customisation, financing options or customer software layer.
Startups working in this space are currently capturing customers with the proposition of cheaper, cleaner energy, then building their own clean energy ecosystem(s) on top. Bootstrapped and now over a decade old, Powen (Madrid) pioneered this approach, taking on legacy energy players with a novel financing model and home-management proposition.Â
Capitalising on low customer trust for the offerings of utility providers, a slew of newer entrants have recently arrived, including Samara (Madrid) and Solarmente (Barcelona), both attacking the smart clean home opportunity with the beachhead of financed solar installation, with the intention to move laterally across the clean energy generation and management stack as they grow.
This is a considerable opportunity, and we are watching these market dynamics closely. Tackling this opportunity from other angles include Tornasol (Valencia), offering a novel form of balcony-first panels, and marketplace players Soof (Barcelona) and Sunalizer (Valencia) streamlining customer access to various installation options.Â
Of note are also Suntropy (Santander), offering SaaS for small installers and pure-play financing players Noah (London/Madrid) and Pontio (Madrid) offering customer financing for panel projects built into both the above platforms and legacy offerings.
And lastly, there’s an opportunity in novel uses of panels moving beyond at-home and solar farms, such as the work done by SolumPV (Seville) in off-grid micro-mobility charging stations. Developing healthy margins, a relevant tech play (proprietary management software, consumer app, B2B white-label opportunities), building solar into traditionally grid-powered use-cases in Spain will see some interesting businesses born in the coming years.
BeePlanet Factory (Pamplona) are doing fascinating, adjacent work in repurposing EV batteries to store energy, vital for off-grid or geographically inaccessible farms, while HessTec (Seville) do modular energy storage, flow management and distribution solutions stored in shipping containers for similar use cases.
As demonstrated in more mature markets such as the US and Germany, there is a considerable opportunity for large, successful local players to be built both in B2B and B2C (without necessarily a need for international expansion).
On the B2B side, defensibility and scale will be built through access to the highly fragmented installer market, overcoming the supply shortages that will inevitably develop as demand for plant construction increases exponentially in the coming years. Winners will own this alongside software that locks B2B customers in with at-scale energy saving, cross-sell and efficient plant management.
On the B2C side, there is space for a number of large players, and while we are less interested in verticalized players here, we believe that winners will be those that build the multi-sided at-home energy management software. These players will attract customers with cost savings up front (offering attractive financing options), then move into providing ongoing analysis and management of at-home production, storage & grid charge-back, before cross-selling services in other clean energy areas.
Based on the potential size of the market, existing solar generation, and strength of founders working in this space, we believe that Spain and Southern Europe have a right to play here, and we’re interested to discuss with anyone working across the solar stack in the region across B2B and B2C.
—
Are we missing any companies? Let us know - max@kfund.vc
Coming off the back of Europe’s hottest summer on record, the imperative to invest in climate technology has never felt more pressing.Â
During summer 2022 (June 1st to August 31st), Spain recorded “an average anomaly of +2.2C”, meaning the average temperature sat more than two degrees above expected levels during this period.
Combined with an unseasonably dry and warm Autumn, this augurs poorly for the climate situation in Spain.Â
A recent McKinsey report on Spain’s decarbonisation potential reported that with a >2C temperature rise worldwide, some regions in Spain would see >45 days per year of >37 celsius, rendering large areas of the nation essentially uninhabitable for over a month each year, and decimating agricultural potential in these regions.
This situation is highly concerning, however, as also noted in the McKinsey report, Spain has the potential to become a leader in decarbonisation, energy transition and green technology… “Rich in natural resources and with highly competitive renewable energy potential, these factors present an opportunity for Spain to become a European leader in sustainability and a clean-energy hub… Much of the upside from the transition [to clean energy] will fall to Spanish organisations that make sustainability a strategic priority”.
At K Fund, one of the opportunity areas we believe is most promising is solar – building enabling technologies on top of existing core infrastructure, and updating core infrastructure to augment energy generation and distribution.Â
There are a number of correlated tailwinds, including national and European grants that provide a favourable environment for industrial and at-home installation (up to 55% on solar panel installation), and a European government mandate for PV installation in commercial and residential buildings from 2025 and 2029 respectively.
In fact, solar capacity in Spain tripled in the three years to 2021 (with generation sitting at a close second behind Germany in 2021), and generation third in the same year. This is set to continue as soaring gas prices have provided an incentive to find cheaper, greener alternatives.Â
We believe there are a number of areas with considerable potential in solar. Namely, those startups developing the installation and management tech-stack for industrial scale solar farms, those building the smart home provider for clean energy, software to optimise energy consumption, distribution and grid charge-back, and novel off-grid storage applications.
We are keen to speak to founders working across these areas in Southern Europe and Latin America.
There is an interesting opportunity for venture in those businesses developing the solar tech stack - i.e. incorporating technology in a previously analogue process to finance projects, capture data, optimise installations and management, cross-sell other clean technologies and build long-standing commercial relationships with customers across B2B and B2C.
On the B2B side, competitors are tackling this from various angles - either approaching customers through owning the installation process, providing SaaS to streamline their third party installation, attempting to becoming the marketplace through which customers access installers, or offering solutions to better manage existing legacy solar farms.
Approaching this via owned installation, Energy Solar Tech (Madrid) is working across the hardware, installation and management stack. They build a relationship by owning the installation process (having developed proprietary panel technology), managing large-scale solar farm installation for third parties, then building an analysis layer onto plants that optimises performance, repair and renewal.
By building a relationship at point of installation, they are able to lock in the whole process - however the complexities around owning both a hardware and software play will be considerable. Working in the same area but with a focus on the burgeoning agri-voltaics field, PowerfulTree (Vitoria-Gasteiz) offers end-to-end plant projects for agricultural applications.
Ezzing Solar (Madrid) has built a SaaS product to manage the whole solar development process, from CAD-enabled planning through a marketplace of installers to ongoing management of developments for repair and renewal, seeing strong traction across Spain, Italy and Latin America.Â
Their standout feature is streamlining the software side of installation, providing a seamless tool to both developers and the installers they work with, on top of which they’re building a marketplace play for installers across Southern Europe to connect the hyper-fragmented, local world of installation to often larger scale, more regional development opportunities.
This is an exciting opportunity, especially given the business models seen in software, yet owning the development of a multi-sided marketplace, then scaling this internationally, while also reducing customer churn post-installation will be an interesting challenge.Â
Marketplaces are notoriously difficult to build, especially here where the installation marketplace is so localised, however there will be winners in whoever can capture sufficient, defensible market share. The successful businesses in the space will lock in B2B customers (and installers) with a superior experience across the installation and management process, leveraging data to then improve performance, suggest repairs, and upsell products and financing.
On a more focused level, RatedPower (Madrid) has seen success owning the design of utility-scale solar photovoltaic plants, focusing on optimising cost, reducing risk and maximising yield for solar plant installations. This led to a recent acquisition by Enverus, likely signalling integration into a broader stack in the coming years.
Approaching the problem via management and diagnosis, Clever Solar Devices (Soria) has developed a plug-and-play IoT device capable of tracking the performance and health of older panels, allowing real-time management of both at-home and industrial scale solar farms.
On the B2C side, the market largely reflects similar dynamics, with players attempting to own the “smart home for clean energy”, building a customer-facing proposition that adds in financing streamlines installation, cross-sells other clean tech (EV chargers, batteries, heat pumps) and provides an attractive software layer that allows the optimisation of consumption, grid pay-back and renewal.
Pure installation is a large market served by many players, but one that will cap out in Spain within the next decade. Legacy providers (HolaLuz, utilities providers etc.) provide broad geographical coverage (at varying degrees of customer satisfaction), but largely provide a legacy proposition with limited customisation, financing options or customer software layer.
Startups working in this space are currently capturing customers with the proposition of cheaper, cleaner energy, then building their own clean energy ecosystem(s) on top. Bootstrapped and now over a decade old, Powen (Madrid) pioneered this approach, taking on legacy energy players with a novel financing model and home-management proposition.Â
Capitalising on low customer trust for the offerings of utility providers, a slew of newer entrants have recently arrived, including Samara (Madrid) and Solarmente (Barcelona), both attacking the smart clean home opportunity with the beachhead of financed solar installation, with the intention to move laterally across the clean energy generation and management stack as they grow.
This is a considerable opportunity, and we are watching these market dynamics closely. Tackling this opportunity from other angles include Tornasol (Valencia), offering a novel form of balcony-first panels, and marketplace players Soof (Barcelona) and Sunalizer (Valencia) streamlining customer access to various installation options.Â
Of note are also Suntropy (Santander), offering SaaS for small installers and pure-play financing players Noah (London/Madrid) and Pontio (Madrid) offering customer financing for panel projects built into both the above platforms and legacy offerings.
And lastly, there’s an opportunity in novel uses of panels moving beyond at-home and solar farms, such as the work done by SolumPV (Seville) in off-grid micro-mobility charging stations. Developing healthy margins, a relevant tech play (proprietary management software, consumer app, B2B white-label opportunities), building solar into traditionally grid-powered use-cases in Spain will see some interesting businesses born in the coming years.
BeePlanet Factory (Pamplona) are doing fascinating, adjacent work in repurposing EV batteries to store energy, vital for off-grid or geographically inaccessible farms, while HessTec (Seville) do modular energy storage, flow management and distribution solutions stored in shipping containers for similar use cases.
As demonstrated in more mature markets such as the US and Germany, there is a considerable opportunity for large, successful local players to be built both in B2B and B2C (without necessarily a need for international expansion).
On the B2B side, defensibility and scale will be built through access to the highly fragmented installer market, overcoming the supply shortages that will inevitably develop as demand for plant construction increases exponentially in the coming years. Winners will own this alongside software that locks B2B customers in with at-scale energy saving, cross-sell and efficient plant management.
On the B2C side, there is space for a number of large players, and while we are less interested in verticalized players here, we believe that winners will be those that build the multi-sided at-home energy management software. These players will attract customers with cost savings up front (offering attractive financing options), then move into providing ongoing analysis and management of at-home production, storage & grid charge-back, before cross-selling services in other clean energy areas.
Based on the potential size of the market, existing solar generation, and strength of founders working in this space, we believe that Spain and Southern Europe have a right to play here, and we’re interested to discuss with anyone working across the solar stack in the region across B2B and B2C.
—
Are we missing any companies? Let us know - max@kfund.vc
