Investing into 1KOMMA5º, the breakout climate tech company decarbonising European homes.
What if Europe’s homeowners could live on free, clean energy while also contributing to the green transition of the electricity grid and the retirement of all those dirty residential gas and oil heaters across the continent?
This would be nothing short of a consumer revolution and it would unlock the vast potential for positive climate impact of residential buildings that today are responsible for roughly 9% of global greenhouse gas emissions or about 5.5 Gigatons annually.
And that is precisely the vision of 1KOMMA5º, a breakout climate tech start-up headquartered in Hamburg, Germany, on a mission to make this greener future a reality. And doing it fast!
In less than two years, the company has built up a business operating across six countries that turns over hundreds of million of revenues while decarbonizing the energy use of thousands of households.
Decarbonising our homes is a critical lever to achieve our climate ambitions… But this is hard. It’s a very local business. Every home is different. Each home needs a trusted partner to guide them through the voyage and deliver a quality solution.
But installing good hardware and doing it well at the right price is no longer enough to compete in this market. Intelligent digitization of installed systems so the customer can optimize self consumption as well as monetize surplus electrons and battery capacity on the grid is crucial. It further enables the green transition of energy grids as renewable power increases its share of the energy mix.
Over the past few years we have spent significant time evaluating dozens of home decarbonisation companies on both sides of the Atlantic. Solar installers (which we catalyze through OpenSolar), old building retrofits (which are made efficient through low-cost solutions like Kelvin) and the vast myriad of solar+heat pump+battery installer companies.
The critical challenge we had been unable to overcome in the latter was the excessive acquisition cost of customers relative to the one off transaction of installing solar panels, home batteries, or heat pumps. Secondly, many of the players were uniquely focused on a single regional market without the right digital tools, which made their impact and VC-return profile minimal. And none had cracked the critical digitization and dynamic connectivity to energy markets and grids.
Through this process we met Philipp Schröder, the founder of 1KOMMA5º, a few years ago and have been following the team as they have executed on their very ambitious and deeply insightful masterplan for building a game changing company that would overcome these growth challenges we had seen.
Starting out in Germany with a fast paced M&A buy-and-build strategy to create a critical mass of market and channel power, the company has already entered Sweden, Finland, Denmark, Spain, Italy, and Australia and is now one of the largest and most recognizable climate tech businesses in Europe.
But what has impressed us even more than the well executed roll-up is the digital product development and smart grid services the company has been able to build and launch to its customers. The core of this is the “Heartbeat” system and 1KOMMA5º’s cloud platform that powers and connects each home to the grid and energy markets. This turns them into independent power plants and profit centers that optimize the energy use and ROI of each customer. This unlocks the potential to offer dynamic electricity tariffs and fixed price smart energy contracts that have recently been launched in Germany and Sweden. 1KOMMA5º is leading the charge to the future of where this market is going.
In this sense, the company is really a hardware-enabled digital marketplace connecting millions of homeowners on the one side with the electricity markets and grid operators on the other side. This marketplace moves both bits and electrons between its participants while the homeowner earns income on top of the energy cost savings offered by solar and storage.
In summary, what the 1KOMMA5º founders have accomplished in just years is truly impressive. We are therefore excited and grateful to have joined G2 Venture Partners in the recent Series B fundraising round alongside existing investors Haniel, Eurazeo, btov, and Norrsken VC. Jacob has joined the Board as an Observer and we look forward to supporting their continued scaling to become the leading home decarb player in continental Europe.
Welcome to the #2150Family 1KOMMA5!
2150 is a venture capital firm investing in technology companies that seek to sustainably reimagine and reshape the urban environment. 2150’s investment thesis focuses on major unsolved problems across what it calls the ‘Urban Stack’, which comprises every element of the built environment, from the way our cities are designed, constructed and powered, to the way people live, work and are cared for. Find out more at www.2150.vc. 2150 is a part of Urban Partners.