B-series financing completed: instagrid raises one of the biggest cleantech funding rounds, $33M, to advance international expansion
We are excited to announce our B-series financing round of $33M (€29M), and welcome a new climate tech investor, Energy Impact Partners, to join our investor pool. This funding round will support our international expansion in Europe and the US, to bring portable power available for all professionals, no matter where they are. In addition, we will expand to include digital services and connectivity to enable smart, customized energy solutions in the future.
As a result of this funding round, our total funding rises to more than $45M (€40M). The B-series financing round was led by the US-based Energy Impact Partners, EIP, while all of our existing investors participated in the financing round as well, including SET Ventures, Segnalita Ventures, blueworld.group, Hightech Gründerfonds and Wille Finance AG. The chairman of our advisory board, Pierre Pascal Urbon, also joined as an investor for this round.
EIP is an US-based venture capital firm leading the transition to a sustainable future. “EIP’s mission is to back the best founders who are working to decarbonize industries with innovative technologies. Mobile power generation through combustion engines is as big of a problem as passenger cars and has been overdue for disruption. We have been very impressed by instagrid’s founders, Sebastian and Andreas, who have engineered the best product in the market and scaled the company rapidly. We are proud to support their global expansion”, says Matthias Dill, Managing Partner at Energy Impact Partners.
“Instagrid is transforming the outdoor economy with its industry leading, mobile power systems that enable mobile workers to operate sustainably,” said Anton Arts, managing partner at SET Ventures, one of our existing investors from the previous funding round. “Instagrid’s founders have assembled the strongest team in energy storage systems to drive their ambitious road map and disruptive technology into new markets and use cases.”
Interview with instagrid founder and CEO, Sebastian Berning
How would you explain instagrid to your grandmother?
instagrid develops and produces portable high-performance batteries that can power any device – really any device – that has a 230V power plug. This “mobile power outlet” has been specifically designed for professionals and is therefore extremely robust, waterproof and durable. We use it to replace mobile gasoline and diesel generators, which not only have an enormous environmental impact, but also prove to be expensive and unreliable in operation. Our customers love the devices because they can operate independently of the power grid, quietly and without exhaust fumes, which often also adds noticeable value to their own services.
Was this your concept from the beginning, or has your model changed somehow since the start (pivot etc)?
We are pretty much doing today what we set out to do in the beginning. However, the market has fundamentally changed. When we started, Greta von Thunberg and “Fridays for Future” didn’t get much public attention and we positioned the product as a productivity solution. Today, we get many inquiries from companies explicitly looking for sustainable solutions, e.g. from the construction industry, landscape maintenance, media industry, city cleaning and many other industries. “Zero emission” has become mainstream and we deliver the right solution for mobile applications.
How exactly does your business model work?
The business model is currently still very simple: We manufacture devices and sell them to end customers either directly or via our brand partners. In the future, however, they will also be available as part of a subscription model, i.e. you pay a monthly fee that also depends on how much you use the devices.
How did the idea for instagrid arose?
During our many years of activity in the battery industry, we noticed at some point that there were dozens of battery power supplies for camping, but no convincing solution for professional users. Our hypothesis from the beginning was that there must be a big market here, as the need is much more essential than for recreational applications. We then spent about three years developing the necessary technology to be able to offer this demanding customer group a product without compromise.
How has instagrid developed since its founding and how big is your startup now (employees, revenue, other key figures)?
We now have over 50 employees and are growing extremely fast. Immediately after our start of production last summer, we shipped over 1.000 devices every month, but with the current demand, we can hardly keep up with production.
Your company is based in Ludwigsburg, away from the major start-up centers. Is that an advantage or a disadvantage?
Both. If you develop hardware, especially electronics and batteries, you’ll find an incredibly high density of world-class talent in the Stuttgart area. Also, the job market for startups is not as competitive as in Munich, for example. However, we see ourselves as a European company and, for example, started to build up our sales and marketing team in Scandinavia in our founding year. That’s where the early adopters of sustainable technology are to be found, and it was easier for us to develop a coherent brand image. At that time, Stuttgart was mainly in the media because of its air pollution. Currently, we have just opened our office in Berlin, where we will bundle a large part of our digital expertise in the future.
You recently raised $33 million. How did you get in touch with your investors?
As in the A-round, we have been in constant contact with many investors for years. We still know Matthias Dill from EIP, for example, from his previous fund at Statkraft Ventures. The climate tech scene in Europe is manageable, and after a short time you know most of the investors and the other start-ups from the relevant events and through networks. However, we noticed in 2021 how fast the ecosystem is growing now. There are many new companies and VCs in the field, and there is an atmosphere of optimism.
Please take a look back: what went really wrong in the past few years?
Like many others, the supply chain threw a spanner in the works for us in 2021. The pandemic brought some of the global supply chains for battery cells and electronic components to a standstill, so we were only able to fulfill half of our orders. We did not see that coming.
And where have you done everything right so far?
- We have always tried to be very fast and get feedback on our MVP from potential customers at an early stage. With our first prototype in a wooden box, we traveled thousands of kilometers across Europe in the car to win partners. This proved to be the right thing to do – the product ended up needing relatively few iterations.
- As a hardware startup, you have to go through the infamous “Valley of Death” in the beginning: You have to invest in manufacturing equipment and materials, but you still have relatively small quantities, so the investments don’t really pay off. By working with strong brand partners from the region, however, we were able to “jump” to high production volumes right away and only focused on building our own sales channels in the second step.
What general tip would you give to other founders?
It’s important to follow your beliefs and ideas, regardless of whether VCs or the media think it’s sexy right now. When we started in 2018, cleantech was dead and everyone was doing “something with AI.” We were told we would have a hard time finding funding and would have to go to the big hubs in Berlin or Munich to get investors’ attention. That was obviously not true, even though we could not have foreseen that the landscape would change so rapidly. As founders, we don’t necessarily fit the stereotype either: We both left a well-paid corporate job as family fathers in our mid-thirties and didn’t found a company right after university. Just do it – the professional experience far outweighs the somewhat less flexibility in this phase of life. We probably wouldn’t have made it this far in this industry otherwise.
Where will instagrid be in a year’s time?
We are currently working on building new business models in the energy sector on our portable batteries, i.e. hardware-enabled services. It’s like e-scooters: we currently make the hardware, i.e. the scooters, but in the medium term we want to offer the equivalent of micromobility, i.e. supplying energy directly to customers. We hope that next year we will be able to tell you a little more about the exciting pilot that we are currently launching.