Episode #012 with Torsten Brammer & Solytic:
Another new episode this way comes with double the power. This week Dr. Brammer is joined by Konrad Perényi and Steffen Mangold of Solytic. Solytic is a digital platform used to maximize solar performance to save costs, drive profits, and extend life cycles. Its mission is to automate top performance for solar PV.
Konrad Perényi and Steffen Mangold are two of the four founders and focus on the marketing place/marketing, and tech/product respectively. Started in 2009, Solytic has come a long way since its humble beginnings and continues to change the world. Tune in to hear more about the company and what they're doing to advance solar.
Show Notes:
10:57 - 12:17: How did you manage the merger of your two young companies?
15:19 - 15:41 / 17:27 - 19:04: What service is Solytics providing?
24:24 - 25:30: With your analytics can you already pin point possible causes or can you just tell that it is not running well? Can you already help the owner look for the issues?
31:44 - 33:07 Steffen, What is your biggest learning when starting a company?
34:27 - 37:13: Konrad, What is your biggest learning when starting a company?
38:43-40:02: How did you find the seed funding?
43:44 - 46:03: Where do you want to take the company in the next 5 years?
47:30 - 49:34: What are other top trends in the market that you see solar heading?
Transcript:
[00:00:03.970] - Torsten
So welcome to another episode of The Solar Journey. And today we have a new consolation here at The Solar Journey, not only one guest, but two guests. And these gentlemen are gentlemen from the company called Solytic. It's an IT company from exactly from Berlin. And they provide services to run solar plants in the perfect way. Welcome, Konrad. Welcome, Steffen.
[00:00:37.190] - Steffen
Thank you.
[00:00:38.750] - Torsten
Hey. Yeah. So let me just briefly introduce Steffen and Konrad. So Steffen is a trained IT specialist and he's now the CTO of Solytic. In short, he has been involved in software solutions for power plants, solar power plants for more than 14 years. So he worked as a managing director for Baltic SD and the managing director of Power Do and then Solytic merged in 2019. And since then he's been the CTO of Solytic. So he's the renewable IT nerd in this group. And Konrad, he's got more a commercial focus. So since 2008, he has been involved in various startups that provided communication services, restaurant seat reservations. He was involved in business development, sales, and pretty much all not in solar. He was also a VP of Rocket Internet, that's a fairly famous German company builder with focus on web-based business models. And maybe the most famous child of Rocket Internet is Zalendu. That's a mutual national fashion and lifestyle platform with €6 billion in revenue. But he then moved into the renewable space in 2017 when he found it Solytic. And as I mentioned before, in 2019 Power Do that's Steffen and Konrad joined forces.
[00:02:35.690] - Torsten
Solytic is a data driven marketplace to maximize the all around performance of solar PV plans. Yeah. Welcome again. You've been in the renewable space for pretty long time. What was the driving force? Why did you jump in there? There's plenty of opportunities for an IT specialist. Why renewables?
[00:03:06.450] - Steffen
Yeah, because actually my wife was working in the solar industry and over my wife I get contacted the company because the company is creating plant sites all over Europe and that was in 2014. So right before the big solar boom, the first solar boom, and this company had a big problem with IT services to monitor the solar plants. So at this time there was no actual software on the market to do this in a professional way, especially not if you want to scale with a huge amount of sites. And I had my office right really close to this company and then we get in contact. And so I started to actually trying to solve their problems by doing small IT services to consolidate the data to make it more easy for them to monitor. All the sites also started with IT service. So I traveled around Europe and the new sites they are built and installed the IT system into the site that was in Italy, Spain, and all around. And I managed to get the data out of the site. So it was also a site where on field Internet was not so stable.
[00:04:27.700] - Steffen
So no 5G or something. So, yeah, was not so easy to connect these sites. And then this software which I created was basically excellent markups to group the data was more and more evolving into an idea how software solution could solve this problem for them. And then actually I met Johannes Dal at this time because he was working for the solar site builder. And then the idea gets more and more solid. And then we started the company Power Do.
[00:05:14.030] - Torsten
Excellent. And the solar space has been developing quite nicely. There were a couple of dips in the market development, particularly in Germany. How did that affect your career, your business?
[00:05:32.090] - Steffen
Yeah, I think it was pretty good timing. So we started to get into this market before the big solar crash. And so we had the idea of what we can do to create this software. And then the big crash comes and we were actually the first company on the market which was able to create hardware independent software. And it was actually an early starter at this time. And so we right get into the market. When the second wave started.
[00:06:17.810] - Torsten
I can at least remember two crashes. So one around 2008, 2009 with a financial crisis, but then also in Germany, later on with a few years later, what time frame are we talking about?
[00:06:30.950] - Steffen
So this was in 2014, and then I think that was the first question. So that was pretty good timing. So then on the second wave, all the plants are built up all over Europe, especially also in Germany. And we had a good opportunity to get in these new sites to support the companies to monitor their plans. And that was pretty good timing.
[00:07:02.130] - Torsten
And Konrad, so you were involved in various startups. You're a startup person as well. I didn't mention all the different names. So just tell us what you did in your previous roles and why you then moved to why you then started the company, sold it in 2017. Yeah.
[00:07:29.360] - Konrad
First of all, thanks for having us, by the way.
[00:07:32.160] - Torsten
Sure.
[00:07:32.990] - Konrad
I have done a couple of internships when I was super young at companies, so folks who aren't satisfied and so on. So this was my first working experience, which was good because I found out that this is not the way I want to live my life. I'm the worst employee. If I have a boss above me, I really suck here. And if I don't have pretty much full responsibility and ownership over what I'm doing, then it just doesn't work for several reasons.
[00:08:07.640] - Torsten
You're a rebel.
[00:08:08.890] - Steffen
I can really strong relate on this.
[00:08:12.170] - Konrad
So I always said, hey, I know things better and I actually do sometimes, but I needed the chance to prove them. Otherwise, it's just cheap talk. So that's why I moved into the startup industry. Even during my studies back in the days, had a couple of companies back there, also started off as a salesperson, worked my way up, also went to Singapore for two years for Kwandu. You mentioned before online table booking. It was a quite great experience because we were responsible for entire eight pack and building up the markets over there in a different time zone for more than 40 people. So that was amazing.
[00:08:56.450] - Torsten
How did you like life in Singapore?
[00:09:00.290] - Konrad
It's slightly different. So the rent over there was higher than my current salary. So it's super expensive, but obviously it's nice if you just need like two and a half hours to Bali. So I've been there quite a few times. But Singapore as a city, I mean, amazing. They're a futuristic city. They are acting fast not only on COVID but also now on climate change. And they're actually really taking care of their own people. They're building new stuff. They want to be top notch. So it's amazing to see what you can do if you really want it. And Singapore is a great place to actually live. But also after a while it gets boring because you've been there, done that. And then I also realized that after two years, so I came back and my wife and me, we got pregnant together. So the family things started. So that's why we moved to Berlin. And then I had the chance to, I mean, I was still working for startups outside of renewables, but then I had a chance to actually go into renewables because it triggered some of my check boxes. So startup responsibility, ownership, there's an economic opportunity, a huge one.
[00:10:19.410] - Konrad
It was just a matter of time, like when is it happening? And as we can see, it's super happening now, but also this green renewable thing. So we had to move into this direction anyway. So I said, why don't do it now where you have the chance? So this was my reason.
[00:10:39.590] - Torsten
Excellent. And the two of you, you used to work for two different companies and you merged. That's pretty unusual for two young companies to come together, right? So how did that come about? And how did you manage such a merger?
[00:11:01.670] - Steffen
It's strange that we hear that so often. It's so unnatural because it feels like it was really natural. The only way to go because power due is created a little bit different. So we grow very slowly with getting customer by customer, small company with only four people. And then we met actually soluted and Solytic was the opportunity for us because Solytic was already grown, solid founded, but a lot of employees already real team. And that was a big chance for us to get the ideas we had for years to live because we had the power with all these bigger dev team to get it actually done. And this was no big thinking. So about this, it was actually the only way to go.
[00:12:02.810] - Torsten
How did you get in touch? Did you call each other and say why don't we join forces or how did it happen?
[00:12:07.850] - Steffen
No, it was actually random on a trade fair. So my co founder Johannes met the other. Johannes broke out on some event and they get into talking and they quickly understood that they are on the same path. So both companies are exactly on the same path and we have two ways to go. We work against each other, dealing with the same customers and fighting. So we also noticed that we're already talking with the same customers and the other way is to do it together and to have a 100% chance to get these customers instead of 50, 51.
[00:13:03.800] - Torsten
Big thing if you join companies. Also from our own experience, previous experience, if you join companies then we bring together two cultures. Right. How did that work out for people and let's say already a growing company in Berlin, did that work all right or did you take special measures to integrate those two cultures and ways of thinking?
[00:13:34.470] - Steffen
I only can tell for myself. So for me it was really easy because just when we were at the company subject for the first time, it feels like we're getting into the closed circle on the first step. So I remember that sitting in the big meeting room and then I think Konrad was it that he introduced ourselves. Everybody came up to us and asking what you are doing and very interested and so it feels like we were part of the company from the first 2nd on. So it was not really hard to get into this thing and also we are on the same level of age. The culture feels very natural and was pretty easy actually.
[00:14:25.110] - Konrad
We also took our time to do that. So as Stefan just explained, it totally makes sense to measure companies. But I can also remember that Stefan and Yoda, as we call them, they just came once a week, then they came twice a week, then they took a little bit of responsibility. They were slightly on our payroll so it was like a natural process of merging together. At the very end there was a legal merger and this process took place within maybe one and a half years. So we always had the chance to back up. We have both sides but there was no chance that we were able to back up because it totally makes sense not just on the skill set level but also on the personal level.
[00:15:07.000] - Torsten
Yeah, super cool. Yeah. So let's talk a bit about Solytic. The service you are providing, why is it important? What do you bring? What problem are you solving for in the renewal space?
[00:15:27.930] - Konrad
So today and this is just a rough estimation. I think we have around 25 million PV assets all over the world.
[00:15:37.990] - Torsten
These are small and large power plants like on a private household or a gigantic solar power plant?
[00:15:44.740] - Konrad
Everything, photovoltaic everything. So it can be a huge park in Egypt waiting two days to walk out of. But it can also be like a medium sized park next to the highway. It can be a small installation on a rooftop from a house. So everything should be somewhere around 25 million. And as we all know, climate change is happening. So we need to scale that up to at least 1 billion by 2050.
[00:16:18.450] - Torsten
Power plants, solar power plants?
[00:16:23.230] - Konrad
This is just solar, not wind. Solar is becoming already the cheapest source of electricity in history. So it makes sense to install it. So now we're in the face of really scaling that up in Germany should have around of this 25 million, I think maybe like two point something million. So Germany is already an old market that passed the 2 million threshold. So there are quite a few companies out there who are making sure that we get there to the 1 billion in the next 30 years. Like companies like Empire Solar, Sunrun in America, super great companies installing PV on every roof and every green spot they can find. But it's not just about building it, but it's also about taking care of the performance throughout the 25 years of each PV plant. And this is usually done by professionals within the utility scalar segment. That means the huge parks are getting monitored within control rooms from humans and they just take care of it. They have long term contracts for maintenance, cleaning all the services that the big PV plants need during the lifetime. But when we talk about the medium size and small size, so commercial, industrial and residential space, this is more of a responsibility of the owner and they usually don't have the PV experts taking care of the plants at all.
[00:18:02.350] - Konrad
So this process needs to get automated by AI. So that's why we have a software that receives the data from the PV plants from the inverters maybe data loggers, we have a satellite data, we have irradiance data and so on. Also construction plan. So we can build a digital twin, so we know the PDF inside out and put into our portal, digital twin. So we have all these data sources and put this into a monitoring solution. So monitoring means we have an interface where you can see if your PV plant is up or down or if it's burning or whatever it is. So how it's producing, but it's just basically copying exactly the data that we are receiving into graphs. So then we have a second layer which is the analytics layer that tells you where you have jump in.
[00:18:57.490] - Torsten
So for the digital twin, that's cool. Do you also include the technical data of who manufactured the solar module, who's the manufacturer of the inverter, the model type, et cetera and stuff like that?
[00:19:14.340] - Konrad
So one of our USP is that we are only a software company so we don't bring our own hardware, but we are able to connect to any hardware device out there. So it can be a Huawei inverter, it can be an SMA inverter, it can be some kind of other company's data logger. We can connect to it as long as we can send data to a third party like Soluted. So we don't care which hardware it is. We are hardware agnostic, hardware independent.
[00:19:43.150] - Torsten
And then you mentioned the second layer.
[00:19:46.870] - Konrad
So the second layer is after receiving the data, we look for potentials and problems within each system. So the analytics layer and then we have a third layer which is called the marketplace. So once you found potentials and problems, then you also need to offer solutions. So we can tell now it's time for you to clean. So it makes financial sense for you. Now it's time for you to do a warranty extension or maintenance service or whatever it is that brings your PV plan during those 25 years to the maximum performance. And that's the entire process of value chain that we are automating with our software.
[00:20:23.250] - Torsten
Yeah. So if I was a, let's say, company specialized on module cleaning in Egypt, I could do advertising or something like this on your marketplace and say, hey, book me to clean your solar panels?
[00:20:42.850] - Konrad
Yes, exactly. We are focusing currently on Germany because currently we have around 135,000 PV plans. So we say once you reach around 50,000 within one country, then you have a strong enough demand side. So you have lots of PV plants connected and then we open up the supply side. So this is only the case in Germany for now. So let's talk about a German cleaner.
[00:21:05.790] - Konrad
They can come to us or we acquire them, get them as a partner on our platform. And then we just say, hey, we have all these plans. Do you want to offer your services? And then our analytics capabilities trigger the order. So they just tell the owner of the plant. Now it makes sense. These are your offers, why don't you choose they can come in two weeks and just keep your roof.
[00:21:26.850] - Torsten
Yeah, fantastic. So what are the classic issues that can happen in a solar power plant? Someone who is not familiar with solar might ask, why do I need to do monitoring? Why? I thought it's so great. Why should I look at it? Right?
[00:21:42.970] - Steffen
I can tell you a story. So that was within the first solar boom. Everybody was building these mid sites, sites like crazy. But monitoring was not on the top priority. So there were many sites out there which had no monitoring at all. And when we started the company and we get in contact after the solar first with our customers, we actually noticed plenty of sites which had no monitoring. And then you came up to the site of a customer, we did the connection actually by our own. And you look up on the wall and see the inverters and half of the inverters are not running since a year. And the customer doesn't notice because you had these your income that was coming in, and the customer also has no experience but what to expect from their site. So mostly you notice at the end of the year when the income you have on your site is not matching the prognosis that was made at the first place. With this coming up, there are plenty of problems. So there are classic ones with the modules, they could have micro cracks from hailing storms or when a bird drops a stone on top of it or a nut or whatever.
[00:23:07.930] - Steffen
Then inverter can get dirty because there was too many, too much dust and they overheat and they break. They have plenty of problems. Also, electricity problems like the connection cable could be bitten by a mouse or could be not installed perfectly and water driving in. And then you have short circuits. And so there are plenty of problems that could happen to a site. So it's not the same kind of problems like you have with the wind turbines or with a high dynamic system. But yeah, plenty of problems. And to take care of your site, because otherwise, because the site is not instantly going into flames or at a wind turbine, you see that it's not turning anymore. You notice that after a certain period of time, then you already lose money. And actually, this is the problem why you need proper monitoring on sort of side and with your analytics.
[00:24:10.130] - Torsten
Can you already pinpoint possible causes or can you just tell? Well, it's not running good, so you have to send someone there. Can you already help the owner to where to look for the issues?
[00:24:27.310] - Steffen
So we can already tell what's actually wrong in the site. But the way we want to get is to tell the customer that your system is eventually breaking because we see this tendency in temperature, voltage, phase or something. This is the big picture where we want to get, but we can already tell the customer if there's monitoring on site. Okay, this string has a problem, the fan speed has a problem, the temperature has a problem. So we can pretty precisely say what's wrong with the site. So most cases you have to go on site and to do actual electricity measuring to find the problem to fix. But we can give you an idea where to look inside your site.
[00:25:15.160] - Torsten
Okay. To allow such a detailed analysis, you have to hook up. So you have to use lots of cables and connectors and, I don't know, connection boxes to install your sensors. And you need to get the data somehow, right. So is that a lot of work? How much does it increase the capex, or do you provide that as a service, the sensors and the cables, et cetera, that you need to install?
[00:25:46.990] - Steffen
No, this is what Konrad actually mentioned that we don't have our own hardware, so we rely on hardware from different vendors and we tell the customer, it doesn't matter how your system looks like we can connect. It only needs to send our data through some data logger. And there is also a shift, especially in the residential market, that data loggers are now integrated already into the inverter. So you have real Iot systems in a way, and they directly sensitive for us. In the past, it was more like you have to buy a data logger for me to control a solar log and you have to install it. But there is also an internal communication line called Motors in almost every solar plant, even in the very old ones where you can connect the data logger, too.
[00:26:37.480] - Torsten
All right, so basically there's a standard connection to the Internet of almost all electrical devices in such a power plan, you just use this data?
[00:26:48.640] - Konrad
Yeah, exactly. So you don't have to buy new hardware when you want to use our software. So we just take whatever you have and just connect it with our cloud.
[00:26:57.850] - Torsten
So your business model, that's what software as a service or what's your business model?
[00:27:16.050] - Konrad
So the first two layers, monitoring, analytics. This is a model. Software as a service, also signing long term contracts. Because our customers want to have stability, they usually sign for up to five years and the marketplace layer is more of a transaction model. So whenever somebody books a service, for example, cleaning, then we get a cut of the pie.
[00:27:41.120] - Torsten
So you're in the sweet spot of recurring revenue. Super nice planning. Once you sign a deal and you know, this is what we're going to get for the next five years. Exactly.
[00:27:52.910] - Konrad
So right now we have around 70% of our annual revenues recurring. So that's quite strong for those company, but it's not only 70%, but also we have a total contractual value sign. So whatever, we sign it's for the next five years. So that's quite attracting for a business case.
[00:28:13.530] - Torsten
Excellent. So how many people are there now in at Solytic?
[00:28:20.850] - Konrad
So right now we are 35. Most of them are Berlin based, but due to Corona, everybody is doing home office at the moment. So the office is actually pretty empty. And we are going for series B in the next six to nine months. Serious B finance.
[00:28:38.490] - Konrad
Are you going to acquire more capital the next financing round?
[00:28:43.570] - Konrad
Exactly. We already had two. So now we're going to round three, and then we want to scale up our team a little more.
[00:28:51.910] - Torsten
So are you actually going to come back to the office or do you enjoy the home office video conferencing?
[00:28:59.830] - Steffen
Yeah, it's a bit mixed. We are in a big office room in Berlin and so, you know, there is conflict potential, so developers need to concentrate, sales doing a lot of phone calls. There are people who are enjoying that they are at home and can really focus on. But what we also noticed we need you to see in our faces again. So we need to meet in the office again to get into contact, to get these talks on the floor at the coffee machine. So because there are people in the company actually I didn't talk to a very long time, but I did before because there's some guy who is always the first in the office and you spend some time in talking with him and you get an idea what is marketplace doing, what is sales doing. And you also get, if there are problems, if anybody in the company is frustrated, you can get to him and talk with him. And these are the things you are missing if you're in a home office. But there are also some kind of comfortable situations like developers sitting they don't need to drive around with the underground railroad in Berlin or driving 1 hour with the bicycle.
[00:30:19.930] - Steffen
So this is private time you already spare. But during Corona, you cannot do much as sitting around at home. But yeah, I think we will get in the office soon and to socialize again. And this is very important.
[00:30:36.130] - Torsten
Are you going to keep some level of home office? Do you think you will keep that or would you say, well you have to come back to the office, show up?
[00:30:46.620] - Steffen
I think it will be a flexible way around. So there are people who really want to stay on the office almost full time. We will get people back into the company to do this event like meetings and so on, to see each other again. But we will find somehow flexible way to allow people. We already had this before Corona. So home office is nothing new to us. It's not like we are one of these companies say no, we have to be in the office full time and we don't trust you something. We already have a flexible way of home office and we will continue it in any way in the future.
[00:31:27.610] - Torsten
Yeah. I mean, Konrad, you've got to do your experience with the building companies, but Steffen you as well. So maybe someone is listening now and he's also thinking of starting a company. What's the biggest learning you made over the years, the biggest mistakes you did and the best things. What would you recommend? How to evolve, how to run a company, to start up a company efficiently.
[00:32:00.170] - Steffen
The first thing I can relate is to hear from people who already did this because I remember one thing very like it was yesterday I took over the office when I founded the first company from another company. It was a guy who actually had an IT company and was going into a retirement. And I had to talk with him and he told me suddenly on the first three years will be tough and I think to myself, yeah, come on, it's an old thing, everybody told you. And actually it was like this. The first time is pretty hard. You have to find your way, your sweet spot in the market. And so it's a tough time, especially in the start, but you get rewarded from time to time and in a way that it really keeps the fund level up.
[00:32:53.370] - Torsten
What was tough for you? What is tough?
[00:32:57.990] - Steffen
Yeah, especially the first company was not founded in the startup way, like getting a seat, invest and so on. So I have to earn money for myself from the first minute on. And this was pretty tough to find new customer to hold customer to get everything done. So financing everything in a small company, you have to do on your own because you have to spare money. You cannot go to a tax office in the first place because you don't have the money to do this. And this was actually a tough time. So it's a little bit more easy today, like with finding a seat investor, going through these pretty common startup story, which makes it way more easy. So even you have somebody who can give you advice. And these are all things that I missed for myself in the first place when I founded the company on my own. And I think that's a tough time. So if you don't have Seat investor and you have to earn money from the first minute.
[00:34:01.070] - Torsten
So you would really recommend join some sort of network start up network so that you can learn from others. That's it.
[00:34:08.400] - Konrad
That's pretty important.
[00:34:10.090] - Torsten
And from your perspective, except for financing, we'll touch that in a minute. What's the key learning for you now for over the years, what was the biggest mistakes or the biggest trouble you had and the best advice you ever got to run a company, to start up a company?
[00:34:31.150] - Konrad
So for me, the toughest thing was that you need to be able to do seriously everything once you start a company, you need to be as professional as possible in every single Department because you are the Department. Basically, yes, we got a seat funding of 3 million, but we didn't have at least I didn't have a network to just hire people, 20 people from the start. So we had to build this over time. The small team back in the days, we just had to do everything, sales, marketing, product financing, operations, hiring. So everything you need, every skill you need in a company where you start off and that's where you also get good in. But over time you start hiring people and then you have to fire yourself basically from these kind of positions and bring these people on a level if they don't already have it, where they can actually perform. So you have to stop doing everything.
[00:35:35.010] - Torsten
You have to let go, right?
[00:35:36.470] - Konrad
You have to let go. And you also have to accept the learning curve from the other people, making mistakes, learning from them, getting better and so on. And this was quite a challenge for me because there's the same mentality that I had back in the days when working for corporate. I know better, let me do it, get out of my way. But this is something you just have to develop and learn over time to give your people, your team a chance to let them learn. Be a mentor, be a sparring partner and show them the guidance basically, or teach them everything that you have learned in the past. But this is a tough process and at the end of the day our day also has just 24 hours. So if you don't learn that you will lose, you will end up in a burnout, your wife will let you know that you work too much and so on and then your kids will let you know. And this is just not healthy over time, especially in the clean tech industry. I think the startups usually takes slightly longer than the previous and non renewable startups.
[00:36:45.690] - Konrad
So we have a horizontal of five to ten to 15 years where we have certain plants. So you need to be there for the long run anyway. So that was quite a tough learning.
[00:36:59.350] - Steffen
I think that is a very important part too. So don't found just because you want to found. You need to found in the area where you're really enjoying what you are doing because I remember so we have a big customer close on the last year and doing I think three to four weeks. I slept maybe three to 4 hours at night at Max. So no weekend. But it not feel so hard because I really love what I do and I know where we want to get and I'm a developer with all of my heart and so in the back I can say okay, it was pretty cool to build something and to get to this tough time. But if you are just building a company because you want to found in a way and it's not the thing you love, then I think it will be tough to get exactly the time Connor described and to go through all this learning and go these extra mile that you need to go if you're finding a company.
[00:38:03.010] - Torsten
Well excellent. Thanks a lot for sharing. Pretty cool advice. Thank you. So Konrad, you mentioned the funding. So Steffen, you were basically bootstrapping in the beginning but in solitude, but started right off with some seed funding and series A. Now you're going for series B. Can you share some more details? How did you find the seed and series A funding? How did you do that?
[00:38:37.370] - Konrad
Yeah. So back in the days obviously when you want to move into renewables there are quite a few ideas. So you have some kind of ideation phase where you just check out whatever comes to your mind and get informed and see if this market is taking off at some time. That's what you actually do during the validation phase. So you have 15 ideas, then you validate maybe five, and then there's like a winning model at the end. So you just pick one. And we were lucky enough to have the energy utility Button File as a Seat founder investor.
[00:39:11.490] - Torsten
Sorry, how did you find them? Did you just call them and say, hey, I need money?
[00:39:18.710] - Konrad
They were part of the entire process. So they said, hey, renewables is the next big thing. So let's find a couple of founders and a potential team where we can run through these entire phases. So Button File was there from the start because it was their own idea to actually do that. And also my cofounder Johannes broker. We were basically then part of the process. We were the chosen ones who were guiding through the entire process.
[00:39:46.850] - Torsten
How did you learn about Button File is looking for founders. How did you know?
[00:39:55.390] - Konrad
Yeah, just network. They were building up a VCR, and then it's really about, hey, do you know anybody who would be interested in this one who has this kind of skill set and this kind of skill set? And then we were just interviewing, dating, and then it just happened.
[00:40:13.650] - Torsten
Yeah. Excellent. All right, so seed was Button Five, then series A was a wider network of investors, or is it all still Button?
[00:40:25.540] - Konrad
Exactly. So the seed investment, we just had Buttonfall for an investor. And then we had around two years to raise series A, and then we got the other energy utility Ewe from Allenburg. So German one next to the Swedish one in it. And we actually closed series A just really a few weeks before the lockdown. So this was great timing from all sides because I could have imagined that if this would have been a little later, then maybe something else would have happened. So we just had super luck that I think the internal documents were signed in February, so early February, and we announced it later. So this was luck. Sometimes you just need luck. And this is just one example where the timing was just perfect. So then we raised this part and we raised enough money for the next two years, and now the two years are coming to an end slightly. And that's why we're going for series B for some growth funding.
[00:41:38.050] - Torsten
So how come that Ewe and Buttonfall for they are basically competitive, right? Why would they both invest in the same company? What's the business thinking behind that?
[00:41:51.730] - Konrad
That's true. They are competitors on certain levels, but they're also partners on others. So when you take a look at where you're buying your electricity from, it can be Buttonfile or Ewe. That's true. But on other levels, partnering, I think even the current CEO from Ewe used to work for Buttonfall before. Okay, so there's quite some networking going on. But again, both companies, both investors believe in the team, they believed in the vision, they believed in the product. So they wanted to be part of this. And now we are actually talking to quite a few other investors who also want to be part of the journey. So, yes, they are competitors, but at the end, they are actually super great investors and partners from us.
[00:42:37.900] - Torsten
Okay. So they are great partners. What about reporting? How do you interact with EW on buttonfall? What kind of work, what do you need to do to keep them happy? In terms of reporting.
[00:42:54.070] - Konrad
It's actually the usual reporting as any other BC out there. So, yes, the energy utilities, they have a strategic element to the investment.
[00:43:03.230] - Konrad
But at the end of the day, we have a board meeting every two months. They can check our numbers every single day through an online dashboard. We exchange ideas, they buy our product, they integrate our services to their companies. They help us wherever they can. So it's really a partnership on a level.
[00:43:26.710] - Torsten
Cool. So where do you want to take the company so serious? B comes in another, I don't know, 10-20 million or something. And what's next? Where do you want to take it? Global reach, revenue people. What's the plan for them? Let's say next five years? Yes.
[00:43:47.050] - Konrad
So in the last three and a half years, we basically focused most of the time to build our monitoring solution, to provide a very professional hardware independent monitoring solution. And we bootstrapped somehow the analytics and marketplace capabilities. So we have small teams in these two layers. So now with a new investment, we want to build up the teams and the analytics and marketplace and also grow from currently 135,000 plants to more than a million in the next two years to really start scaling our product. So this is basically our plan for the next two years.
[00:44:23.690] - Steffen
And from the technical point, it's like I told earlier, this predictive maintenance. This is a part where we see strong opportunities by using machine learning and AI. So to inform a customer before something happens that you have to take care of the device. Also with big data analytics, you can use things like you can recommend a customer a certain device for the area he lives into because there are devices which are running better in close to sea or close to dryer regions with a lot of heat, with cold regions. So you can analyze all this data that we have over these hundreds of thousands of devices that we are monitoring and give recommendations, what to install, what is the perfect fit, what could happen with the device when you have to take care, how to get more energy out of your system, how to adjust battery. And then if you have modern heating system in your house with a solar panel, how to manage the energy in your inner house system. So there are so many parts that you can actually take care of with analytics. I know this is somehow a buzzword, but in this case it makes real sense because we have.
[00:45:52.770] - Torsten
You're going to have so much valuable data, right. You will know what inverter is good, what inverter runs in what conditions, bad or good. So the feedback for the actual manufacturer is going to be also pretty valuable data, really. Right. So you will know the modules from Trina or Ingley run well in these conditions and not so well in these conditions. So this is a pretty valuable energy we're going to build. Right.
[00:46:28.450] - Steffen
Also, we can help manufacturers with things like we had this case in the past that a manufacturer had a problem with one series of his device and we did some analytics for him with the data, especially told him, okay, the devices which had the problems are in an area with certain conditions and that brings the manufacturer close to OK, I think we have a problem with we need a higher fan speed because the system is overheating or something. And this is insight we can give manufacturers and this is very important for them.
[00:47:07.430] - Torsten
Excellent, really good. What are other top trends in the market? What do you see? I mean like this preventive maintenance that you mentioned. Right. And let's say benchmarking feedback to components, hardware, components, suppliers is pretty cool. What else do you see where solar or renewable space is hitting some technology or business wise? Right.
[00:47:46.790] - Konrad
Since I've been in the startup industry for quite a while, I can see the same patterns that happened back in the days once we had like the first big investments into startups after 2000 and then the first big access in non renewable startups, so City deal, Group, home back in the day and daily deal and so on. So they were pretty much the first ones that got quite a few dollars for the exit and afterwards, like an ecosystem evolved like salondo and so on, they all came up. And this is exactly happening now within renewables. So there's a trend that history is repeating itself now within this renewable sector. So we had the first couple of huge investments into Empire, Solar, Einstein, twice. There are American companies raising more than €300 million. We had the first huge exit here in Europe which was zoning. So the battery OEM, they accepted two shell. So this was the first one on our radar that was actually worth mentioning. So whatever happened back in the day to the other startup industry is now happening within the renewable as well. So more money is getting into investments, the exits are getting better.
[00:49:13.730] - Konrad
And that's why this entire branch is actually evolving. So that's one clear trend we can see.
[00:49:23.610] - Steffen
From a technical part which is really interesting. I think what I saw over the last years is that when I started you have to do very close calculation for every module you place on your roof or on the field to see if because the high price, if it's efficient or not. And today we're in a situation that solar cells are so cheap that if you have space on your roof, you just place it. If it's half shadowed over the day, it doesn't matter because they are so cheap. And I know this is something that this evolution we all paid for to develop these devices into this pricing region. But in the end, we had such a huge potential. If you getting the solar modules on maybe half of all the roofs in Germany, you have such a big potential. And I know before 15 years, everybody's told, yeah, we will never have more than two or three percentage of energy coming from solar, and we way over it. And we are way cheaper than ever expected by plenty of people. And this is a great evolution that we've seen over last year. And now you have this opportunity to combine solar, wind, hydrogen and all this system.
[00:50:46.340] - Steffen
And we will have very complex and very cool systems in the future that will help us with this energy transition. And I think maybe in five or in ten years you will be completely able to be off grid in source of power from the main grid. You only will have it as a backup if you have your own house. And this is really interesting and a big opportunity.
[00:51:13.710] - Torsten
You just mentioned hydrogen and of course, storage. Are you also going to move into that direction? Monitoring system for energy storage?
[00:51:23.850] - Steffen
Yeah, we already have this.
[00:51:26.430] - Torsten
Okay.
[00:51:26.930] - Steffen
Yeah, we can monitor battery storage at the moment and then, for example, on the white label portals for manufacturers, for the end customer, we're providing information like how offwhite you are. So what is the percentage of energy you consume by yourself, you put into the grid, how much you're using? So we already get information like about storage and production to the customer. So he can also adjust his energy consumption over the day slightly by using it more efficient by using the potential of a storage. So we're already in this market also since years. So already in power, we started to integrate storage energy storage systems into our monitoring. And this is growing and growing.
[00:52:16.470] - Torsten
Excellent. So let's look, we want to get to renewables. So where do you see the biggest roadblocks? Right. Why can't we use solar and wind and storage? Why can't we roll it out faster than we are actually doing now? Right. Because there's not so much time left and the market is still growing fast, but some say not fast enough. What do you think? What are the roadblocks? What's stopping us from doing it faster? What needs to be done on the business or legal or technical level to make it easier for everybody to use?
[00:53:01.870] - Steffen
Yeah, technically, I think it's the grid, basically. So we need to transport energy and adjust the grid very closely. So we have to build these smart grids that we already started with in Germany. And we need to adjust the energy level from the south to the north, having a big Windpark on the north, producing Hydro energy to bring it to other regions in Germany to fuel chips, cars with it. So we need a very smart grid and we need to actually extend our grid capabilities to manage the level of energy all over Germany. And also we need to extend it into Europe. So there's a huge potential of storing energy in countries like Norway or Finland. They have like these water energy, and we need to transport energy to them if we have in the case we have too much energy so they can fill up their sea level or the water level and then giving us energy back when there's not so much wind and energy sun irradiation in Germany. So we need to open our grid and work together, not only in Germany, in Europe and also worldwide. So this is, I think, one of the important things we have to come over here.
[00:54:34.470] - Torsten
Excellent. So you mentioned that it's also a buzzword, right? Smart grid, right? Do we have now a dumb grid or how is the grid operated these days and where do we need to take it? What is a smart grid?
[00:54:49.150] - Steffen
We have to segment somehow to build regional levels on small village level. For example, in a small village, you have a shared storage of energy and you have your wind turbine. Everybody has solar power on this roof. And you somehow have a small grid inside the village where you're sharing the energy and only if you need to or you have too much, you can go to the bigger level. So like, I think about it like Autobahn level of the energy. So you need to have fast tracks to transport energy on a big scale level. And you need to have these small grids where you adjust the energy. Very smartly. So we don't have a dump grid, but we need to extend our grid and to build to make it capable of transporting so much energy around in Germany, because mostly in the past, our grid is created to use energy, mostly the way it is produced in every big city. You have a big power plant use the energy locally. But we need to adjust this energy.
[00:55:58.550] - Torsten
And I think the frequency and voltage is somehow adjusted like constantly to take care of fluctuations in the energy supply and demand. Is that being done automatically or is it like a guy spinning and turning a wheel to adjust these levels? What's the grid operation look like now? Do you know it's not your cooperative?
[00:56:31.310] - Steffen
I would better coin that is not done manually. So that all these smart techniques. But actually I never looked into such a grid control system. So I can't tell you from details.
[00:56:45.170] - Torsten
You mentioned that situation, right. A region, everybody's got solar and then wind and whatever. Someone's got a big battery. How would you take care of the financial and the commercial part, right. I mean, if I've got a big solar part, I don't use it. I want to of course not give it out for free. There needs to be an automated commercial solution for that. What's your thinking of?
[00:57:14.490] - Steffen
Yeah. Since we're already running out of these EEG feeding tariffs. Yeah. We need to open up this on a market level so that you give energy into the grid when the grid needs it. So everybody needs to be stay dynamic in the future, in the market. So, yeah, hard to say.
[00:57:46.450] - Torsten
I mean, this is something where Solytic could go, right. Because you know the performance, right?
[00:57:51.610] - Steffen
Yes.
[00:57:52.930] - Torsten
I don't know if you know, measure in real time. Basically you need to be have a really close to real time system. Right. To manage supply and demand. And then at, let's say commercial level, how to do the trading between the supplier and the demand side. Right.
[00:58:09.550] - Steffen
So this is something we want to do with the marketplace. So if we have the solar panel connected and we know the consumption of the household, we could already give the customer recommendation. What is the best to use his energy inside his home. So by buying a battery, what is the right battery technology? What is the right vendor on the market to sell your power, your energy. And so this is something we can help by analyzing actual data of the customer.
[00:58:48.070] - Torsten
Okay.
[00:58:49.450] - Steffen
So there are plenty of opportunities. It's not. So you have a fixed plan. It really demands on your energy production, your energy consumption, and the region you are into.
[00:59:02.410] - Torsten
Konrad what are your views on the future of solar and wind. What needs to happen, what are current roadblocks where you think they should be removed to employ to use wind faster?
[00:59:20.340] - Konrad
So I'm not a wind expert, that’s Steffen, because his wife is working in wind.
[00:59:28.730] - Konrad
But I fully agree with Stefan. So I think we have a global problem with the climate crisis. So we need a global solution here. So if we talk about politics, actually, my wife is coming home now. But if you talk about politics, yes, we have to install more and more capacity here in Germany. But if that's not possible for some reason, why don't we just buy a build somewhere where it's possible, an area where humans don't live. Let's talk about Africa or the Sahara or something. I've just seen a picture posted by Elon Musk, I think yesterday even where they have the entire world map and they just have a small square somewhere. And they said if we cover all this small square with solar, we are done. That's all we have to do. And this is the kind of thinking that we need because to convince here in Germany, somebody that now you're getting a wind farm in front of your house. If that's too tricky, we don't have the time to convince this person or we go into Harp politics and say, hey, just live with it and we have to do it or we find somewhere else a place like Northern Africa where they would be happy for this investment.
[01:00:45.110] - Konrad
And of course there are some risks and the distance on, but these are solutions that we have to deliver at some point. So for me it's all about global vision and politics, getting things done because, as you said, we don't have the time to think about it. We have to act.
[01:01:01.850] - Torsten
Excellent. Perfect closing remarks. Guys. Steffen, Konrad was great to have you on the show. Thanks for having us. All. The best for your next series B funding. Yeah. Keep building a company. Sounds fantastic. Thanks a lot. Thanks a lot.
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