Berlin-based Ostrom is closing the year with a fresh €9.3 million cash boost. The startup is on a mission to make transitioning to greener energy use more convenient and affordable.
At the beginning of 2022, we reported that Ostrom, a Berlin-born startup, had raised €4.4 million for its solution helping people switch to greener energy. Now, the startup has picked up new funding and it couldn’t come at a more pertinent time as EUrope’s energy crisis unfolds.
It’s been an interesting year, to say the least, and as temperatures drop across Europe, people are looking to raise the thermostat in their homes – but for the vast majority of households, it’s not an easy choice. With wider geopolitical and socioeconomic conditions at play and the fragility of Europe’s energy supplies exposed, prices have been soaring and the transition to greener, renewable and more independent energy sources couldn’t be more urgent. It’s compounded by a lack of digitization in the industry, leaving plenty of potential savings, both money and energy, on the table for consumers.
This is what Ostrom aims to shake up – founded by young entrepreneurs Matthias Martensen and Karl Villanueva with the belief that transitioning to green energy should not come at the cost of convenience or affordability for consumers.
New funding in the bank
- €9.3 million secured in a Series A round
- This brings total funding to about €14 million
- Backed by Adjacent and Union Square Ventures who join existing investors 468 Capital, J12 Ventures and Übermorgen Ventures.
Matthias Martensen, co-founder at Ostrom: “We always started off with the idea to fundamentally align our incentives with our consumers, to make sure they use as little energy and save as much money as possible. We have started rolling out dynamic pricing tariffs thanks to our collaboration with the grid providers in Germany on smart meter data, providing the basis for our energy management platform. At Ostrom, we are leading this change to further the energy transition!”
Helping households use less energy
Launched in May 2021, Ostrom offers a smart energy management platform that helps consumers control their energy consumption. It launched with a one-fair-price-for-all electricity plan, a fully digital experience and a 100% green energy sourcing approach.
Incentives for traditional energy providers and consumers have historically been at odds, but the current equation whereby more power used equals more revenues, is no longer tenable as Europe’s energy crisis unfolds and the green energy transition gets underway. This dynamic consequently incentivizes these providers to want to get their customers to use more power, resulting in wastefulness and a lack of transparency.
Further, as renewables increase in prevalence, a decentralized grid increases the volatility of supply. At the same time, the electrification wave — with EVs and heat pumps — vastly increases demand. Providing transparency and real-time feedback to customers about their energy usage is paramount to helping avert another energy crisis in the future.
Ostrom offers an electricity-at-cost business model, with just a flat monthly fee. This aligns the incentives for the company, consumers and the climate — creating a trusted brand in an industry plagued by mistrust and a refreshing take on things.
Nico Wittenborn, Investor at Adjacent: “The fact that energy providers today make their margins through a markup on energy is not aligned with the consumers’ (nor our climate’s) interest of reducing consumption. Ostrom solves this with a more aligned business model that sells energy at cost and enables a more sustainable future. I am very happy to support the team on that mission.”
The startup has continued to grow this year, reflecting just how important and needed such an approach has been. Available across Germany, Ostrom now has customers in over 1,500 cities and towns and has won clients from over 400 other energy suppliers — firmly placing Ostrom among the top 10% of energy providers in the country.
Nick Grossman, General Partner at Union Square Ventures: “Ostrom’s electricity-at-cost model structurally aligns the company with its customers, incentivizing all to reduce energy consumption. Furthermore, the beautiful, easy-to-use app paired with renewable energy sources makes it easy to optimize energy usage. We are thrilled to support the company in its next phase of growth.”
The new funding will be used to broaden its offering, including smart meter support, real-time dynamic pricing tariffs, electric vehicle (EV) charging, heat pump optimization and more. In addition, the startup aims to at least double the current team in the next two years with a strong focus on product and tech.
Karl Villanueva, co-founder at Ostrom: “We are seeing how our business model, our app, all our in-house automations and the platform built by our amazing team provide the foundation to help our customers save more energy. While others still think like old-school utilities, we have always thought of Ostrom as an experience. So far, we have created a brand that our customers truly love and trust. We have a ton of ideas on our roadmap and we can’t wait to roll these out to our users!”
The round also extends its angel panel with two more Ostrom advocates — Revent Partner Henrik Grosse Hokamp and serial investor Jonathan Teklu.
Previous angel investors include early-stage investors & Doppelgänger TechTalk Podcast hosts Philip Klöckner and Philipp Glöckler, Dance and SoundCloud co-founders Eric Quidenus-Wahlforss and Alexander Ljung, Gorillas co-founder Jörg Kattner, HelloFresh Global CMO Maximilian Backhaus, Konfetti founder Tobi Fezer, Tourlane co-founder & CEO Julian Weselek, fintech Moss founders Ante Spittler, Anton Rummel, Ferdinand Meyer & Stephan Haslebacher, GoTiger co-founder Yang Zou, NFQ and Alaiko Founder Harald Braunstein, Home-to-Go Founder Patrick Andrä, venture studio MVP Factory, early-stage investor Shio Capital, impact investor Friedrich Neuman, and influencer and entrepreneur Diana Zur Löwen.