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Sifted - Former Grover CFO raises $7.5 million to power the grid with Tesla batteries

Sifted - Former Grover CFO raises $7.5 million to power the grid with Tesla batteries

25.4.24, 03:00

Berlin-based startup Terra One has raised $7.5 million in a seed funding round to expand its battery storage systems in Germany. The company uses lithium-ion batteries and AI technology to efficiently store energy and feed it into the grid at optimal times based on demand and energy prices. This strategy addresses the problem of energy loss due to grid congestion and supports the stabilization of the power grid through intelligent energy control.

Berlin-based startup Terra One has secured $7.5 million in seed funding to expand its battery storage systems in Germany.

With increasing electrification, e.g. through heat pumps and electric vehicles, Europe's energy grid is under a lot of pressure. The inefficiency of energy grids means that large amounts of clean energy are often wasted.

In 2023, nineteen terawatt hours of energy - enough to power six million homes - were lost in Germany due to grid congestion. Terra One's solution is to store renewable energy generated during periods of low demand to then feed it into the grid when demand is high.

Instead of making the batteries itself, Terra One buys lithium-ion batteries from companies like Tesla or CATL. The batteries are then placed near a transmission line or substation and connected to the grid via a grid operator, of which there are 800 in Germany.

The company says its innovation lies in its AI model, which analyzes market trends and supply and demand to decide when is the optimal time to charge the battery - both in terms of the energy balance on the grid and the price for customers - and when to discharge it.

PT1, an early-stage VC for real asset technologies, and neosfer, the early-stage investor of Commerzbank, led the round. 468 Capital, N26 co-founder Maximilian Tayenthal, and the scout funds of Andreessen Horowitz and Hedosophia also participated.

Terra One's solution

Founded in 2022, the company buys energy from the European Energy Exchange (EEX) in the middle of the day and at night, when the share of renewable energy is highest. It stores this energy in its batteries, and its AI model finds the optimal time to sell energy back to EEX when the share of renewable energy is low.

The company has 300 projects in the pipeline, most of which are awaiting planning permissions and grid access before they can be developed. Obtaining permits can often be a lengthy process, which Germany is trying to shorten with its battery storage strategy.

Terra One's battery systems generate between 10 and 500 megawatts of clean electricity, according to the company.

"For comparison, the city of Potsdam, with its 100,000 residents just outside Berlin, uses 90 megawatts per hour. So with a battery for 500 megawatts, you could power Potsdam for more than five hours," says Thomas Antonioli, co-founder and CFO of Terra One and former CFO of electronic rental unicorn Grover.

Other battery storage companies in Europe include Field in the UK, which follows a similar model to Terra One by selling power back to the grid but also selling regulatory services to the grids. There are also two big players in Sweden: Polarium, which develops battery storage for companies, and Ingrid Capacity, which builds large-scale energy storage plants.

Future funding

Terra One will use the VC funding to hire engineers and project finance experts, further develop its AI software and eventually expand its infrastructure to different countries.

Infrastructure and pension funds that want to invest directly in batteries will finance the physical hardware, which they can do through a special purpose vehicle set up by Terra One.

The company expects it will not need to raise much more equity to grow the business.

"Batteries are relatively new and more complicated to build and operate than, say, a solar panel," says Antonioli.

"So there are a lot of investors who would love to invest capital (in batteries) but haven't been able to do so until now because there hasn't been access to it. Our goal is to give them that kind of access to invest in batteries.

"VC investors wouldn't be particularly enthusiastic about funding this: they want to invest in the software and the team and the scalable business, but not in some kind of physical asset."

Miriam Partington
Miriam Partington is a reporter at Sifted. She covers the DACH region and the future of work and is co-author of Startup Life, a weekly newsletter about building a startup.

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