Sifted - Terra One, backed by N26 cofounder, secures €150m

Terra One's backers include N26 cofounder Maximilian Thayenthal

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Berlin-based startup Terra One has raised €150m from asset manager Aviva Investors to finance its grid-scale battery storage facilities.

Terra One was founded in 2022 by cofounders Thomas Antonioli, the former CFO of electronic rentals unicorn Grover and Tony Schumacher, previously at seed investor Teclead Ventures.

The company raised a $7.5m seed round in April last year from investors including PT1, Commerzbank, 468 Capital, N26 cofounder Maximilian Tayenthal as well as the scout funds of Andreessen Horowitz and Hedosophia.

Terra One buys batteries from companies like CATL or Tesla and then plugs them into the grid. It purchases energy from the European Energy Exchange (EEX) when it’s cheapest — in the middle of the day and at night time — and stores it, before selling the energy back to the grid when the proportion of renewable energy is low and the price is higher.

As well as building battery sites, the company is developing software that allows it to predict energy prices across Europe and make the most lucrative trades.  

“It's very important that it has high returns because, to help make renewable energy available 24/7 we have to pull in a lot of institutional capital to build all those assets,” says Schumacher. “We have to show investors that there's a high, attractive return profile in the market.”

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Non-dilutive financing

Terra One’s new funding is mezzanine financing — meaning it sits between senior debt and equity in the capital structure. When the company starts a new battery site, it combines financing from banks with equity or funds from the mezzanine financing.

Companies building infrastructure tend to look to debt financing or similar instruments so the founders and equity investors aren’t overly diluted by the large capital the projects require.

Terra One is part of a cohort of companies building batteries to store renewable energy. As we transition to a greener grid, the ability to store energy for times when the wind’s not blowing and the sun’s not shining, becomes more important.

Other companies working on storage batteries include UK startup Field, which raised £200m in 2023 from Plural and LocalGlobe, and Swedish startup Ingrid Capacity, which secured $100m last year from Singapore-based BW ESS.