An interview with Jan Palasinski, Investment Partner at Future Energy Ventures - The venture capital platform that is shaping the future energy landscape in the European market
This year, German energy companies E.ON and innogy merged their venture capital teams and portfolios under a new venture arm called Future Energy Ventures. The new entity's mission is to identify, fund, and mentor some of the most exciting start-ups in the future energy sector.
innogy Ventures, now Future Energy Ventures, was one of the investors that helped eSmart Systems raise 34,4 million USD of capital in 2019. As an owner, they have provided valuable support and have played a vital role in eSmart Systems’ expansion in the European market.
We sat down with Jan Palasinski, Investment Partner at Future Energy Ventures and member of the Board of Directors at eSmart Systems, to talk about Future Energy Ventures goals as a new entity, their investment strategies, and their relationship with eSmart Systems.
Can you start by telling us about Future Energy Ventures, what it does, and what are your focus areas at the moment?
Future Energy Ventures is the venture capital and collaboration platform of E.ON. As a newly launched organization, we focus on helping our existing portfolio companies find new business opportunities and scale with our mother company E.ON. Given that a share of our combined portfolio is exposed for the first time to E.ON, we want to make sure their solutions reach the Business Units.
Aside from growing our existing portfolio, we are also actively scouting the market for start-ups developing digital and digitally-enabled technologies and business models that have the potential to redefine the future energy landscape. We focus on digital, scalable, and asset-light companies seeking Series A and beyond funding.
Our goal is to capitalize on the investment opportunities presented by the transition to this new energy future and maximize scaling opportunities for our portfolio.
Earlier this year, the merger between E.ON and innogy was completed. Why did integrating E.ON and innogy as one entity make sense?
Following E.ON’s acquisition of innogy, the two venture businesses have now been fully integrated into one operating structure. This is an extremely exciting development. Not only does the integration makes E.ON one of Europe’s largest operators of energy networks, energy-related infrastructure, and innovative customer solutions, but E.ON and innogy share the same vision for the future of energy.
Aside from its core operational activities, innogy’s venturing activities were also combined with E.ON’s to create a brand new entity that continues to identify, fund, and mentor some of the most exciting start-ups in the future energy sector. This entity is Future Energy Ventures.
We at Future Energy Ventures, share a common vision and approach to investing and help growing the start-ups solutions for a more digital, decarbonized, and democratized energy system. We believe that businesses need more than just money to succeed. They need collaboration, mentoring, and the opportunity to partner with other organizations that can help accelerate their growth trajectory and build their business.
We build on the foundations laid by the teams from both E.ON and innogy and the more than 60 portfolio companies we have worked with and invested in over 10 years. We reinvented ourselves to be more visionary, more connected and more impactful.
Why did Future Energy Ventures invest in eSmart Systems, and how does eSmart fit with your strategy?
My colleagues invested in eSmart Systems mainly because of its innovative approach to grid asset management and maintenance. eSmart’s technology fits perfectly into E.ON’s energy networks business, as it helps to prolong asset life and to increase operational and capital efficiency.
eSmart Systems' AI and digital capabilities are paired with a profound knowledge of the energy industry. This is a perfect match for our investment hypothesis to invest in startups that support the digital transformation of the energy system. eSmart’s main product, Grid Vision, which automates grid asset inspections, is the perfect example of how machine learning can reduce maintenance costs while also increasing its quality.
Since I have joined eSmart’s board of Directors I have also been impressed by the experienced management team and the traction they had already established with their global customer base, as well as with prestigious international co-investors.
How do you give growth support to your investments and eSmart Systems in particular?
Future Energy Ventures’ investment team is in constant exchange with all E.ON’s business units, in a dialogue that aims at capturing their most pressing problems and at proposing innovative solutions coming from the startup world. We typically start our match-making activities between startups and business units even before investing, to make sure that the expectations of both parties will be met during our journey together.
In the specific case with eSmart Systems, the collaboration started already back in 2019 when innogy Ventures, now Future Energy Ventures, made an investment and linked the start-up with two of our DSOs (WestNetz & MitNetz). This connection resulted in two very successful PoCs on automated asset inspection.
What role do you see eSmart Systems play in the future energy industry?
eSmart Systems will be one of the leading AI-driven software providers for the inspection of powerlines, grid maintenance planning, and asset management. The more data will be processed by the eSmart software, the better the quality of the service will become, and thus customer satisfaction.