Energy Supply: A Driving Force in Technology Evolution
The issue of energy supply has become a major factor in shaping the way technology evolves over time. While this challenge may seem most relevant to everyday gadgets like mobile phones and electric vehicles, it extends far beyond consumer tech. In fact, one startup is using innovative software to tackle this problem on an enterprise level. Meet Instagrid, a company revolutionizing the world of portable chargers for businesses. With a flagship product called “One,” the startup has already sold 30,000 units and experienced a rapid 100% annual growth. Now, to power up its ambitious growth strategy, Instagrid has announced a staggering $95 million Series C funding round.
“In the world of rechargeable batteries, lithium ion continues to dominate the market,” explains Andreas Sedlmayr, co-founder and co-CEO of Instagrid, in an interview. “While improvements have been made in terms of cost, energy density, and power, there are still limitations that need to be addressed.” To overcome these limitations, Sedlmayr and his team have taken a unique approach: “We’ve written about 500,000 lines of software code to optimize the energy output of our battery. This allowed us to convert a hardware problem into a software solution.”
Currently, Instagrid’s battery weighs 20kg and measures just 42x21x42cm, making it highly portable. What’s more, it can be fully recharged within a few hours using a standard electrical socket. This impressive feat is made possible by the company’s cutting-edge software, which boosts the battery’s efficiency.
The latest funding round is led by Teachers’ Venture Growth (TVG), the later-stage investing arm of the Ontario Teachers’ Pension Plan. Morgan Stanley Investment Management’s (MSIM) 1GT climate private equity strategy, along with previous investors Energy Impact Partners, SET Ventures, blueworld.group, Hightech Gründerfonds, and Pierre-Pascal Urbon (who chairs Instagrid’s advisory board) also participated in the round.
Based in Stuttgart, Germany, Instagrid was founded in 2018 and has raised about $55 million in previous funding rounds. The current round values the startup at an impressive $400 million to $500 million.
The company is co-founded and co-led by Sedlmayr and Sebastian Berning, both of whom have PhDs in material science. They previously worked at Bosch, where they saw firsthand the challenges of battery technology in powering various devices used by people on the go. “But Sebastian and I are entrepreneurs at heart, so we decided to take the leap and build something from scratch to tackle this problem,” says Sedlmayr.
Instagrid’s focus on enterprise scenarios has emerged from their previous experiences. The startup caters to industrial customers, utility providers, medical and emergency services, and media companies. With its former employer and several others in the market, the company is not directly competing in the management of batteries within devices. Instead, it targets generators that recharge electrical machinery when mains electricity is unavailable.
“In fact, I’m talking to you from Las Vegas right now, where I am attending a conference for the concrete industry,” says Sedlmayr. This highlights the startup’s target user base and the region where it is currently focusing its business development.
One of the main issues Instagrid is addressing is the environmental impact of legacy generators. These generators are expensive, loud, and harmful to the environment, making organizations seek alternative solutions for powering their operations.
There are currently thousands of existing legacy generators in use worldwide, with about 50 million combustible engines in the market. One market study has also found around 11,000 fuel-powered generators in use by humanitarian aid organizations alone.
“According to our conservative estimates, humanitarian agencies spend over $100 million annually on fuel and emit nearly 200,000 tonnes of CO2,” the study states. It also suggests another alternative for powering these generators: solar energy systems, which is another option available in the market that Instagrid could potentially adopt.
In addition to the environmental aspect, Instagrid also addresses the issue of controlability. As “dumb” machines that simply require filling up and running, these generators can be challenging to manage and control. With Instagrid’s software, organizations can easily monitor their batteries remotely and understand where power is needed, where it can be shut down, and how much power is left.
TVG, a tech investor, was particularly drawn to Instagrid’s unique software approach. “We were impressed by Instagrid’s use of software to improve battery performance. After discussing their technology with other companies in our portfolio, we recognized the need for a portable battery solution for professional use,” says Avid Larizadeh-Duggan, European MD at TVG. “Through our real estate and infrastructure investments, we realized that thousands of generators are being used in the field, and these come with major drawbacks in terms of cost, safety, and environmental impact. Instagrid solves this problem through its proprietary power electronics and software, which ensure unparalleled peak power to power anything with a plug.”
With the increasing reliance on software and cloud access, the future of battery development and improvement seems promising. For instance, research at a university in the UK has found a way to better understand the health of batteries in portable devices, potentially leading to even more efficient solutions.
However, this also brings about potential risks, such as hacking and security breaches. Sedlmayr assures that Instagrid has robust security measures in place and has not experienced any hacking attempts so far. But with its growth, the threat could potentially increase, making it a crucial aspect to address in the future.
Larizadeh-Duggan also outlines areas of opportunity for Instagrid, including developing more accessories to enhance monitoring in the cloud, such as tracking emissions and energy usage analytics. The company also aims to improve its energy management algorithms, specifically focusing on “three-phase power and uninterruptable power supply for specialized use cases.” Moreover, additional hardware developments are also on the horizon.
While the current focus is on lithium ion batteries, Sedlmayr states that the company is open to working with other battery designs as they emerge, as Instagrid is “material agnostic.”
