Ostrom, a berlin-based business, has raised a total of €13.3 million to far after securing €9.3 million in an investment round. Ostrom raised €4.4 million earlier this year for its program assisting households in switching to renewable energy.
The startup aims to make switching to greener energy use more practical and cheap.
Adjacent and Union Square Ventures, who join current investors 468 Capital, J12 Ventures, and Übermorgen Ventures, are supporting the €9.3 million Series A round.
Two additional Ostrom supporters, Revent Partner Henrik Grosse Hokamp and serial investor Jonathan Teklu join the round’s angel advisory board.
Co-founder of Ostrom Matthias Martensen: “We always started with the goal to fundamentally align our incentives with our consumers, to make sure they use the least amount of energy and spend the least amount of money. Thanks to our collaboration with German grid providers on smart meter data, which served as the foundation for our energy management platform, we were able to launch dynamic pricing rates. We are driving this transformation at Ostrom to speed up the energy transition!
Ostrom, which was founded in May 2021, provides a smart energy management platform that aids consumers in managing their energy use. It debuted with a single fair pricing for all electricity plans, a fully digital user experience, and a policy of sourcing only green energy.
Incentives for traditional energy providers and users have historically been at odds, but as Europe’s energy crisis develops and the shift to green energy progresses, the current equation that states that more power used equals higher income is no longer tenable. Due to this dynamic, these suppliers are motivated to encourage their clients to use more power, which leads to waste and a lack of transparency.
A fragmented grid also raises supply uncertainty at a time when renewable energy sources are becoming more prevalent. At the same time, demand is greatly increased by the electrification wave, which includes EVs and heat pumps. To prevent another energy crisis in the future, it is crucial to give customers real-time feedback about their energy usage.
Ostrom provides a business strategy that charges a single flat monthly fee for electricity. This balances the incentives for the business, customers, and environment, building a trustworthy brand in a field where mistrust is rife and offering a novel perspective.
The fact that energy providers now make their margins through a markup on energy is not in line with consumers’ (or our climate’s) desire in reducing consumption, according to Nico Wittenborn, Investor at Adjacent. With a more in-line business strategy that sells energy at cost and makes possible a more sustainable future, Ostrom finds a way to resolve this. I’m delighted to assist the team with that endeavor.
This year, the startup has continued to expand, demonstrating how crucial and necessary this strategy has been. Ostrom, which is accessible throughout Germany, currently has clients in more than 1,500 cities and towns and has taken business away from more than 400 other energy suppliers, solidifying its position among the top 10% of energy suppliers in the nation.
“Ostrom’s electricity-at-cost strategy structurally aligns the company with its customers, incentivizing all of them to minimize energy consumption,” says Nick Grossman, general partner at Union Square Ventures. Additionally, it is simple to optimize energy use while using the lovely, user-friendly software in conjunction with renewable energy sources. We are happy to help the business in its upcoming phase of expansion.
The additional financing will be used to expand its product line to include real-time dynamic pricing tariffs, support for smart meters, EV charging, heat pump optimization, and other services. The business also plans to focus heavily on product and technology over the next two years, at least doubling the size of the current staff.
“We are seeing how our business model, our app, all of our internal automation, and the platform built by our wonderful team give the foundation to assist our clients to conserve more energy,” says Karl Villanueva, co-founder of Ostrom. We have always conceived of Ostrom as an experience, whereas others continue to think in terms of antiquated utilities. We have so far succeeded in building a brand that our customers genuinely love and trust. We are excited to implement the many ideas on our roadmap for our users!
Image Credit: Ostrom