Climate startup on a drip
Will Efficient Energy still find an investor?
8/8/2023 5:59 p.m
Many investors are holding back their money. The climate startup Efficient Energy is also feeling the effects. The company only has a few weeks to find a new investor. Climate-friendly technologies are politically desirable.
A start-up with climate-friendly technology is looking for an investor to save it: According to insolvency administrator Matthias Hofmann, the refrigeration machine manufacturer Efficient Energy from Feldkirchen in Upper Bavaria has just a few weeks to find a new investor. “Efficient Energy is a startup that is still dependent on financing in the current phase,” says the lawyer. The case illustrates the difficulties that young companies have in finding investors.
Efficient Energy has developed a chiller called “eChiller” that uses water as a refrigerant instead of fluorinated gases. “There are only 50 liters of water in our systems,” says Managing Director Georg Dietrich. “Compared to conventional technologies, we save up to 80 percent of the energy.” Reference customers include Siemens, British Telecom and the German Aerospace Center. 190 systems are in use.
The company, which was founded in 2006 and has 90 employees, was funded in the past by the German Federal Environmental Foundation and the Bavarian Ministry of Economic Affairs. The management filed for insolvency very early on, says insolvency administrator Hofmann. “In this way we can fully utilize the three-month period in which the Federal Agency supports the personnel costs with insolvency money. But in fact we don’t have more than these three months of June, July and August.”
Investments in climate start-ups are falling
Climate-friendly technologies are politically desirable: The EU wants to make Europe the “first climate-neutral continent”, if possible with domestic technology. Refrigeration technology that does not require fluorinated gases should actually be booming in the coming years: In its F-gas regulation, the EU stipulates that sales volumes in Europe should fall by 80 percent by 2030 compared to 2014.
“95 percent of all refrigeration machines in refrigeration technology are now operated with fluorinated gases,” says Dietrich. “These are products from the chemical industry that are very harmful to the climate. When they get into the atmosphere, some are thousands of times more harmful than CO2.” The refrigeration industry is estimated to be responsible for about seven percent of greenhouse gas emissions, about twice as much as global air traffic. “At the University of Passau, we cool the data center and recycle the waste heat to heat the building or service water.”
According to a report by the US industry service “Climatetech VC”, venture capitalists worldwide reduced their investments in climate start-ups by 40 percent year-on-year in the first half of the year: from 19 billion to 12 billion dollars. One consequence is bankruptcies. In May, for example, the Clevershuttle driving service based in Berlin filed for bankruptcy. The company arranges emission-free rides with shared electric taxis. Operations continue. The Thuringian startup Jenabatteries, which developed innovative battery storage systems without using rare raw materials, is also insolvent.
“Money is no longer easy for venture capital investors”
However, the reluctance is currently affecting all areas of the startup scene: from agrotechnology to delivery services. In a recently published survey by the digital association Bitkom, only 17 percent of start-ups with a current need for money reported that financing for the next two years was secured. “We had two major anchor investors and were well advanced in talks with a strategic industrial partner,” says Managing Director Dietrich. “These talks broke down at the very last meter, which came as a surprise to all of us.”
Startups looking for follow-up or refinancing are under a lot of pressure, says insolvency administrator Hofmann. “The money is no longer so loose with venture capital investors and in the private equity sector.” The law firm found a very good situation at Efficient Energy. “The technology is well received in Germany and Europe and has global potential.” According to Managing Director Dietrich, over 20 interested parties have contacted Efficient Energy in the past few months. “With five we are now in very intensive talks,” says the manager. “These are strategic investors from industry on the one hand and financial investors on the other.” These talks are not over.