The rise of 1Komma5Grad: “Big Oil has no place at our table”

No climate company has ever achieved unicorn status as quickly as 1Komma5Grad by Philipp Schröder. In an interview, the founder explains how his cleantech startup is accelerating the energy transition, what he thinks of the climate stickers and why Shell didn’t have a chance as an investor. Just 23 months after it was founded, 1Komma5Grad recently achieved unicorn status. Isn’t that a bit too fast?

Philipp Schröder: We’re going very fast, that’s true. No other cleantech startup has become a unicorn in such a short time as we have. The high rating also overwhelms us from time to time. What sets us apart from the competition: behind our business model there is already a profitable craft business. We combine craftsmanship and high-tech. We bring international craft businesses into the group and implement our software. This makes the operations even more efficient and cost-effective.

Would your startup have become so successful so quickly without the energy crisis?

Climate-friendly technology has done it to Philipp Schröder. Philipp Schröder founded the battery storage specialist Sonnen at the age of 28. Two years later, Elon Musk made him head of Tesla in Germany. Now he wants to accelerate the energy transition with 1point 5 degrees.

(Photo: Christoph Neumann)

On the one hand, the war in Ukraine and the resulting increase in customer demand definitely accelerated market development by five years. On the other hand, the interventions in the energy market have not only unsettled many people, but have also put pressure on a solid and commercially viable sector. The market has suffered as a result of regulation and political intervention. Fortunately, electricity prices have now normalized again. Because we want to calmly develop economic solutions that are better in the long term than oil and gas heating.

The last round of financing is said to have been heavily oversubscribed. A number of investors received a rejection. Among them Shell. Why didn’t Shell qualify as an investor?

Our vision is that everyone can live CO2-neutral. Big Oil has no place at our table. To me, fossil fuel companies’ interest in cleantech startups is implausible and even damaging. If we ever take oil money, it will only be out of a real emergency and because it is unavoidable.

What happens to the investors’ money?

With our lead investor in the financing round, G2VP, we have gained one of the most renowned US technology investors. The round enables us to invest a high double-digit million amount in our new development laboratory for climate technology in Berlin and our team and thus further expand our software capacities for our energy IoT system Heartbeat in the areas of energy management, device connection and networking into a virtual power plant .

Your startup offers an all-round solution from a single source. However, it costs around 50,000 euros. Only a fraction can afford that, right?

I can understand that for many people 50,000 euros is a lot of money. However, we claim that the running costs including financing are always cheaper than the status quo. This applies to both photovoltaics and heat pumps. With networking in the electricity market, we are sustainably reducing operating costs. If the all-in-one solution exceeds the financial capabilities of our customers, we always recommend alternative solutions and look at: where can we start?

What could a beginning look like?

Many customers start with a solar system. With our Heartbeat energy manager, it produces electricity at seven cents per kilowatt hour. In any case, financing this is cheaper than simply continuing to draw electricity from the socket. Who doesn’t want to purchase CO2-free electricity at such a low fixed price over the next 25 years? We give the guarantee. For me, the purchase of a solar system is an absolute no-brainer.

How expensive is a heat pump?

A heat pump costs between 20,000 and 30,000 euros to purchase. But the highlight is: With our Heartbeat energy manager, we control our heat pumps in such a way that they switch on when the electricity price is negative. Just last Sunday, the electricity price was minus 0.50 cents. That means customers could have left their heat pump or even the air conditioner running and even made money doing it.

In order to do justice to advice and service, 1Komma5Grad buys from craft companies. Why do companies sacrifice their independence? Your business is booming anyway?

The companies are not only fascinated by our strategy, they are also convinced of it. We are united by the assumption that it makes no sense to sell components individually. The companies that join us become co-owners. This means that these companies exchange the problems that a medium-sized company brings with it for a reinvestment in our company, which has the chance to build a real European champion that also changes the energy world in the long term.

How many craft businesses has 1Komma5Grad taken over and how much has been invested in the takeovers so far?

So far we have taken over almost 30 companies worldwide. Some of these have hundreds of employees. We do not comment on how much money we have invested in these companies. What I can say, however, is that half of the purchase price is linked to reinvestments. And the re-investment is in turn linked to the companies remaining in the group for three years. We have no interest in entrepreneurs who want to get rid of their companies. Rather, we are looking for entrepreneurial talent who will help us to achieve our mission.

The first green unicorn Enpal offers solar systems for rent – for a smaller thaler. Why should customers still choose you?

Enpal acts primarily as a financing service provider. In the end, the startup is more of a bank and a proptech. For them, craftsmanship is just a necessary evil. That’s not our approach. Our focus is on craftsmanship, fulfillment and logistics right up to the last mile, including digital networking of the systems to form a virtual power plant and service. In this respect, Enpal and 1Komma5Grad are surprisingly dissimilar. But we are compared because we are the only two unicorns in the cleantech space. We believe that quality is becoming more and more important to customers and that they therefore want to rely on a partner who is credible. We install, we do the service and then we help you to reduce your costs with our software. For CO2 neutrality at home. And whether you finance it with a bank, whether you pay the cash, that is secondary for us.

How realistic is the 1.5 degree target anyway?

Our philosophy is: Change what you can change and don’t babble about things. We help people and owners to take responsibility. That means that the 1.5 degree target represents a tipping point that is so dangerous that it makes me nauseous. The malice that comes with the thought ‘We can’t do that anyway’ is just sad. With our name 1Komma5Grad we want to get out of this political discussion and help our customers to meet their 1.5 degree target. Don’t stick, just do it.

Speaking of sticking. What do you think of the climate stickers?

It’s always hard to make blanket judgments about a group of people. For me personally, however, I can say that they do not serve the cause. As a member of the CDU and a member of the Climate Union, I think there are better things to do than sticking to the streets. For example, you can help out in the trades or get involved with companies that work on technology. Climate adhesives only do one thing: They help polarization. We must work to ensure that everyone understands that living carbon neutral is simply better. And for that it has to be cheaper and better and more convenient.

So far, an IPO is planned for 2024 or 2025. How are the plans?

We are aiming for an IPO because we would like our customers to become owners too. We can’t say exactly when the right time is. We think it might be sooner than some are realizing. Of course, it also depends on the capital market environment.

Juliane Kipper spoke to Philipp Schröder

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