„The E-Mobility Market is Poised for a Resurgence Next Year“

Start-up-interview with Felix Krause, managing partner of Vireo Ventures

What trends in start-ups are currently emerging?

Right now, battery storage is already evolving rapidly. We are seeing more and more start-ups that implement battery storage projects. Others focus on the management and handling of battery storage systems – they monitor their functional status and optimize their operation.

Vireo Ventures has also identified cybersecurity for distributed assets as a key area of interest. The current lack of attention to this issue means that there are not many start ups in this field yet. In the e-mobility sector, the momentum of start-ups has waned due to a decline in electric vehicle registrations – especially in Germany – and the struggle of many existing start-ups to gain a foothold in the market. However, we expect a rebound in the next two years.

The PV home systems segment will most likely continue to see a lot of change in 2025. The market will continue to undergo major shifts and reorganizations, and some players will disappear. But we expect this market to recover in the long term, because the combination of solar installations, electric vehicles, heat pumps and/or storage systems will remain relevant in the future. We foresee a strong expansion – provided that interest rates drop and confidence in solar energy is restored.

Does this mean that you are expecting to see a lot of start ups in these areas? Or do you already see a lot of start-ups developing ideas in these areas?

Right now, battery storage is already evolving rapidly. We are seeing more and more start-ups that implement battery storage projects. Others focus on the management and handling of battery storage systems – they monitor their functional status and optimize their operation.

Vireo Ventures has also identified cybersecurity for distributed assets as a key area of interest. The current lack of attention to this issue means that there are not many start ups in this field yet. In the e-mobility sector, the momentum of start-ups has waned due to a decline in electric vehicle registrations – especially in Germany – and the struggle of many existing start-ups to gain a foothold in the market. However, we expect a rebound in the next two years.

The PV home systems segment will most likely continue to see a lot of change in 2025. The market will continue to undergo major shifts and reorganizations, and some players will disappear. But we expect this market to recover in the long term, because the combination of solar installations, electric vehicles, heat pumps and/or storage systems will remain relevant in the future. We foresee a strong expansion – provided that interest rates drop and confidence in solar energy is restored.

Are the start-ups that are currently entering the market introducing any groundbreaking and disruptive ideas, or are they primarily focused on improving and refining existing ideas or products?

Thanks to artificial intelligence, we are seeing an acceleration in the speed of development. Developments that used to take years are now possible in a very short time and with much smaller teams. It no longer takes 20 or 30 developers, and much smaller teams and less capital can achieve more. So we are already starting to see huge progress. Has anyone reinvented the wheel? Not really. But the way companies find solutions has fundamentally changed. The same goes for the way they approach customers. The difference between what software can control today compared to what software could control five years ago is enormous.

What does it take for a start-up to succeed in these times?

Most start-ups fail not because of their technology or their market, but because of their sales. It is important to really listen: What are the specific pain points of a particular customer group? And to question their own solution: Has a problem really been identified? Have they understood what kind of solution the customer has mind? It’s not about what they think is the best solution for their customer – it’s about the solution the customer looking for. Does their product have the potential to solve the customer’s problem?

One of the issues we continue to see is that technical founders, in particular, are so infatuated with their product that they present its features rather than the solution it offers. When you get in a car, you do not care how the engine works or what material the tires are made of, you just want to get from A to B. You may want the car to be warm, to have a comfortable seat and to listen to music, but you are not interested in what is happening under the bonnet. Founders must learn to abstract their product’s features.

What financing conditions are cleantech start-ups facing?

In general, the venture capital market has struggled over the last two years. The cleantech segment outperformed the market, but the market conditions were not optimal. The current decline in interest rates has been positive. There is more capital available now. It is also worth noting that exit markets have improved, which is important because start-ups financed by venture capital eventually have to be sold. A big exit market are stock markets. Going public, such as in the case of payment service provider Klarna, can send a powerful signal to others if it works out. A successful flotation will encourage many other start-ups to go public. What’s more, the appetite among large companies for buying start-ups has been growing. Both of these developments are good for the ecosystem as a whole because they allow capital to flow into new start-ups.