Having raised €1.25m in venture capital led by BayWa r.e. Energy Ventures, our CEO Mike Rosenberg is interviewed on the energy transition in emerging countries by Venture Capital Magazin, alongside the MD of our lead investor, Greg Zavorotniy who explains why our start-up is an exciting prospect.

VC Magazine: You are the new managing director of BayWa r.e. Energy Ventures. What are your goals and plans?

Zavorotniy: Our plan is to continue to expand the early-stage investment platform, with a focus on energy technology companies in the EMEA region. Our goal is to expand our activities over the next 24 months as we see more unique opportunities in the market. We have identified some topics that we will pursue in the coming months, but we are always open to new ideas.

VC Magazine: What does your current portfolio look like? Are you feeling the effects of the geopolitical crises, how are your start-ups doing?

Zavorotniy: We have a small but very targeted portfolio of companies playing a role in the energy transition space. Most of our companies have grown significantly in recent years despite the difficult geopolitical and economic environment. Overall, we are more concerned about the market environment that continues to impact early-stage companies. The companies we have invested in operate in different countries, so we naturally have to keep an eye on a variety of country risks – for example, our latest portfolio company focuses on developing markets and in particular on the African continent, where political risk is much higher.

VC Magazine: You recently participated in the funding round for Circadian Technologies. What makes this start-up so exciting in your view?

Zavorotniy: I started working in Africa 15 years ago and we talked for a long time about solar adoption on the continent. Circadian’s focus on this region and its ability to help various players in the solar ecosystem ramp up PV installations made it a very interesting opportunity. The company’s product and project-based approach makes it a scalable business model.

VC Magazine: With Circadian Technologies, you want to drive the energy transition in emerging markets. How did this business idea come about?

Rosenberg: My co-founder Max and I spent our start-up careers working in the solar industry in Africa and were involved in installing thousands of solar and storage systems for off-grid clinics, classrooms, and businesses, so we knew firsthand the challenges of running microgrids at scale. We launched Circadian to address the challenge that diesel generators are the main source of power for businesses in the face of weak grids and constant power outages and continue to outperform solar despite rising fuel prices. This is because generators are plug-and-play products and solar and storage microgrids are complex, messy projects. Our hardware and SaaS toolkit enables local solar developers to better design, optimize, and remotely control microgrids at scale – decarbonization through digitalization.

VC Magazine: What are your plans with the venture capital?

Rosenberg: We are using the investment to expand our offering and meet immediate needs. We have a great first market with telecom tower operators, and we have grown our team to build out our software capabilities and increase our Annual Recurring Revenue (ARR) per tower, with the short-term goal of managing the power supply of 5,000 towers. Here, our company mantra of “product instead of project” enables our energy management solution to be sold and supported by our growing customer success teams in Nigeria and South Africa, which reduces our customer acquisition costs.

VC Magazine: What trends and developments in the air conditioning sector are you currently seeing?

Rosenberg: While there is innovation in smarter power grids and electric mobility, the impact of replacing diesel generators in emerging markets is overlooked. One of our customers in Nigeria uses 30 million liters of diesel per month to power telecom towers. In fact, Icelandair uses about the same amount of hydrocarbons, so decarbonizing this business would be like taking an airline out of the sky. In addition, microgrids in emerging markets, which are almost always equipped with batteries, can serve as a best practice for more mature markets moving from rooftop solar to greater sophistication

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