Sifted — Former Grover CFO raises $7.5 million to support power grid with Tesla batteries

Berlin-based startup Terra One has received 7.5 million dollars in a seed financing round to expand its battery storage systems in Germany. The company uses lithium-ion batteries and AI technology to efficiently store energy and feed it into the grid at optimal times, based on demand and energy prices. This strategy addresses the problem of energy loss due to network overloads and supports the stabilization of the power grid through intelligent energy management.

With increasing electrification, for example through heat pumps and electric vehicles, the energy grid in Europe is under great pressure. The inefficiency of energy networks means that large amounts of clean energy are often wasted.

In 2023, nineteen terawatt hours of energy — enough to supply six million households — were lost in Germany due to network congestion. Terra One's solution is to store renewable energy generated during periods of low demand and then feed it into the grid when demand is high.

Instead of making the batteries itself, Terra One buys lithium-ion batteries from companies such as Tesla or CATL. The batteries are then placed near a transmission line or a substation and connected to the grid via a network operator, of which there are 800 in Germany.

According to the company, the innovation lies in its AI model, which analyses market trends as well as supply and demand to decide when is the optimal time to charge the battery — both in terms of the energy balance in the network and the price for customers — and when it should be discharged.

PT1, an early-stage VC for real asset technologies, and neosfer, Commerzbank's early-stage investor, led the round. 468 Capital, N26 co-founder Maximilian Tayenthal and the scout funds of Andreessen Horowitz and Hedosophia also participated.

The Terra One solution

Founded in 2022, the company buys energy from the European Energy Exchange (EEX) in the middle of the day and at night, when the share of renewable energy is highest. It stores this energy in its batteries, and its AI model finds the optimal time to sell energy back to EEX when the share of renewable energy is low.

The company has 300 projects in the pipeline, most of which are awaiting building permits and network access before they can be developed. Obtaining permits can often be a lengthy process, which Germany is trying to shorten with its battery storage strategy.

According to the company, Terra One's battery systems generate between 10 and 500 megawatts of clean electricity.

“By way of comparison, the city of Potsdam with its 100,000 inhabitants just outside Berlin consumes 90 megawatts per hour. With a 500 megawatt battery, you could therefore supply Potsdam with electricity for more than five hours,” says Thomas Antonioli, co-founder and CFO of Terra One and former CFO of the electronic rental unicorn Grover.

Other battery storage companies in Europe include Field in the UK, which is following a similar model to Terra One by selling power back to the grid but also selling regulatory services to the grids. There are also two major players in Sweden: Polarium, which develops battery storage for companies, and Ingrid Capacity, which builds large-scale energy storage systems.

Future funding

Terra One will use VC funding to hire engineers and project finance experts, further develop its AI software, and eventually expand its infrastructure to various countries.

Infrastructure and pension funds that want to invest directly in batteries will finance the physical hardware, which they can do through a special purpose vehicle set up by Terra One.

The company believes it won't need to raise much more equity to expand the business.

“Batteries are relatively new and more complicated to build and operate than a solar panel, for example,” says Antonioli.

“There are therefore many investors who would like to invest capital (in batteries) but have not yet been able to do so because there was no access to it. Our goal is to give them this type of access to invest in batteries.

“VC investors wouldn't be particularly excited to finance this: They want to invest in the software and the team and in the scalable business, but not in any kind of tangible asset.”


Miriam Partington
Miriam Partington is a reporter at Sifted. She reports on the DACH region and the future of work and is co-author of Startup Life, a weekly newsletter about building a startup.