Reshape Energy is placing its bets on an integrated approach to accelerate the decarbonization of buildings. The Munich-based startup, founded in May 2024, boasts a leadership team with a background in scaling energy businesses, including Octopus Energy’s German division and energy price comparison platform Verivox. Its primary focus is on providing energy system upgrades to commercial real estate, targeting property owners with diverse building portfolios.

The significant contribution of carbon emissions from heating buildings to climate change necessitates a swift transition to lower-carbon heat management forms, such as heat pumps and solar panels, to meet climate goals. Consequently, European building owners face considerable regulatory pressure to undertake energy upgrades.

However, accessing specialized skills required for these energy upgrade projects or even comprehending the necessary optimizations for a specific building can hinder the momentum for low-carbon solutions.

Reshape Energy aims to mitigate this friction with a one-stop-shop model, commencing in the German market and planning to expand throughout Europe as it scales its approach.

Tackling Energy Upgrade Inertia

During the conceptualization of the business, the founders pondered the question of why substantial progress wasn’t being made in energy upgrades for commercial buildings, according to CEO and co-founder Benjamin Stanzl, in an interview with TechCrunch.

The energy upgrade momentum for single-family homes has been notable, but the same cannot be said for commercial real estate, which is Reshape Energy’s primary focus, with the sector experiencing a slower uptake due to systemic complexity and a lack of expertise among property owners.

Stanzl emphasizes that the biggest competitive threat is the tendency to do nothing, which stems from the high complexity of executing energy upgrade projects and the trust issues prevalent in the construction sector.

To tackle this inertia, Reshape Energy is adopting an acquisition model, purchasing existing companies to bring key capabilities and customer relationships in-house and power its energy-optimization-as-a-service offering.

The startup intends to cover all stages of a project, from initial assessments to installation and ongoing maintenance, including financing options for customers seeking to spread the upfront costs of new energy systems.

By covering the full chain of requirements for energy upgrades, Reshape Energy believes it can unlock efficiencies of scale while leveraging trusted customer relationships and breaking out of the siloed workflow that characterizes the sector.

Funding Injection

Reshape Energy has made some acquisitions to build out its offerings and plans to utilize part of a new €5 million funding round for further acquisitions, marking its first external capital raise.

The acquisition model enables the company to shortcut customer acquisition, plug into existing relationships, and onboard key skills, giving it full control over where and how skills are deployed, according to Stanzl.

The founders are contributing some of their own funds to the €5 million raise, and other investors include PostScriptum Ventures, Vireo Ventures, and unnamed industry insiders.

Different Models

Following Russia’s invasion of Ukraine in 2022 and the subsequent surge in gas prices, Germany witnessed a boom in energy upgrade startups, but the initial wave of activity has subsided, according to Stanzl.

Players in the space now have an incentive to adopt a more integrated approach, enabling them to tackle more complex challenges like commercial real estate upgrades, which require a deeper understanding of the building’s electrical infrastructure and potential need for upgrades.

Reshape Energy’s model of offering energy optimization services appears more capital-efficient than other approaches, such as buying up real estate to transform its energy infrastructure, as seen in the case of German startup Reneo, which recently secured €600 million in funding.

Stanzl notes that they considered taking on property ownership but decided it was not core to their energy transition mission, and the company has also decided against involving itself in cosmetic improvements to buildings, focusing instead on the energy infrastructure and energy fabric.