Aster Capital recently led the €2m Series A round of ekWateur, alongside BNB Paribas Développement and Bouygues Telecom Initiatives. Founded in November 2015 with the ambition to become a key energy retail player in France, the company provides an innovative and truly seamless customer experience in a collaborative environment, while offering a 100% green energy at a competitive price. The company also has an ambitious and clear vision for energy services development to complement its energy retail business.
Following the initial commercial launch in September 2016, ekWateur Q4 2016 achievements are impressive. The company already provides green energy to more than 4,000 clients, including a contract with French Procurement Department (DAE) for the supply of 2,600 public sites over 3 years, and its portfolio is experiencing a triple-digit month-over-month growth.
Why do we at Aster believe in ekWateur’s capacity to become a key player in the and competitive French energy retail market? How could the company establish itself as a relevant player alongside EDF, Direct-Energie, and other alternative retailers in the near future?
1. A fast-changing energy retail market in France
Despite deregulation of the residential energy retail market in France in 2007, market concentration remains much higher in France than in other European countries. 4 to 6 players are fiercely competing for the domestic UK, Belgian or German market for instance. Those markets used to be geographically fragmented (linked to network ownership of various companies per region before liberalization) and each historical regional leader now capture approx. 10-25% of the customer base. While EDF still holds a strong position in France (related to the historical national monopoly of the company – a key difference vs. other European countries), the French market is bound to follow its neighbors’ de-concentration trend as customers get educated and competition increases.
In addition to deregulation, a couple of drivers impacting end-customers and potential new entrants will further foster market fragmentation in the years to come:
- First, Regulated Tariffs have been steadily increasing since 2007 (+2-5% p.a.), which has induced end-customers to look around for alternative / cheaper offers. Price remains the primary reason for customer churn. Subsequently, relevance of green offerings is gaining momentum for a growing number of customers;
- Second, a set of financial and regulatory incentives is creating favorable conditions for the emergence of alternative offers (e.g., sharing of bad-payers’ costs across the value chain, ENEDIS subsidies for small retailers, etc.)
At Aster, we dedicate a lot of effort to identifying, meeting with and selecting the startups which seem to us to be the most promising, with the necessary strengths and talented teams as well as the ability to adapt, pivot and magnify their company’s technological and commercial potential. But we also feel that success is driven by vectors of transformation and disruption of markets, which act as catalysts for sector trends. These forces that often operate on certain markets and these breakthroughs that are often a result of the efforts of young companies can affect all sectors, including so-called traditional sectors in manufacturing and infrastructure like water, energy, transport, materials, food and construction. We believe ekWateur is a clear example of such transformation in the energy retail market in France.
2. A truly innovative new player on the market
ekWateur web platform, used for subscription and account management, is unique on the market and has been successfully designed and developed by the founding team to provide a UX in line with telecom / internet standards. Prospect customers can easily upload their energy bill on ekWateur website. From this, the platform would automatically pre-fill all the customer information (contact details, PDL/PCE numbers, etc.) and perform an estimation of the potential savings achieved with ekWateur vs. current energy provider. Beyond green energy offering at a lower price, this allows incredibly quick and seamless subscription process for customers. In addition, we are excited by the company’s ambition to create a truly collaborative customer base and by its roadmap for services development and commercialization starting in 2017.
Last but not least, the entire Aster team have been impressed by the capacity of the founders to quickly develop ekWateur offer, to gather a strong and committed development team and to constantly adjust to fast-moving market conditions (e.g., evolution of market prices, impact of EDF nuclear plant closure, etc.). We are excited to team up with Julien and Jonathan and are opening the full spectrum of our resources to help the company grow and lead the way towards a cheaper and greener energy supply for individuals in France.