“There are certainly possibilities in the Netherlands, albeit on a smaller scale”

Jeroen Schreur on investing in the Dutch energy transition

From smart batteries to innovative charging technologies for electric vehicles: These are some of the initiatives through which fledgling companies are contributing to the Dutch energy transition. APG invests in these start-ups on behalf of ABP through Rockstart, an initiative that specializes in selecting and supporting promising young companies. The first companies selected to participate in this program were announced today. “We expect that Rockstart will help several of these companies to grow into leading players in the field of energy,” says Jeroen Schreur, in charge of investments in the energy transition at APG.

To facilitate ABP’s investments in the Dutch energy transition through relatively small and innovative projects and companies, APG established ANET (“the ABP Dutch Energy Transition Fund”) at the beginning of 2019. The fund invests in projects and companies that focus on the generation, storage, distribution, and conservation of energy. Schreur explains: “Pension funds often rely on larger companies and projects worldwide to invest their considerable assets. Although it is difficult to find them in the Netherlands, there are certainly opportunities here – albeit on a smaller scale. Ignoring this would be a great pity, because it is an interesting, dynamic market that offers attractive opportunities. By investing in a broadly diversified portfolio of promising young companies, we expect to achieve good returns at an acceptable risk.”

Follow-on capital
Apart from Asper (smart heating grids), Rockstart is one of the specialized investors with whom ANET is seeking to collaborate. Rockstart is what is referred to as a “start-up accelerator”: an initiative that offers promising young companies support and extensive guidance. Schreur explains: “Rockstart provides them with support to further develop their business, marketing, and funding plans. The initiative has been conducting programs like this in various branches of industry, such as the healthcare, agri-food, and ICT sectors ever since 2012. Through Rockstart, participating start-ups will be given access to relevant networks that will put them in contact with people, organizations, knowledge, expertise, and experience. In addition to the accelerator program, once the participating start-ups have produced successful results, they will also be given access to the necessary follow-up capital to secure their further growth. After all, finding funding for further growth is a difficult task, particularly for start-ups. Rockstart has developed a specific approach for the agri-food sector, which has already helped many companies reach the next phase in their development. It is doing this for ANET as well, where it will be applied to companies that promote the energy transition in the Netherlands through innovative technology.”

Attractive partnership
APG is an attractive partner for investors such as Rockstart and for businesses with clear growth ambitions. Schreur says: “Strategic partners such as Rockstart contribute knowledge, expertise, and experience. On top of that, APG offers the benefits of a long-term investment horizon, as we have more time to enable an investment to reach full maturity than venture capital associations, who tend to pull out after five years or so. This proposition is particularly attractive to companies looking for funding to secure further growth.”

The first start-ups selected for ANET are Advanced Infrastructure, Bia, Helio, Klimate, OKTO, Soolutions, Starke Energy, and eDRV. They all contribute, in one way or another, to solutions that make the Dutch energy system more sustainable. Starke Energy, for example, is preparing to install a smart battery in the office building of the Parteon housing corporation in Wormerveer. The technology linked to this battery allows the corporation to make use of the generated power when needed or, if there is a surplus, for it to be fed into the power grid in return for cash. Through this trial, Starke aims to explore the possibility of applying this technology to affordably enhance the sustainability of rental homes, in which the Dutch housing corporations – who manage over 2.4 million rental properties – could serve as a key enabler. This would result in a wonderful opportunity to grow for Starke Energy and is one of the reasons why this originally Spanish company decided to relocate to the Netherlands.

Power grid overload
Bia Power is also among the selected start-ups. The software developed by this company offers a solution for the strongly growing demand for power in response to the increasing number of electric vehicles (EVs). This can cause the power grid to overload at peak moments. Bia Power’s software identifies peaks and troughs on the power grid in terms of supply and demand. This facilitates optimum recharging, enabling the power grid to retain a perfect balance and batteries to last longer. Bia Power also has Spanish roots and is currently in the process of establishing itself in the Netherlands.

ANET currently has 250 million euros at its disposal for investment in start-ups and is managed by a team of four investors from APG. In addition to fund investments such as Rockstart, the team focuses on direct investments in companies and projects in their scale-up phase (companies with a proven technology that are ready to scale up for commercial applications). Companies that have already made a bit more headway in this respect are also eligible for funding via ANET.

Future leading players
Through Rockstart, ANET is building up a portfolio of fifty start-ups, who will be selected during the following five-year period. Eight to ten start-ups are added to this each year, on average. A second round will be held at the end of 2021. Schreur says: “Our selection process is very strict and takes several days of intensive screening to complete. Out of the fifty companies that were selected, perhaps ten to twenty will qualify for follow-up funding to help them grow further. Thanks to its accelerator model, Rockstart is more than capable of mitigating the risks commonly faced by young companies like these. A number of them will not be able to survive, but we expect that Rockstart will help some of them develop into future leading players in the field of energy.”