Target Company Information
Capalo AI is a Finnish energy technology company established in 2022, located in Kuopio. The company utilizes artificial intelligence to optimize the utilization of energy storage systems and manage the trading of stored energy in the electricity markets. Recently, Capalo AI successfully raised €3.8 million in funding to support its internationalization efforts. The primary investors in this funding round were Greek venture capital firm VentureFriends and British firm PROFounders, along with contributions from existing investors including Finnish venture capital firms Inventure and Innovestor.
Capalo AI has developed a virtual power plant that integrates industrial battery systems located throughout various regions into a singular entity, enhancing the efficiency and management of energy storage systems. This helps the electric system respond to fluctuations in supply and demand, optimizing the balance between renewable energy sources and electricity consumption. By doing so, Capalo AI’s virtual power plant not only stabilizes the electricity system but also maximizes returns for investors focused on energy storage solutions while benefiting consumers through steadier electricity prices.
Industry Overview
The international market for energy storage is experiencing rapid growth, with installations of large energy storage systems increasing globally at an annual rate of approximately 70%. This surge in installations coincides with a significant increase in inquiries from operators overseeing and designing energy storage systems to connect to the Fingrid transmission network. Fingrid reported an astonishing 18 Gigawatts worth of network connection inquiries last year, a figure that starkly contrasts with the maximum capacity of Finland's largest nuclear power plant, Olkiluoto 3, which is 1.6 Gigawatts.
In Finland, the energy sector is under transformation to incorporate more renewable energy sources, raising the demand for effective energy storage solutions. The intermittent nature of wind and solar power makes it crucial to maintain a balance between energy production and consumption within the electrical grid, thus elevating operational costs. As a consequence, energy storage solutions have become increasingly attractive as investment opportunities for infrastructure investors, given their potential to participate in stabilizing the electricity system and creating lucrative income streams.
Furthermore, energy storage systems, particularly those based on batteries, are deemed essential for the transition to clean energy and for maintaining a reliable electrical system. However, it's vital to recognize that advanced battery technology alone cannot provide the necessary value to the electrical system. A comprehensive approach that highly effectively utilizes the entire battery capacity is required for maximizing impact.
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Rationale Behind the Deal
Investor Information
The lead investors in Capalo AI's recent funding round, VentureFriends and PROFounders, are noted for their keen focus on innovative technology companies. VentureFriends, in particular, has expressed confidence in Capalo AI's exceptional growth trajectory and understanding of the energy landscape, indicating a shared ambition to drive the energy transition at an international level.
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This investment in Capalo AI appears to be a promising opportunity given the pressing need for energy storage solutions driven by the increasing reliance on renewable energy. The rapidly growing demand for energy stabilization technologies highlights a lucrative market potential for Capalo AI, further underscored by their position as a market leader in Finland.
Moreover, with the appropriate deployment of the recently acquired capital, Capalo AI could leverage its cutting-edge technology to capture market share in the European energy sector. Understanding that the energy storage market is expanding globally and that Capalo AI is well-positioned to capitalize on these opportunities, this investment could yield significant returns in the medium to long term.
Lastly, the expertise of the Capalo AI team, comprising specialists in mathematics, physics, AI engineering, cloud architecture, and energy markets, provides a strong foundation to successfully navigate the complexities of international expansion and competitive landscape. Overall, it seems that this investment could be a strategic move toward fostering sustainable energy practices while also ensuring potential profitability.
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Württembergische Energie GmbH, Brandenburg Kapital GmbH, European Social Innovation and Impact Fund, better ventures network → ALVA Energie
2025
VentureFriends, PROFounders
invested in
Capalo AI
in 2025
in a Seed Stage deal
Disclosed details
Transaction Size: $4M