Berlin-based Smalt, a training academy and tech platform for the green energy installation industry, has raised €8m in seed funding led by proptech VC noa, formerly A/O PropTech. Existing investors including General Catalyst and Owl Ventures also participated in the round.
The round came ahead of schedule for the Smalt team, which raised €4.1m last spring, the company tells Sifted. Proptech investor noa visited the startup in Berlin in January, and ended up putting “a term sheet in front of us,” cofounder Marius Westhoff says. “To be honest, it came as a surprise.”
Smalt upskills and deploys workers to install green energy systems like solar panels, with a focus on employing migrant workers in Germany. Smalt operates in Berlin, Hanover, Dortmund and Cologne (as well as nearby areas like Leipzig) and has a new training facility in Berlin. It’s estimated that Germany faces a labour shortage of over 300,000 skilled workers by 2030.
The cofounders tell Sifted that Smalt is growing revenue at around 20% to 25% on a month-over-month basis, with around €3-4m in annualised revenue. The company has 50 employees, 40 of which are installers. Noa investor Arjun Jairaj will be joining the startup’s board as part of the round.
Pivot to commercial
The solar market hasn’t been kind to startups of late. Customer demand for PVs (photovoltaics, or solar panels) has slumped amid high inflation and interest rates, and big installers like Berlin’s Enpal have acknowledged that times are tough.
Cofounder Khurram Masood says that, while Smalt hadn’t yet felt the sting of the slowdown in residential installations, its customers were beginning to feel it, and the company could see that down the line it would be an issue.
“Our growth expectations being a VC-funded business are really high, and if there’s such a big drop in the [residential] market… it affects us in terms of our ability to grow as fast as we wanted to,” Masood says. That’s why Smalt is now pivoting to commercial PV installations, expanding beyond single-family homes.
Masood and Westhoff say large commercial solar projects are a growing market because of things like green energy mandates for new builds and retrofits in the coming years.
“This is still a fairly untapped market which requires specialised skill sets on the planning side, on the tech side,” adds Westhoff. Smalt began to pilot its commercial installations earlier this year, working with solar companies like Enviria and Alva Energie. Other customers include German heating installer Thermondo.
The big commercial installations will require additional training for Smalt workers when it comes to project management, due to bigger buildings having more complex layouts and requirements than residential properties.
“The skill sets are, especially on the execution side, similar, [but] it’s much more complex on the planning side of things,” says Westhoff; Masood adds that it’s the “same people” doing the installations, spearheaded by a newly-hired mesiterin (German trades professional) Sara Thierfelder, but that Smalt’s training system already has project management capabilities, which will help with those big jobs.
Westhoff says commercial installations will likely comprise up to 60% of the company’s revenues over time, although the team’s not sure exactly how the revenue split will pan out over the next couple of years.
And it’s not all about solar: Smalt is planning to test the heat pump market in 2025, and intends to pilot its franchise model — which will let installers set up their own training businesses using Smalt’s learning materials and tech platform — next year as well. Masood says they’re thinking about expanding beyond Germany in 2025 into markets like the Netherlands or France.
“Our vision has not changed, which is that we are here to solve the demand. We are here to solve the labour supply and productivity problem in Europe,” adds Masood. “We do now have the cash to be able to explore these ideas.”
Read the orginal article: https://sifted.eu/articles/smalt-fundraise-8m-solar-news/
