Reel secures €5M seed funding to accelerate Europe’s renewable energy transition

Copenhagen, 22nd January 2024 - Next-generation electricity supplier Reel announces €5M investment led by Transition with participation from existing shareholders. The Copenhagen-based energy tech company will use the investment to scale its transformative model for B2B renewable electricity supply across Europe.

The seed round is led by Transition, a venture capital fund investing exclusively in companies accelerating the climate transition, with participation from existing investors UVC Partners, The Footprint Firm, and a group of energy specialists and successful founders including the Chief Project Development Officer of Climeworks, Daniel Nathan, and the Co-founder of Netlify, Christian Bach.

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A successful year transforming electricity procurement in Denmark

In the past year, Reel has experienced rapid customer growth, consisting of large, industry leading customers. With new renewable energy projects already slated for 2024, Reel is allowing all companies, regardless of size, to drive the energy transition forward and access fixed-cost electricity.

David Helgason, Co-founder & Partner at Transition notes:

Reel combines climate impact and direct cost savings and predictability. Reel’s solution is a breath of fresh air as it offers an avenue for companies to spearhead the energy transition in an easy, genuine, and financially attractive way.

Now, Reel will kick off a comprehensive growth plan aimed at expanding its product offering and introducing its unique electricity procurement model to carbon-intensive energy markets across Europe. This will include growing its team, seeking out exceptional talent worldwide in the fields of tech, energy, and commercial & operations.

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Reel unlocks impactful electricity for companies

Reel believes that changing the way electricity is bought, used, and reported by companies needs to be front and center in the fight against climate change. Electricity is one of the main sources of CO₂ emissions globally¹, with the commercial and industrial sectors accounting for two-thirds of total global electricity consumption².

Reel’s solution is an important alternative to the conventional way companies purchase renewable energy: i.e., Guarantees of Origin or Renewable Energy Certificates. These certificates are criticized for not leading to actual CO₂ reductions³, despite companies using them to claim that they are consuming carbon-free electricity. Jon Sigvert, CEO and Co-founder of Reel, notes that:

The pervasiveness of flawed renewable energy certificates means that corporate CO₂ reduction efforts are greatly overestimated, further accentuating our risk of falling short of the Paris Agreement. In addition, conventional contracts are commercially unattractive as companies pay extra for the certificates. Reel’s technology solves for all of these issues, and allows all companies - big and small - to help accelerate the renewable energy transition.

Reel’s unique technology transforms traditional Power Purchase Agreements (a type of electricity contract) into an accessible model that allows all companies to achieve carbon-free energy consumption every hour of every day, an approach already being used by larger players like Google⁴ and Microsoft⁵.

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Disrupting a legacy industry to accelerate the energy transition

Reel is disrupting a legacy industry that has seen little innovation in recent decades. Reel’s innovative PPAs mean that every company’s electricity contract helps build a new solar or wind park. As Europe plans for a tripling of renewable energy capacity by 2030⁶, Reel’s technology aims to catalyse the corporate sector’s contribution to this goal. According to Jon Sigvert, companies’ renewable energy intentions are already present but need to be turned into actual CO₂ reductions:

Companies are increasingly aware of their carbon footprint⁷ and are implementing measures to take responsibility for their impact on the climate and the electricity they consume. This is a promising development, but to effectively solve the climate crisis in time, these intentions need to be converted into actual CO₂ reductions. And that is exactly what we help companies accomplish.

As noted by Peter Pallishøj, CEO of Baettr and a customer of Reel, the company enables ambitious corporate action on climate change by combining climate impact with financial benefits:

Signing a PPA with Reel means that we can actually reduce our emissions and positively impact the climate. Besides driving the uptake of renewable energy, we now have a strategy to deal with the volatility in electricity prices. Our PPA with Reel gives us an effective and long-term fixed-price solution that allows us to manage this risk effectively, while addressing our sustainability goals. We literally could not get this win-win scenario anywhere else than with Reel.

Mona Alsubaei, Partner at Transition and board member at Reel adds:

The need for solutions that accelerate the energy transition while ensuring financial certainty for companies has never been more urgent. Reel changes the way companies purchase electricity. We are excited to partner with Reel to support the transition to truly green and renewable energy. We are impressed by the team's ability, execution to date, and customer traction. With this significant funding round, Reel will be in a prime position to conquer and expand to the European PPA market and beyond.

Alexander Kiltz, Principal at UVC Partners and board member at Reel says:

Since leading Reel's pre-seed round, we have witnessed the team demonstrating its ability to execute an elaborate business model deeply embedded into the electricity value chain. Reel launched as a certified electricity provider and signed multiple PPAs by winning some of Denmark's leading companies as customers and working with multiple renewable energy developers in Denmark and beyond. We look forward to the next steps in Reel's journey by launching additional products and expanding into further geographies.

Sources

1. IPCC (2022)
2. IEA (2021)
3. Bjørn et al. (2022), Brander et al. (2018), The Verge (2022), The Washington Post (2023)
4. Google (2022)
5. Microsoft (2020)
6. IRENA (2022), COP28 (2023)
7. CDP (2020)