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German climate startup Ecoworks cements €40M funding, third-largest contech round in Europe

German climate startup Ecoworks cements €40M funding, third-largest contech round in Europe

The climate tech sector in Germany is experiencing significant growth. The country has seen a surge in startups focusing on sustainable solutions, renewable energy, and environmental innovations. We recently saw a German startup receiving €3.2M funding which was fueled to extract carbon dioxide from the atmosphere.

Now yet another Berlin-based climate-tech startup, Ecoworks, has successfully closed a €40 million funding round led by World Fund, with participation from Haniel, KOMPAS VC, and ISAI. The funding round reflects the increasing demand for sustainable construction solutions in Europe.

“The financing round was almost three times oversubscribed. This shows the enormous interest in solutions for the upcoming European renovation wave,” says Emanuel Heisenberg, founder of Ecoworks. He also mentioned in a conversation with TFN, “It’s the third largest construction tech (contech) round in Europe. In total, the company has roughly raised around €50M since founded.”

Emanuel Heisenberg, the founder of Ecoworks with a remarkable background in climate tech for the past 16 years, shared his personal journey in founding the contech startup. Having previously worked in decentralised energy and deep geothermal projects, Heisenberg’s focus shifted to the significant challenge of decarbonising the German building stock. His journey in climate technology led him to consult for the German parliament and eventually launch Ecoworks.

As of now, the European built environment faces a considerable challenge, with nearly 75% of buildings considered energy inefficient. Ecoworks aims to address this issue by leading the charge in retrofitting buildings with an energy-efficient building skin. With around 50% of residential units in Europe having low energy performance ratings, the need for renovation is critical.

Earlier this year, we also reported about a startup that helps agri-food companies measure and reduce greenhouse gas emissions. Ecoworks is working towards the same goal but in a different industry. “We are delighted to be part of Ecoworks’ journey and to support Emanuel Heisenberg’s team in their goal to reduce greenhouse gas emissions by a total of more than 1 gigaton of CO₂ by 2045,” says Philipp Göhre, Growth Partner at Haniel.

The startup plans to utilise the funding to further optimise its technology, combining AI-supported digital planning with serial-produced efficient building elements. The goal is not only to reduce greenhouse gas emissions but also to significantly increase the value of renovated buildings.

Heisenberg shares, ​​”When I initiated this technology, I was the pioneer in Germany, venturing into the net-zero renovation industry. Now, there are similar technologies in the Netherlands and France, but in Germany, I can confidently say I was the first. Our direct competitors currently include established players and midsize German construction companies with around 500 million in revenues. However, as we scale and reach a billion in revenue, the competitive landscape will undoubtedly evolve. The market is vast, and with increasing pressure for decarbonisation from banks and insurance companies, the net-zero renovation industry is growing. While competition is emerging, the industry itself is expanding, presenting significant opportunities for innovation and growth.”

Investors show strong confidence

World Fund, known for investing in startups with high climate performance potential, expressed confidence in Ecoworks’ mission to reduce GHG emissions. The startup targets a reduction of over 1 gigaton CO2 by 2045, contributing significantly to the global efforts to combat climate change.

“Almost 75% of buildings in Europe are considered energy inefficient. Currently, the renovation rate is less than 1%,” says Daria Saharova, Managing Partner at World Fund.

Commenting on the investment, Daria Saharova, Managing Partner at World Fund, emphasised the increasing demand for renovation solutions due to regulatory demands and a global push for carbon reduction in the construction sector.

Green revolution in retrofitting technology

Emanuel Heisenberg, founder of Ecoworks, shared his perspective on the challenges the company faces. He highlighted the focus on scaling and improving margins, aiming to overcome the challenges of delivering projects on time, within budget, and maintaining high quality. Ecoworks has already demonstrated its ability to retrofit apartment blocks, increasing their value by 100% or more.

“With our order book and increasing margins, Ecoworks has the potential to become a European tech leader in the construction market,” adds Heisenberg.

The startup’s facade elements come equipped with integrated windows, insulation, and building services, making the retrofitting process efficient and impactful. With the renovation market in Germany alone estimated at €250 billion per year, Ecoworks has room for significant growth.

Future expansion and innovation plans

“While the immediate focus is on the German market, which represents a substantial renovation opportunity, Ecoworks envisions international expansion post-2025,” says Emanuel Heisenberg.

The funds raised will be strategically allocated for software and hardware development, with the aim of bringing down costs by 30% within the next 12 to 18 months. Ecoworks also plans to achieve break-even during the same period, making the company not only operationally successful but also financially sustainable.

“With our order book and increasing margins, Ecoworks has the potential to become a European tech leader in the construction market,” adds Heisenberg.

As of now, with roughly 120 to 130 team members, all based in Germany and 40% female members taking positions in the startup, that too in the construction industry is quite a thing about Ecoworks. With a visionary mission, strong investor backing, and a commitment to innovative solutions, Ecoworks, under the leadership of Emanuel Heisenberg, is poised to play a pivotal role in reshaping the landscape of climate-neutral renovation in the digital age.

Interview by Akansha Dimri

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