German digital green energy provider Ostrom has closed a €20 million Series B funding round. Led by Eneco Ventures, the round was also joined by existing investors SE Ventures, Union Square Ventures, Adjacent, Übermorgen and J12. It brings Ostrom’s total funding to more than €40 million, and the company will be using the investment to accelerate their rollout, subsidise smart meter installations, and consolidate their leading position in automation.
Ostrom has seen rapid growth as a green energy provider and operates Germany’s largest Virtual Power Plant (VPP). We asked co-founder and CEO Matthias Martensen about Ostrom, their plans, and the impact that green energy can make.
From idea to industry disruptor
The idea behind Ostrom came from the founders’ observations of the power industry. Like much of Europe, the German power sector has changed little over time.
Martensen, with a background in consulting, noted how badly the old-fashioned approach served some established companies. “During Covid, one energy retailer lost 80% of customer acquisition in the lockdown,” he explained. “They were using door-to-door as the main acquisition channel.” He joined Karl Villanueva, who had marketing and product experience from several startups, to found Ostrom in 2021, offering customers a transparent, flexible, and responsible green energy option.
Smart energy and a seamless customer experience
Ostrom’s goal is to become Europe’s leading green power provider, and they have made an impressive start, despite the low base they are working from. “The biggest bottleneck in Germany is smart meters, only 2% in Germany have one,” he told us. “Ostrom is already ahead, with close to 10% of its customers having one installed.” Smart meters are critical to one of Ostrom’s major features, their Virtual Power Plant.
Virtual Power Plants (VPPs) are a relatively new concept made possible by the adoption of home energy generation and even electric vehicles. Traditional power relies on large stations generating energy. The problem is that waste is built in: they have to generate more power than is needed, but that surplus energy goes unused.
VPPs work by utilising home generation and storage, using them to supplement traditional generation. It allows homeowners, for example, to store the cheap surplus power in their EV, selling it back to the grid during peak demand times.
A major challenge is selling the benefit in a market that has rarely seen innovation, “Mass market adoption is around the corner, but it will take the next few years to double down on this opportunity,” said Martensen. “A key part of this is to find and educate customers. This is where Karl can bring his deep expertise to make VPPs easily understandable.”
Ostrom is also innovating behind the scenes, making it easy for customers to manage their accounts, even where they have complex set-ups both buying and selling energy. “The customer can conduct everything in the app via self-service,” Martensen said. “Fifty percent of all inbound customer support is handled by AI,” he told us, although he added that they remained committed to human support, “when help is really needed, a human is only a click away.”
The approach was one of the attractions for investors. “Ostrom is a true pioneer in unlocking residential flexibility, delivering real value to consumers, accelerating the adoption of renewable energy, and strengthening grid stability,” Jan van der Velde, Investment Director at Eneco Ventures, said.
Changing how Germany uses power
Ostrom is poised to help Germany finally shift from a traditional supplier and consumer model to become a dynamic energy market. Although each individual customer is a small part of the VPP, collectively they have a significant impact, helping to shift load in real time and optimise the efficiency of the whole system.
Customers benefit from lower prices overall, but especially when they can take advantage of dynamic pricing and store energy when it at its cheapest. It can also have a significant environmental benefit, too, by storing surplus energy from renewable sources, it helps minimise the use of fossil fuels at peak periods.
“The main benefit of the VPP is that energy is used when it is abundantly available. In the summer, we shift as much load as possible, so customers benefit from negative prices,” Martensen explained. “We do this optimisation every single second so that customers always get the best price.”
Developing a greener Europe
Their partnership with Eneco is more than just funding; Eneco Ventures is the venture capital arm of a Dutch sustainable energy company. By using the funding to increase the uptake of smart meters and expand their VPP, Ostrom hopes to reshape the energy market.
“Eneco brings deep industry expertise while Ostrom maintains full independence, strengthening our platform as we accelerate smart meter adoption and scale our virtual power plant,” said Martensen. “With a clear focus on medium-term profitability, we are driving the transformation of the energy market.”
