OTPP Is Lead Investor in Instagrid’s US$95M Series C Funding Round
Ontario Teachers’ Pension Plan is leading a US$95-million funding round for Instagrid GmbH, a German maker of portable battery systems designed to replace gas-powered generators.
Teachers’ Venture Growth (TVG), the venture capital investing arm of the $250-billion pension fund, is the lead investor in Instagrid’s Series C funding round and gains a seat on the company’s board. Instagrid also attracted an investment from Morgan Stanley Investment Management through its climate-focused private equity fund, 1GT.
Instagrid sells its main product in 29 countries, primarily in Europe. It’s a portable battery system that promises a cleaner alternative to generators that burn fossil fuels, widely used on construction sites and film sets and by emergency services. Crucially, Instagrid claims its portable batteries can rival the power available from electrical grids or gas-powered generators; for example, they can run welding equipment for a full day.
The company plans to use the funding to ramp up production and push into the North American market, which is expected to include launching new products in Canada. To lead that push, it has hired a chief executive officer for its U.S. operations, Rich Romer, who has sales and marketing experience at General Electric Co.’s fuel-cell arm and at the smart-grid division of Siemens AG.
Teachers estimates that more than 50 million small internal-combustion engines are built each year for purposes other than propelling vehicles and that the demand for cleaner alternatives that can reduce companies’ carbon footprints presents an opportunity.
“Almost all of these should be replaced by battery systems which are lower carbon, lower total cost and create a far better work environment for operators,” Avid Larizadeh Duggan, who leads TVG’s investing in Europe, the Middle East and Africa, said in a statement.
Ms. Larizadeh Duggan said Teachers also sees a chance to put Instagrid in touch with its portfolio companies in real estate, infrastructure and other sectors that might use its products.
Investments in climate-focused technology are a growing priority for TVG, which manages about $7-billion in assets and typically backs tech companies that are moving past their startup stage and looking for funds to help them grow more quickly.
As leading entrepreneurs turn their attention to solving climate problems, “we think that climate-tech offers a fantastic opportunity for venture returns whilst also enabling us to play an important role in driving the energy transition,” Ms. Larizadeh Duggan said in an e-mailed statement.
Teachers was a substantial investor in Stem, Inc., a California-based clean energy storage provider that uses artificial intelligence, providing $200-million in 2018 to finance Stem’s acquisition of projects in Ontario.
And TVG’s investment in Sidewalk Infrastructure Partners, which was spun out of Google parent Alphabet’s Sidewalk Labs project, helped form Resilia, which focuses on upgrading power grids to make them more reliable and efficient.
Instagrid’s existing customers include Swedish-based construction giant Skanska AB, Swiss Federal Railways and the Red Cross. And Instagrid was chosen to join an initiative funded by Disney DISN and Netflix to replace diesel generators on film and television sets. The company is preparing to launch a larger-scale product that it claims could power entire construction sites or film sets, with no emissions.
“We are thrilled to be joined by two leading global investors whose support will enable us to expand our global footprint,” Andreas Sedlmayr, Instagrid’s co-founder and co-chief executive officer, said in a statement.
Existing investors in Instagrid, including Energy Impact Partners, SET Ventures, Blueworld.group and High-Tech Gründerfonds, also contributed to the funding round, as did the chair of the company’s advisory board, Pierre-Pascal Urbon.
OTPP issued a press release on how Instagrid raised $95mn and enters the North American market:
- Series C round led by Teachers’ Venture Growth (“TVG”) as part of climate tech strategy
- Company well-positioned to capitalise on huge, growing demand for clean portable power
Stuttgart, Germany - 23 January 2024: Europe’s leading provider of high-performance portable battery systems, Instagrid, today announces a Series C funding round of $95 million. The round was led by Teachers’ Venture Growth (TVG), part of the C$250bn Ontario Teachers' Pension Plan, with participation from Morgan Stanley Investment Management (MSIM) 1GT climate private equity strategy. Existing investors Energy Impact Partners, SET Ventures, blueworld.group, and High-Tech Gründerfonds, as well as the chair of the advisory board, Pierre-Pascal Urbon, also contributed to the round.
Instagrid more than doubled revenues in 2023 and will use the funding to continue its growth by entering the North American market, increasing production, and expanding its range of mobile power solutions to decarbonise off-grid power.
Providing a sustainable alternative to the fossil fuel generators used to power mobile work in construction, film, events, and emergency services, Instagrid has shipped close to 30,000 units of its flagship product in 29 countries since it launched two years ago. With strong demand for clean mobile power solutions expected to continue, backed by supportive policy developments in both Europe and North America, there is a large opportunity set and a mature addressable market for Instagrid’s technology. As part of its North American expansion, Instagrid has hired US CEO, Rich Romer, and plans to open offices, hire across divisions, and launch new products for use in the United States and Canada.
Instagrid co-founder and co-CEO Dr Sebastian Berning:
“Our innovative products have already proven themselves in the market to customers across Europe, and the environmental and health benefits of our portable batteries over combustion generators have been demonstrated. Thanks to our unique, proprietary technology, we are sector-leading and peerless in terms of reliability, power, and durability. Our products are significantly more compact, powerful, and mobile than other battery systems. Securing funding from such long-term strategic and experienced partners reflects our strong momentum and will enable us to build on the technology that underpins our success and bring more category-defining products to the market in the near future.”
Instagrid co-founder and co-CEO Dr Andreas Sedlmayr:
“We founded Instagrid to decarbonise off-grid power and make it available to anyone, anywhere, anytime. Having worked for several years in the battery industry, we saw a crucial gap in the market - numerous portable batteries catered to camping and leisure, but what was missing was a powerful and scalable portable battery solution for professionals. Our customers are leading the way by replacing their combustion generators with Instagrids to increase efficiency, cut down operating costs, and provide pollution-free workplaces. We are thrilled to be joined by two leading global investors whose support will enable us to expand our global footprint by putting our technology in the hands of even more people.”Avid Larizadeh-Duggan, Senior Managing Director and Head of TVG in EMEA:
“More than 50 million small, non-road combustion engines are built each year – almost all of these should be replaced by battery systems which are lower carbon, lower total cost and create a far better work environment for operators. Instagrid is making this transition possible, for the first time, by engineering battery systems which outperform the peak power of gas generators, making renewable energy accessible to businesses en masse. We have seen that Instagrid’s customers love the product and we are excited about the opportunity for Instagrid to work with our real estate, infrastructure and other portfolio companies to help them decarbonise operations in a meaningful way. We’re delighted to partner with Sebastian, Andreas and the team and to welcome Instagrid to our portfolio.”
Vikram Raju, MSIM’s Head of Climate Private Equity Investing and 1GT:
“Reducing emissions in highly CO2 intensive sectors like construction and logistics are squarely in focus for Morgan Stanley’s 1GT fund. With Instagrid we are fortunate to have found the opportunity to back a visionary team with a game changing technology and a compelling growth trajectory. We are very pleased to join the Instagrid family, along with our partners TVG, and bring Morgan Stanley 1GT’s sustainability enhancing capabilities to support the company on the next phase of their promising journey to revolutionise the way construction and logistics are powered.”
As part of the investment round, Kieran Mahanty, TVG’s climate lead for EMEA, will join Instagrid’s Board.
Instagrid's flagship Instagrid ONE is lightweight and mobile enough to be used in the most remote locations and powerful enough to match the performance of the grid, making it possible to use electricity from renewable sources in any location. On a single charge, the Instagrid ONE portable battery is powerful enough to run welding equipment for an entire day’s work, pump over 55,000 litres of water with a large submersible pump or cut through hundreds of metres of concrete with heavy duty equipment, as well as a host of other commercial applications.
Instagrid is building on their proven technology to offer a full range of mobile battery solutions. Their upcoming large-scale system will power entire film sets or construction sites at a fraction of the size and emissions of comparable systems. Instagrid products boast zero exhaust emissions, as well as up to 97% lower carbon footprints and 82% lower lifetime costs compared to generators.
Instagrid customers span sectors including construction, film industry, events and media, and emergency services. Notable instagrid customers include Skanska, Loxam, Swiss Federal Railways, and the Red Cross. Instagrid is also part of the Clean Power Mobile Initiative, funded by Netflix and Disney. Users can also rent an Instagrid unit at locations across Europe.
To date, Instagrid has raised more than $145mn. Additional existing investors include Segnalita Ventures and Wille Finance AG.
You'll recall Ontario Teachers' appointed entrepreneur and venture capitalist Avid Larizadeh-Duggan to serve as the managing director of its Teachers’ Innovation Platform in Europe, the Middle East and Africa a little over two years ago:
In the new role, Larizadeh-Duggan will lead efforts to focus the platform on late-stage venture and growth equity investments in leading-edge technology companies based in the region.
In a LinkedIn post, Larizadeh-Duggan expressed her excitement about the TIP. “Found it! A platform I can help grow to back bold and visionary innovators who generate superior returns and measurable positive impact on people and planet. [I’m very] excited to be part of the team!”
An experienced entrepreneur and angel investor, Larizadeh-Duggan is best known for her work as the chief operating officer of the Kobalt Music Group. More recently, she served as a non-executive director of Barclays Bank. In 2016, she was named as a young, global leader by the World Economic Forum. In 2019, she was named as an officer of the Order of the British Empire.
She also has top credentials:
Avid Larizadeh Duggan, OBE, is a Senior Managing Director of Teachers’ Venture Growth (TVG). Avid has been active in the startup ecosystem as a developer, product manager, founder and investor for over 20 years. Prior to TVG, she was the COO of Kobalt Music Group. She started her investing career at Accel Partners and was a General Partner at GV. Avid is a non-executive director on the board of Barclays Bank UK and serves on the Harvard Business School European Advisory Board. She has been recognized as a Young Global Leader by the World Economic Forum and was appointed Honorary Officer of the Most Excellent Order of the British Empire, for services to the economy, business and education. Avid earned her B.S. and M.S. in engineering at Stanford University, where she was a Mayfield Fellow. She also holds an MBA from Harvard Business School and is a Kauffman Fellow.
Stanford engineering, Harvard MBA, a Kaufman fellow, she's definitely no slouch!
I have a friend of mine out in Silicon Valley with similar credentials (maybe not as good but up there) working as an SVP at a big tech company and when it comes to tech and VCs, he's scary smart.
The first thing he told me three years ago is that "hedge funds ruined venture capital" and when the cycle turns south, it's going to get really ugly.
Another case of "too much money with too few brains chasing too few opportunities."
Teacher's Venture Growth (TVG) has had some solid success like SpaceX which I believe will become Elon Musk's most valuable company, much more valuable than Tesla and potentially make him the world's first trillionaire (not that he needs the title):
TVG has also had some bombs, like investing in FTX which turned out to be a disaster and a valuable lesson in conducting proper due diligence.
This latest series C investment in Instagrid is very interesting and has attracted an investment from Morgan Stanley Investment Management through its climate-focused private equity fund, 1GT.
Instagrid provides advanced portable batteries that break the mould. No more generators – just powerful, sustainable and reliable power on demand:
It only weighs 20 kg and has a long runtime of 2.1kWh which can power up all day.
If successful, Instagrid's portable energy battery will make gas powered generators a thing of the past.
So, for a $95M funding round which is peanuts for Teachers', you bet they're taking a position early on here.
Again, just to be clear TVG manages $7 billion of the total $250 billion which is roughly 3% of the total portfolio.
Why do Teachers' and other large Canadian pensions invest in venture and growth capital?
Because they can afford to make a series of diversified bets and if one pans out huge, they will make stellar returns getting in there early.
That's the nature of the VC beast, you make roughly 30-40 bets and if 1% or 2% pan out huge, you're in business.
It's a bit like investing in biotech shares, 95% will end up penny stocks but the 5% that make it huge, well, you're laughing all the way to the bank!
Alright, in related VC news, former CPP Investments CEO Mark Machin has teamed up with former OMERS' Ventures executive Mark Shulgan to form Intrepid Capital, an AI growth fund:
Ex-Canada Pension Plan Investment Board chief executive Mark Machin and a former senior lieutenant are raising a US$500-million growth capital fund to back artificial intelligence startups in Canada and abroad.
Intrepid Growth Partners is led by Mr. Machin and Mark Shulgan, who worked together at CPPIB when Mr. Shulgan co-founded and led the pension fund’s growth equity unit from 2009 to 2018. Their new fund seeks to invest in fast-growing AI companies that have reached US$10-million in annual sales and are on a path to achieve profitability.
The firm will look to lead investment rounds, committing US$30-million to US$50-million per initial financing per company. The pair have hired principal Grant Wallace, who was previously an associate at Ontario Municipal Employees Retirement System working under Mr. Shulgan, who led the pension fund’s growth equity unit until last April. They plan to name another partner in the near term.
Intrepid is hoping to raise about US$200-million in a “first close” for the fund by mid-year, which would allow it to start deploying capital into deals.
Intrepid’s leaders are betting that AI has reached an inflection point, particularly after the arrival of OpenAI’s ChatGPT in 2022, and will be a hugely disruptive force across the global economy, changing everyday life and business. “Machine learning and AI will be at the core of every industry,” Mr. Machin said in an interview. “It’s going to permeate everything for the next decade or more and it’s something that I’ve been passionate about. And I think there are extraordinary opportunities.”
Mr. Shulgan said: “Investing in AI positions us to partner with the next generation of companies that will transform industries and shape the future.”
You can read the rest of article here, wish them both luck, it's a very tough space.
Alright, let me wrap it up as I went to see my neurologist at the Montreal Neurological Institute two days ago and caught a bad cold/ flu or god knows what else (I hate going to germ infested hospitals).
Yesterday, Teachers' announced its latest strategic acquisition in the French logistics market – a 165,000 sqm portfolio of five, fully-let, logistics assets. The transaction marks the JV’s second investment in France, after the acquisition of a standing asset and development plot in Paris in 2023.
You can read that press release here and it seems like the Cadillac Fairview global investment team has integrated well into Teachers'.
And last but not least, Teacher's recently announced some executive appointments following the departure of Ziad Hindo, their former CIO:
Ontario Teachers’ Pension Plan Board (“Ontario Teachers’”) today announces the following appointments of three longstanding Investments leaders into new executive roles, effective immediately.
Stephen McLennan and Gillian Brown into Chief Investment Officer roles focused on portfolio construction and alpha generation, respectfully.
- Stephen McLennan is appointed Chief Investment Officer, Asset Allocation. Stephen will oversee Ontario Teachers’ overall asset mix to drive total fund performance, management of portfolio risks, and approach to strong governance and investment practices. Stephen has been serving as Acting Head of Investments since September 2023 following the departure of former Chief Investment Officer Ziad Hindo. Stephen joined Ontario Teachers' in 2003 and has held positions of increasing responsibility, most recently leading the Total Fund Management department. He holds a Master of Mathematical Finance from the University of Toronto, an MBA from the University of British Columbia, and a Bachelor of Commerce from McGill University. Stephen serves on the board of Cadillac Fairview, a wholly owned subsidiary which is part of Ontario Teachers’ Real Estate portfolio.
- Gillian Brown is appointed Chief Investment Officer, Public & Private Investments. In this role, Gillian will be accountable for the execution and management of investments across public and private markets through Ontario Teachers’ Equities, Infrastructure & Natural Resources, Teachers’ Venture Growth, Capital Markets, and Real Estate investment departments. Since joining Ontario Teachers' in 1995, Gillian has held progressively senior roles, most recently as head of the Capital Markets department since 2018, overseeing cross asset liquid total fund exposures and active risk taking in credit and absolute return asset classes, as well as a centralized trading function. She holds a Bachelor of Commerce from McGill University and serves on the board of Canada Guaranty, one of Ontario Teachers’ Private Capital portfolio companies.
Jonathan Hausman into a newly established, cross-enterprise strategy role:
- Jonathan Hausman is appointed Chief Strategy Officer. In this role, he will lead a cross-organizational approach to advancing the strategic objectives of the Plan. He will oversee Ontario Teachers’ Sustainable Investing activities and continue to lead its Global Investment Strategy (GIS) department, which builds conviction on responses to global shifts, including those related to geopolitics, sustainability, and technology. He will also proactively partner across the organization to manage Ontario Teachers’ relationships and reputation across stakeholder groups worldwide. Jonathan joined Ontario Teachers’ in 2004 and led Alternative Investments and Global Tactical Asset Allocation, before taking on the role leading the GIS department in 2017. He holds a Bachelor of Arts from McGill University, an MSc. in Economics from the London School of Economics, and a Master of Public Administration from Columbia University. He is the Chair of the Canadian Council for the Americas and a Senior Fellow at the Munk School of Global Affairs at the University of Toronto.
“I am pleased to appoint Stephen, Gillian to their new leadership roles in Investments, and Jonathan to a new role to support me in managing our key stakeholders and refreshing and advancing our enterprise strategy on a regular basis. They will all join the senior Executive Team,” said Jo Taylor, President & CEO, Ontario Teachers’. “These appointments confirm the benefits of our focus in developing team members and shaping strong leaders from within the Plan. Stephen, Gillian, and Jonathan, each bring decades of experience across the organization, and expertise in both capital allocation choices and international public and private markets anchored around a deep commitment to our pension promise. I am confident that we will be well-positioned to continue to create value for members as we execute our strategy under their leadership.”
Nick Jansa, Executive Managing Director, has also been appointed to Ontario Teachers’ Executive Team. Nick joined Ontario Teachers’ in 2020 and leads investment and portfolio management activities in the EMEA region and is based in London. Prior to joining Ontario Teachers’ he spent almost 25 years at Deutsche Bank.
“Nick recently joined the Executive Team as part of a senior team rotation process and we greatly benefited from his global expertise and perspectives,” added Mr. Taylor. “Given the significant scale of our portfolio and office footprint in global markets, I have asked Nick take on this role on a permanent basis to ensure that international perspectives and understanding are more formally embedded in all our discussions at the most senior level.”
Let me publicly congratulate Stephen, Gillian, Jonathan and Nick for these nominations.
In essence, Ziad's role was replaced by three people but given the size of the fund, it makes sense and each person will have a critical role, especially Stephen and Gillian but Jonathan too.
Alright, coughing like crazy, my head is pounding and my body is achy all over, and my wife gave me explicit orders to stay the hell away from the baby (he's terrific, has grown very fast).
Below, take the time to learn more about Instagrid through this clip featuring co-founder and co-CEO Dr. Sebastian Berning.
And co-founder and co-CEO Andreas Sedlmayr pitches Instagrid at Ecosummit Berlin 2023 and gives an update on their innovative mobile batteries for professionals and impressive growth. Founded in 2018 in the South of Germany, the smart green startup has more than 120 employees and expands into the US this year. Instagrid is backed by Blueworld Group, SET Ventures and Energy Impact Partners.
I see this company growing by leaps and bounds over the next decade, great investment by TVG.
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