"We want to scale our impact"

With a financing round just completed behind him, Ecoligo founder Martin Baart wants to take the next step and accelerate the fight against climate change. Time is of the essence.

Martin Baart is on the move. At the end of last week, he was proud to announce that his start-up Ecoligo had raised ten million euros in his Series A financing round. Now it's straight onto the plane to Madrid for the founder to further exchange ideas with his new investor. Because there is a lot to do: Ecoligo finances the energy transition in developing and emerging countries via crowdinvesting in Germany. And there, the transformation of the economy is often still in its infancy.

You are trying to finance the construction of photovoltaic plants in developing and emerging countries with the help of private investors from Germany. Why don't you concentrate on Europe first? That would certainly be easier.

Because we can solve a financial market problem in countries in Africa, Asia and South America with our start-up. Companies there have a very hard time getting loans. For one thing, the lending processes are very complex, and for another, the interest rates are high and the terms are short. But infrastructure projects, such as the construction of solar plants, often take longer than two to four years. That's why we try to organize the money from here.

How does that work?

We organize the construction and maintenance of solar plants for our corporate customers on site. They then pay us for the electricity generated for a certain period of time. In the end, they also use it to purchase the solar cells on their factory floor. Companies in countries such as Kenya, Vietnam, or Panama thus have the opportunity to obtain green energy. They make themselves independent of the power supply in their country, which is often not good. We finance all of this through impact investors here in Germany.

To do this, you first have to find companies in the countries that can also manufacture solar systems in the quality you want.

Exactly, that's a pretty big challenge. We have local employees in the countries where we are active who are constantly looking for suitable partners. Before we work with a local manufacturer, he has to go through a qualification process. For example, he must have enough well-trained staff and be familiar with the regulatory requirements.

Why are local banks not interested in financing such projects?

Because bankers there often haven't really got to grips with the technology. It's similar to what happened in the financial industry in Germany maybe 25 years ago. Those who don't understand the potential and misjudge the risk only offer loans at much too high terms. But there are already training programs from Europe for bankers there, so understanding is increasing.

Don't you then have to worry about your own business model?

I don't think so. The potential there is huge, and corporate demand is very high. In addition, we offer our corporate customers a secure financing model, because we also take care of maintenance, insurance and operations management. If a spare part is needed, we replace it immediately, at no further cost to the customer. With a bank loan, customers would have to continue repaying the loan even if the solar system stopped running and thus no longer generated any savings.

Why are you focusing primarily on German private investors rather than institutional ones?

We deliberately offer investments via our platform from as little as 100 euros in order to offer sustainable investments to as many people as possible. We also see the extremely high demand for impact investments from private individuals. However, institutional investors can participate with us in the same way. Often, these investors take over a large part of the financing of a single project, and the rest of the required sum is provided by our impact investors.

Who are the private investors who participate in your projects via crowdinvesting in Germany?

We basically have three different types of investors. First, there are very young people who invest a few hundred euros and also only have a small overall portfolio. Then we have many investors between 35 and 50 years of age, we call them renewable professionals. They sometimes invest in the four-digit range. And then, of course, we also have the classic impact investors, who invest up to 25,000 euros. In the meantime, we have so many projects going on at the same time that we can also serve institutional investors.

If things are going so well with crowdinvesting, why do you need another round of financing?

We now want to scale our impact. To do this, we want to expand our market lead in the existing markets, enlarge our teams, bind customers more closely to us. In addition, only customers with a German account can invest via Ecoligo.investments at the moment; we want to expand this to Europe. We also want to make Ecoligo attractive for family offices. It is also important for us to expand our digital platform. So far, you can see on our site how much CO2 has been saved in total across all projects. In the future, however, we want to make it possible for each of our private investors to see exactly how much impact their current investment is generating.

FRV-X has invested ten million euros. What are you hoping for from your new investor?

FRV-X is the innovation division of the global solar equipment manufacturer FRV. We are both a very good fit. FRV is already active in the markets in which we are also represented. In addition, FRV is a company that can support us not only with capital, but also with know-how and a wealth of experience. They share our vision 100 percent, namely to advance the energy transition there. That was extremely important to us, because we are fighting against the biggest crisis of mankind, the climate crisis.

Many startups are having a hard time getting venture capital this year. How long did it take you to find a suitable backer?

It took a good nine months from initial contact to investment. But before that, we already had a few offers from other investors. As a company with a business model that can grow sustainably even now in the crisis, it is not that difficult to obtain financing. We are currently experiencing a long overdue market correction. It was absurd the sums that have flowed into some start-ups in recent years.

Thank you very much for the interview.

Personal details: Martin Baart tried in vain for several years to realize solar projects in Africa with local financiers. When he returned to Germany, he and his co-founder Markus Schwaninger turned the tables. With their start-up Ecoligo, they are now soliciting urgently needed funds in the Federal Republic.