"Waving money alone is not enough"
16.01.2023
The former management consultancy Conenergy has made a change in strategy. In future, the Essen-based company wants to focus on investments in start-ups and transform itself into an investment holding company.
energate spoke to Conenergy CEO Roman Dudenhausen about the reasons and about its role as an investor.
energate: Mr Dudenhausen, Conenergy has separated from its operating companies and is focusing on investments in start-ups. What motivated you to take this step?
Dudenhausen: Over the past few years, we have gone through a process in which we, as the management board of Conenergy, have gradually withdrawn from the operating business of the subsidiaries. At the same time, we have been increasingly active as investors in the market since 2015 and have about 20 direct investments and more than 30 indirect investments via funds. In this respect, the current realignment is a logical consequence of this development. And we now want to consistently drive this change forward. We would like to offer our expertise, entrepreneurial experience, and network to young companies that are advancing the energy and mobility transition.The E-world trade fair, as the central meeting place for the energy industry, will continue to form the nucleus of our network.
energate: As an investor, Conenergy has so far covered a range from direct investments to funds and venture capital investments. What investment strategy are you pursuing?
Dudenhausen: So far, we have deliberately taken a very broad approach to the topic in order to build up a portfolio and also to see what suits us. In this respect, we are also somewhat opportunistic. With some investments, we go directly into the investment and usually get more involved there. Funds in particular have proven very successful for us because they have broad market coverage and give us the opportunity to make many different investments.
We don't have a large team in the background, but we think a lot in networks. From our perspective, having good access to the industry has proven to be a significant advantage, both in terms of finding interesting investments and cooperating partners for founders.Basically, we are not subject to any constraints in terms of the sums we invest. We are also quite opportunistic in this respect.
energate: In which areas do you focus?
Dudenhausen: We like to move into topics in which we have expertise. That's why Conenergy's focus is clearly on energy and mobility. That is already broad positioning. The topic of electromobility 2.0 is currently occupying us a lot, especially in the areas of fleet management and software. Basically, we feel comfortable with asset-light approaches that don't require a lot of hardware. The hardware issue, at least when it comes to charging infrastructure, has been dealt with in our view anyway.
We see another exciting topic in the area of flexibility management, including vehicle-to-grid or algo-trading solutions. In our opinion, the area of energy efficiency solutions also offers opportunities, because the market potential remains high.But our involvement with X-Links also shows that we are also open to major challenges and projects in the energy transition.
energate: As an investor, you also have to bring certain qualities to potential investment targets. What can you offer?
Dudenhausen: It's true, that waving money around alone is not enough. Startups also carefully consider which investors are best for them.I am convinced that we have a very interesting track record. As already mentioned, we have been active in the investment sector in Europe and the US since 2015 and have built up a strong portfolio since then. What is certainly another factor is that unlike many other investors who come from the financial world, we bring entrepreneurial experience that can be helpful for founders. In addition, through our network we can open doors not only into the energy sector, but also into industry and the mobility world. That is often invaluable, especially for start-ups.
energate: How do you basically assess the market when it comes to investment opportunities and participations?
Dudenhausen: The market has undergone a certain amount of consolidation in the past crisis-ridden years, and that is a good thing. Much of what is not good is just disappearing by itself. Or to put it another way, while quantity has decreased, quality has increased. One consequence of this is that start-ups now have to be able to show the light at the end of the tunnel much earlier. Marketing an idea is no longer enough. Rather, it must be foreseeable sooner that the business model can generate revenues. That makes the market much healthier.
energate: The established energy industry still has a hard time in some places when it comes to adopting new business models. How can the industry leverage the innovative potential?
Dudenhausen: I am convinced that the successful solutions for all the new business areas in digitalization, flexibility and fleet management will not come from the traditional energy industry itself. But the solutions will come. The sooner the energy industry gets involved and cooperates with the innovators, the better the companies will succeed in positioning themselves in the long term. Of course there are also competitive situations with the new players in the energy market, but there are examples of successful cooperation. Basically, the willingness to cooperate with start-ups and set up use cases has grown recently. But this process is certainly still at the beginning.
The questions were asked by Rouben Bathke.
