Reshape Energy is using an acquisition playbook to drive energy upgrades for commercial real estate

Reshape Energy is betting on a more integrated approach to accelerate the decarbonization of the built environment. Founded in Munich, Germany back in May 2024, the startup is led by a team with expertise scaling energy businesses, including the German division of Octopus energy and energy price comparison platform Verivox. It’s focusing on selling energy system upgrades to commercial real estate, targeting property owners with portfolios of buildings.

Carbon emissions from heating buildings significantly contribute to climate change. Therefore, accelerating the transition to lower-carbon forms of heat management, such as heat pumps and solar panels, is a key piece of meeting climate goals. Hence why, in Europe, there’s considerable regulatory pressure being applied to building owners to carry out energy upgrades.

At the same time, accessing the specialist skills required to pull off these energy upgrade projects — or even just understand what needs to be done to optimize a particular building — can slow momentum for installing low-carbon solutions.

Reshape Energy is hoping a one-stop-shop model will help to vent some of the friction out of the system — starting in the German market but with its eye on expanding elsewhere in Europe as it scales the approach.

Tackling energy upgrade inertia

“Why isn’t enough happening” was a key question the founders kicked around as they were thinking how to structure a business targeting commercial buildings with energy upgrades, CEO and co-founder Benjamin Stanzl tells TechCrunch.

“We’ve seen a lot of momentum on [energy upgrades for] single family homes … But when you look at commercial real estate, which is really our focus, it’s very, very slow,” he says. “The biggest [competitive] threat is definitely the ‘do nothing’ option.”

The reasons why the sector has been so slow on the uptake are complex, he suggests — it’s not one single missing piece which, say, a new piece of tech could fix; rather it’s the systemic complexity of orchestrating all the various bits needed to successfully deliver such projects that’s holding back the pace of change.

“The complexity of executing these projects is unbelievably high,” he argues. “Commercial property owners just don’t have the expertise. And some of them don’t even want to deal with it, because it’s not their core business.”

Stanzl also points out that construction is a sector that hinges heavily on trust — so a low level of trust can also slow down progress.

The startup is taking on this energy upgrade inertia via an acquisition model that sees it buying existing companies in the sector to bring key capabilities and customer relations in house — powering up an energy-optimization-as-a-service offering.

The idea is to cover all stages of a project — from initial assessments and determining what’s needed, to installation of the new systems and ongoing servicing and maintenance. It also includes financing when customers want to spread the up front cost of installing new energy systems.

By covering the full chain of what’s required for an energy upgrade, the startup believes it can unlock efficiencies of scale while also leaning into (and leveraging) trusted customer relationships. It is breaking out of the siloed workflow that more typically characterizes the sector, per Stanzl.

He says the startup has picked up some more piecemeal energy upgrade project work so far, attached to the capabilities it has brought in house. But the idea is to continue to expand what it can offer and work towards taking on projects with many moving parts and much higher complexity — say, such as district heating installations — as they continue to build out the business.

Funding injection

Reshape has already made some acquisitions to build out its offering. More are on the cards — and the company will be using some of a new €5 million funding round for this purpose, its first external capital raise.

By buying up smaller, often regional companies it can shortcut customer acquisition and plug into relationships and contacts these other businesses have amassed over the years, as well as onboarding key skills to deliver projects. An acquisition model also gives it full control of where and how skills are deployed, says Stanzl.

“Over the life of these businesses, they’ve served hundreds if not thousands [of customers],” he notes of the businesses Reshape has brought in house. So far, it’s picked up an energy consulting business and a commercial solar planning, installation and maintenance company.

“The control piece is critical, because we do need these companies all to work together — and we need them to use common systems and common technology,” he adds, sketching out their strategy to unlock efficiencies in project delivery by pooling trust and risk.

The founders are putting their money where their mouth is, contributing some of their own funds to the €5 million raise, which is being loosely labelled as a seed round. Although Stanzl says they’re not convinced that a typical venture funding model is for them, other approaches, such as Private Equity, might be a better fit, he posits.

Other investors in the round include PostScriptum Ventures, Vireo Ventures, and some unnamed industry insiders.

Different models

Germany has seen a boom in energy upgrade startups in recent years, following Russia’s invasion of Ukraine in 2022 and the resulting spike in gas prices. But the first wave of energy upgrade activity — much of which focused on single family homes — that followed that shock has “definitely calmed down,” says Stanzl.

Players in the space have more incentive to get out of their lanes and take a more joined up approach to delivering the next wave of upgrades, he says. In turn, it enables tackling more complex challenges like commercial real estate upgrades.

“You cannot deploy heat pump if you don’t know what the electrical infrastructure of a building is, right? And if you do it, all of a sudden you may promise your customer a whole bunch of savings and then they come back and you realize they need to upgrade their transformer or something like that. Then all your savings are out the window,” he suggests.

“So I think a number of people are realizing that if they just sort of focus on their little silo it’s just not enough anymore.”

Reshape’s model of offering energy optimization services to building owners looks more capital efficient than some other approaches — such as those that involve buying up real estate to transform via modernizing its energy infrastructure.

German startup Reneo, for example, recently closed a €600 million funding round for building out another decarbonization play but which involves it buying up target real estate to improve. Though, on the flip side, Reneo’s ownership model means it is positioned to benefit from any increase in real estate value — whereas Reshape remains purely a service provider, but with far lower capital requirements to spin up its business.

Stanzl says as they were developing the business they did consider taking on property ownership — which would have meant needing to do things like property and tenant management services, too — but they decided it was not core to the energy transition mission. He also points out that commercial real estate owners may not want to sell their buildings — which would have created barriers to scaling.

Another element that’s often associated with energy transitions is upgrading building insulation as better insulation can be a boon to energy system performance. Asked about this, Stanzl says that while they can provide it they don’t “necessarily seek it out” — again, since it may amp up project complexity.

They have also categorically decided against involving themselves in cosmetic improvements to buildings.

“We’re energy focused, right? We want to look at the energy infrastructure and the energy fabric,” he emphasizes. “So the issues [for target customers] are more … how can we use the waste heat? How do you optimize that, along with the cooling loads — less so around ‘how do you insulate the walls?’”