The power grid industry is undergoing a major transformation with technology playing a critical role. More companies are leveraging SaaS solutions to optimize and decentralize their power grids. One such company benefiting significantly from this trend is Venios, a German SaaS company that has just hit $350,000 per month in revenue, up from $250,000 per month a year ago.
As they work with over a hundred power grid operators across Germany, the Netherlands, Austria, Switzerland, India, and South America, here’s an insight into how they’ve managed to power over a million substations and why their success can be replicated across numerous sectors globally.
Venios’ SaaS Solution for Grid Operators
Venios is an innovative power grid operating system that provides real-time implementation for grid operators, also known as Distribution System Operators (DSOs) or Distribution Network Operators (DNOs). These are essentially the owners of the local monopoly, utility suppliers that Venios caters to around the world.
The tool is used to optimize and decentralize power grids, a more sustainable alternative to traditional systems. Initially focused on Germany, Venios quickly expanded to the Netherlands, Austria, and Switzerland, and currently has implementations throughout Europe, various South American countries, and India. It’s solving a physical problem globally, derived from the integration of renewables into local infrastructures.
Old Infrastructure vs Decentralized Renewable System
Power grids have traditionally been compared to a champagne pyramid. The process involves filling the pyramid from the top and letting it trickle down, a representation of the old-school, centralized power grid. However, as renewables gain popularity, Venios is initiating a transformation.
The company is helping power grid operators handle the complexity of an infrastructure that gets filled from the bottom, representing a decentralized system. The transition involves the integration of Electric Vehicles (EVs), heat pumps, and decentralized generation, amongst others. In this scenario, the provider needs a clear understanding of the infrastructure’s demand and supply to prevent wastage, and that’s where Venios comes in.
Optimizing Thousands of Substations
Venios charges grid operators based on the number of substations, a term referring to the infrastructure side in the utility domain. The greater the grid, the more the substations, and consequently, the higher the fee. The price ranges from $50,000 to $300,000 per year, determined by the quantity and complexity of the substations.
Small operators could have several hundred substations, while larger utilities in countries like India or the Netherlands could have over ten thousand. Despite the complexity, Venios has managed to implement its solution within less than ten days for up to 10,000 substations, solidifying its stance as a highly efficient service provider.
High Customer Retention and Growing Prospects
Since Venios started operations ten years ago, it hasn’t experienced any customer downgrades or cancellations. This is primarily because of the company’s approach to dealing with larger customers, which typically involves starting in one region before moving on to others.
Once a region integrates Venios’s solution, it’s relatively cheap to grow into the infrastructure due to their high return on investment of less than one year. This substantial value proposition ensures customer retention. Currently, the company serves approximately a hundred power grid operators, influencing over a million substations. They anticipate this number to double in the near future, which aligns with their plans to double their team size in the next 12 months.
Venios’ Path Towards Financial Growth
The SaaS provider values financial efficiency and has been more or less bootstrapped with an investment of less than a million into the company. The current monthly revenue points towards a $5m ARR. The company is considering raising between $2-4 million to accelerate its market entrance further. A $40-50 million valuation is what they’re aiming for.
They’ve managed to be profitable with just 33 full-time employees, achieving an annual revenue of $150,000 per employee. They’re confident of breaking the $400,000 per month barrier in revenue as they continue to expand in countries across the globe.
Favorite Book: “Zero to One” by Peter Thiel.
CEO he’s following: Elon Musk
Favorite online tool: Excel
Balance: about five or six and a half hours of sleep. They are 43 years old, not married, and have two children.
What does he wish he had known at 20? “Founding a company is not about the right idea, its about the will to form markets”