Telstra Ventures leads $33m raising for Swiss renewable energy trading platform Pexapark

Rapidly rising carbon levels are ‘frightening the living daylights’ out of Telstra’s venture capital arm. Here is what the fund is doing about it.

Founded in 2017, Pexapark, has so far struck more than 30,000 megawatts of renewable PPA transactions across 19 markets.

Telstra’s venture capital arm is deepening its exposure into tech companies fighting climate change, leading a €20m ($33m) capital raising for a Swiss renewable energy trading platform.

Telstra Ventures unveiled its newest investment on Tuesday, Zurich-based Pexapark, a tech start-up that provides software and advice for buying, selling and managing renewable energy.

It comes a year after Telstra Ventures – which has more than $1.3bn in funds under management – completed a $500m raising to invest in environmentally-focused companies and support net zero opportunities.

Telstra Ventures partner Albert Bielinko.

Telstra Ventures partner Albert Bielinko said Pexapark was a global leader in energy risk management software for investors in renewable energy, as well as the “leading source of market intelligence” for renewable power purchase agreements or PPAs.

PPAs are a long-term agreement to purchase clean energy from a specific asset at a predetermined price between a renewable developer and a consumer.

“Signing PPAs is crucial to ensure new renewables projects can be financed and Pexapark provides a critical service that makes this process more efficient,” Mr Bielinko said.

“As the world transitions to renewables, and government subsidies are gradually removed, we believe Pexapark’s services will be indispensable. Pexapark also has an iconic team who structured the first PPAs in Europe many years ago.”

Pexapark, founded in 2017, has so far struck more than 30,000 megawatts of renewable PPA transactions across 19 markets and is planning to launch in Australia and the US.

The latest raising follows Pexapark completing a series B funding round in July last year, injecting €14m into the company across two phases, which at the time brought its total equity investment to €19m.

Series B investors included S&P Global Commodity Insights, which includes S&P’s Platts price benchmarks, and Fluence, an energy storage and digital applications leader. The company also secured the second half of a loan guarantee from the Swiss government’s Technology Fund, underlining Pexapark’s role in contributing to the energy transition towards net zero.

Mr Bielinko said Pexapark‘s growth was directly tied to the broader transition from carbon to renewable sources of energy.

“The company leverages its deep expertise in PPAs to cater to smaller companies that lack internal expertise yet have a significant potential to participate in PPAs.”

Renewable energy projects have come into sharp focus after power and fuel prices surged following Russia’s invasion of Ukraine in February last year, as more countries look to wind, solar and other green sources to augment supply and energy sovereignty.

“Pexapark‘s mission is to improve renewable energy sales by facilitating the PPA process and offering renewable energy investors a turnkey solution to manage energy sales and financial risks of their assets,” Mr Bielinko said.

“According to Bloomberg New Energy Finance, 19.5GW of wind and solar capacity worldwide was traded through PPAs in 2020, up 44 per cent from 2018. However, calculating the fair value of these long-term, often bespoke PPAs, is a challenge facing developers, traders, and offtakers alike.”

Telstra Ventures’s other green investments include OpenSolar, which provides software to contractors to design a solar panel installation and provide customers with accurate performance data – including estimated savings from switching to renewable energy

Telstra Ventures managing director Matthew Koertge said “rapidly rising carbon levels are frightening the living daylights out of us”.

While Telstra Ventures has been scouting the market for green tech companies, managing director Matthew Koertge has stressed repeatedly that Telstra Ventures was not becoming a climate fund.

“Our thesis is that the rapidly rising carbon levels are frightening the living daylights out of us,” Mr Koertge said last September. “This is just so important and many companies are starting to recognise that urgent action is needed. There’s likely to be 1000 unicorns of companies that will potentially address that opportunity and hopefully there will be strong investment returns on the back of that as well.”

Pexapark chief executive Michael Waldner said while the renewable energy market was experiencing “significant and sustained growth”, investors face a “complex set of challenges”.

“From market opacity to price volatility and regulatory pressures. In this dynamic landscape, possessing both market intelligence and energy risk management capabilities has become absolutely critical,” Mr Waldner said.

“These capabilities are crucial not only for competitively pricing energy but also for safeguarding capital by effectively managing exposure to market risks.”

“This fresh injection of capital takes us into the next exciting phase of our mission to equip renewable energy players around the globe with the expertise, processes, and systems to thrive amid evolving market dynamics.”

Mr Waldner said the company planned to capitalise on the global presence of Telstra Ventures as well as other investors who joined the €20m raising, including Swisscom Ventures and A&G Energy Transition Tech Fund.

He said all parties held extensive technology investment portfolios across Europe, US, Asia, Australia, and Latin America – key markets in which Pexapark aims to expand its team and offerings to meet global demand.