Hi, Marco! Once again, congratulations on your deal with General Atlantic. So how have the first months of the cooperation been?
Thanks so much! The first months of working with the GA team were absolutely great. Especially the exchange on the strategic level is inspiring and significantly moves us ahead. The organizational expansion is rapidly picking up steam. But not only this area, also in terms of the strategic direction and the ongoing internationalization of the company, General Atlantic has supported us tremendously in recent months.
powercloud has been a sensational success story, establishing itself as the software platform for the German utilities industry and has managed to win highly renowned customers. How has the company gotten to this point?
We at powercloud started with the intention to digitize the utility processes. The digitization of the industry is impossible with the old monolithic systems that utilities have used and many of them still use today. To remain competitive, utilities must shift their focus to the customer and offer comprehensive digital services. The market pressure is increasing year after year which is playing into our hands.
The actual breakthrough happened three years ago when we were able to convince EnBW to migrate from SAP IS-U to the powercloud platform. All milestones were realized in time, meaning the EnBW core brand has now been fully migrated to powercloud as well. During the course of the project, powercloud´s range of services was expanded to become a full ERP cloud solution enabling utilities to manage all processes in the supplier market role from ERP, regulatory processes, billing, contract management and customer management via the platform.
Previously, we mainly serviced energy start-ups and discounters. At present, we are developing the market role of metering point operator. To sum it up, the cooperation with EnBW was and still is groundbreaking for us. As we were able to greatly boost powercloud´s performance and with no comparable solution in the market, inquiries by E.ON and EWE, both of which are currently in the migration process by the way, quickly followed. With the successful merger of E.ON and Innogy, we will serve nearly all major utilites in Germany. Talks with additional major municipal utilities are also ongoing. These positive developments have doubled our revenues on a yearly basis in the last couple of years. However, I am confident this is just the beginning of powercloud´s success story.
When and how did the idea of powercloud came up? What is the clear-cut USP in comparison to existing systems?
After graduating I immediately founded Intellishop AG providing an online shop system. I knew early on that I wanted to set up my own company. As my father is an independent property developer the founder gene is already in the family. At the same time I also earned a degree in Business Administration which I was never really passionate about though. My main focus has always been the product vision. After the first successful years the desire to start something new emerged. After the successful exit in 2010 I founded several other companies, one of them was powercloud in 2012. I realized early on we could create something special because our software is structured totally different than conventional products and is able to react according to highly individual requirements. This makes powercloud the first cloud platform for the energy industry´s core processes.
Unlike all previous software solutions, where the meter is the focal point, powercloud focuses on the customer. Additionally, we map nearly all processes as lean and optimized standard processes, which significantly reduces maintenance. Therefore, giving our modern digital platform solution a tremendous edge over conventional systems in terms of cost as well as speed and quality which was also quickly recognized by the utilities. The increasing digitization pressure certainly benefits us here.
After the first very successful years, the idea to bring an investor on board emerged. What was your motivation? What exactly did you expect ?
Once the ongoing migration processes are completed, powercloud will be positioned as the market leader in Germany serving a double-digit million of end customer contracts. Therefore, in addition to further growth in Germany, internationalization is clearly the next logical step. As I lack the experience in this area and in further organizational expansion, it was only natural to start looking for a strategic partner supporting this undertaking. The groundwork for the further expansion of powercloud had already been laid. Due to the attractive market situation, it makes total sense to take advantage of resulting opportunities as quickly as possible and to accelerate growth to simply take advantage of the momentum. In the meantime, we have been able to significantly expand our organization and strengthen the management team in particular which gives me the freedom to concentrate on important strategic matters and the product vision.
Why did you choose ox8 Corporate Finance as M&A advisor? What is your take on the collaboration?
Thorsten had already provided me with excellent support as the M&A advisor during the Intellishop exit in 2010. I have known him for almost 10 years now and we became friends during the time. I can call him at any time and discuss strategic issues with him. Because of that great trust and the successful cooperation with him and his team in recent years, it was not a really difficult decision. The deal team has basically known powercloud since its foundation.
The transaction process was excellently managed by ox8 Corporate Finance. The team around Thorsten, Christian and Fabian advised us professionally and passionately, actively supported us in many tasks during the whole process and presented the most interesting potential partners via their international network. Out of the potential partners we chose General Atlantic. ox8 was an important factor in the successful transaction. For me personally, this is the third deal that Thorsten and his team have successfully advised on.
M&A processes are usually very intense phases in the lives of founders. How did you experience the process?
Yes, that´s certainly true! But since I already had some M&A experience I more or less knew what was coming my way. All in all, it was an extremely intense but also very exciting time with many interesting meetings. Besides all the characters on the investor side, I was also able to meet many industry experts which led to very inspiring discussions. Also the time pressure was quite high as I wanted the process to be completed by the E-world trade fair in Essen in February 2019. That timeline might have driven one or the other investor to despair. From dispatching the Information Memorandum to signing were only 6-7 weeks with the Christmas holidays in between. But due to the excellent structuring and perfect preparation by ox8 we were able to complete the process in the most ideal way. Throughout the whole process ox8 supported me perfectly allowing me to fully focus on the most important issues and meetings as well as still concentrating on the operative business. All this would not have been possible without Thorsten and his team.
Why did you choose General Atlantic as your partner? How do you view that decision after the first half year of cooperation?
We were looking for a strategic partner who is able to support us with his global network and expertise. Especially the experience in internationalization processes and the network to potential customers was of great importance for us. There are surely a lot of major software investors that bring a very good package to the table, however, at General Atlantic everything just felt right. Besides the technical expertise, the international setup and its large network, GA is also a great partner on the social level. The cooperation is both very respectful and appreciative. Above all, it was important to me that we were on the same page and pursue the same goal which is absolutely the case with General Atlantic.
powercloud remains loyal to its headquarters in Achern. What are your plans for the years to come?
Yes indeed, I am very attached to my hometown and I am really happy to have found a long-term solution in Achern. After all those travels through Germany and Europe, I am always looking forward to coming home. Achern is and will remain the location of powercloud’s headquarters. We are going to set up an IT campus for around 200 employees on the so-called Illenauwiesen. In addition to the company headquarters, the project also includes 140 apartments and a hotel needed for our business partners. In this regard, it is particularly important for us to offer ideal conditions to our employees. At the same time I am able to fulfill my father’s lifelong dream as a property developer which makes me particularly proud. Alongside Achern as our headquarters we are also expanding our second location in Leipzig.
But our current focus remains on successfully completing the migration projects with E.ON and EWE as well as many other exciting projects we can share insights on in the near future. I am really looking forward to accompany and lead the exciting development of powercloud for many years to come.
