We are excited to announce we have led the €20M Series C investment round in Pexapark, a pioneer in renewable risk management software and data for Power Purchase Agreements (PPAs), which are critical to the energy transition.
Titanium Ventures believes that investments in climate technology companies have never been more critical to support a mammoth transition from fossil fuels to renewable energy sources. McKinsey predicts that renewables production will increase from 7,800 TWh to 77,400 TWh between 2020 and 2050, an astonishing 10x increase. Whilst Government subsidy programs have been instrumental in bootstrapping renewables (as in the case of the Australian solar industry over a decade ago, leading to one third of Australian homes having rooftop solar), over time such subsidies are being phased out. This is exposing market participants to the extreme volatility of electricity prices. German electricity prices recently increased almost 4x year on year! Energy risk management capabilities and data become critical as renewable energy investors become participants in the traded energy markets and need to dynamically understand how their portfolio responds to scenarios.
In response, Pexapark provides solutions that encompasses software, data and advisory services to facilitate the entire energy trading and sales workflow from price discovery to analytics, execution and monitoring. Pexapark created the industry’s trusted Price Reference Platform, PexaQuote, to bring increased transparency and liquidity to renewables PPA market. A PPA is an agreement between an independent power generator (vendor) and a purchaser (offtaker) for the sale and supply of energy. They are often 10 year supply agreements for solar and wind energy and help ensure debt financing can be secured to construct these assets. Despite being large deals, there is significant opacity in these markets. Closing them faster will help the energy transition. Pexapark provides market intelligence to 200+ companies and also has robust quant capabilities. PexaOS, the company’s risk management software has also seen unparalleled take up from industry leading investors in renewables like Octopus Energy Generation, Glennmont and Low Carbon. The company has built all of this into a single unified data engine, providing the richest data set and flexibility to answer key questions for investors to understand what if scenarios and portfolio additionality. The company is supported by deep industry relationships, such as S&P, AFRY, and Fluence Energy, with many others in train, and its data is quoted by brokers and leading investment banks. As renewables become the cheapest source of electricity, Pexapark is paving the way for a fully market-based system.
Pexapark, which was founded in 2017, works with customers across the major markets for renewables in Europe and customers are pulling the company to further expand globally. Their solutions have been adopted by leading companies such as Ardian, Brookfield’s CEE Group, CIP, Total Energies and Orsted to price PPAs, analyze hedging decisions, quantify portfolio risks and grow revenues across major European renewables markets. We believe that Pexapark has grown to become the clear category leader with a trusted brand in data, software and services. Pexapark’s founders, Michael, Luca and Florian, are deep industry experts, having negotiated the first PPAs in Europe ~20 years ago whilst executives at Axpo.
With companies committed to buying 36.7GW of clean power through long-term contracts in 2022 according to BloombergNRF, the future of renewable energy looks promising. As more organizations pledge to power their operations with clean power, we believe the demand for Pexapark’s services will only continue to rise. Pexapark is set to illuminate the path to a sustainable, renewable-powered future and we’re thrilled to be their partner with them.