A Company of high expectations — Cleantech Invest — is a risk investment

This is an unofficial translation by Cleantech Invest of Talouselämä article 3.2.2017 by Mikael Sjöström

Cleantech Invest, that is geared towards Sweden, prepares to IPO two of its portfolio companies.

Cleantech Invest, that listed on the First North market summer 2014 has been a tricky company for investors. The share exceeded listing price 0,65€ first 1,5 years after the IPO. During January 2017 Cleantech Invest’s share price over two folded to 3,8€. What happened? CTI took a direction over the Bay of Bothnia to Sweden where retail investors are more interested in risk, clean energy and resource efficiency than in Finland. The company hired a Swedish CEO in the beginning of 2015 and parallel-listed at First North Stockholm last April.

CTI’s idea is to buy for a low valuation a stake of a good sounding business ideas or high quality business development teams. At the moment the portfolio consists of 15 companies in Finland, Sweden and Germany. Ownership stakes range from 2,4–42,7 percent.

According to fresh equity analysis from FIM, CTI’s value is largely based on four companies. Nocart (based in Lahti), sell power management technology to developing countries. The product is a large yellow box that can store and distribute electricity in a smart way. Recently, Nocart has started to offer also electricity production (e.g. solar or waste-to-energy based electricity). In January, Nocart announced that it had signed a 200 million dollar contract for the delivery of a 30–40 megawatt solar-hybrid power plant to Zambia. This is first part of a 100 megawatt plant complex. “We estimate that Nocart’s value is now 200 million Euros. In 2020 we estimate the revenue to have ten-folded from the approximate 15 million in 2015.” says FIM analyst Aaron Kaartinen.

CTI’s other fast growing portfolio companies are Enersize, Nuuka Solutions and Swap.com. Enersize and Nuuka Solutions are doing an IPO in Stockholm First North this year. According to Cleantech Invest CEO Alexander Lidgren, the plan is that Finnish investors can participate in the share emissions.

Enerisize’s solution can reduce the energy consumption of industrial compressed air systems by up to 30%. Two years ago, the company invested into the Chinese market but instead of revenues only the costs appreciated. “Sales started happening when a new CEO familiar with the Chinese market agreed the sales price to be part of the achieved savings.”

Two ongoing projects are expected to generate 3–5 million euros of revenue in 3–5 years.

“There are also a lot of interested customers” Kaartinen says.

Nuuka Solutions has developed a service that allows real estate investment companies to reduce their portfolio’s energy consumption. The company has over 900 buildings in its network. The company is expanding to Holland and Belgium and co-operates with Caverion and with Sweco.

“Swap.com is in a phase of rapid growth and last December it completed a 19 million dollar funding round.” Kaartinen says. Despite good growth stories, CTI will continue to demand a strong stomach from investors because statistically half of the portfolio companies will fail.