Our investment in enmacc — the fastest growing energy trading platform in Europe
Launched in 2017, enmacc is an independent OTC energy trading platform based in Munich. Originally focused on German physical energy markets the business is now expanding across Europe and into new products.
enmacc announced a €7m Series A led by Piton Capital and Illuminate, with participation from existing investors, 10x and Cherry Ventures.
So, why are we excited about enmacc?
Increasing complexity and volatility in the supply and demand of energy across Europe increases the need for more sophisticated energy trading platforms and products.
- On the supply side — A political drive to reduce carbon emissions (closing coal power stations etc..) and close nuclear power stations, whilst simultaneously increasing the capacity of intermittent renewable energy, mainly solar & wind (you can only accurately predict weather a week or so in advance, making it harder to match supply with demand). Example — Figure 2 below shows shift in mix of power supply in Germany. There are ongoing concerns around the security of supply across Europe. The price of Carbon Emission Credits is rapidly increasing (420% increase in the last 3 years), see Figure 3 below.
- On the demand side — Increasing demand for renewable energy from consumers, the rise of electric cars, smart IoT home devices, growth of huge data centres.
Critical mass — We believe enmacc has reached a critical mass on their platform in the German power & gas markets with over 200 customers and 100% growth in 2018. Germany is the largest energy market in Europe and this momentum is carrying them into new markets and products.
Lack of innovation the industry — Incumbent trading platforms are showing a complete lack of innovation and investment in upgrading tech whilst simultaneously displaying monopolistic pricing tendencies.
Next generation platform — enmacc’s platform is cloud native and offers full API connectivity enabling participants to connect their own analytics, pricing engines, etc…directly to the platform. This also enables enmacc to rapidly connect additional services (e.g. downstream settlement) to offer their clients a better experience.
Synergies with Illuminate’s portfolio and pipeline— We believe we have the best overview of innovative financial market tech solutions out there… and it just so happens that some of these are in our portfolio ;-). From post trade services (CloudMargin) to data monetization (TickSmith) to compliance technology (SteelEye), we will help enmacc to become a trading platform with the best of breed 3rd party solutions directly integrated.
Ability to hire top talent & advisers — enmacc has proven that they are able to hire the best talent. Whether this is convincing traders/brokers in the market to join in sales positions, or adding the former Vice-Chancellor of Germany and former President of Trayport (incumbent OTC commodities trading platform) as advisers, they have the right people around them to make this business a success.
I look forward to working with the exceptional enmacc team on their next phase of growth. For more information please contact me on: ar@illuminatefinancial.com
