- In order for the electricity companies to be able to deliver good and cheap electricity agreements to their end customers, they are completely dependent on having a system that ensures that they can operate efficiently and keep costs down, says Erik Wangen.
- In that sense, our timing has been very good.
Wangen is the commercial director of the software company UtilityCloud, formerly Altere, which supplies solutions that streamline operations for electricity companies by automating value chains with machine learning and AI.
When Finansavisen mentioned the company last year, managing director Torbjørn Hompland announced that they had used the pandemic to eat into the Norwegian energy market, and built up an order book of NOK 100 million.
Since then, they have stepped up the competition and strengthened the order book to NOK 200 million, as well as doubling turnover from NOK 15 to nearly NOK 30 million.
Climbing north
The customer list already includes large Norwegian energy companies such as Hafslund Oslo Celsio, Skagerak Energi and Volte, which is owned by Hafslund ECO and Eviny. Last year's most lucrative new acquisitions were Ishavskraft, NTE and Bodø Energi. The former is referred to as last year's biggest catch, without commenting on the size of the deal.
- UtilityCloud a subscription service, where we get paid per customer which the current companies have. So the more customers they have, the more money we make, says Wangen.
- Then it is important for us to have customers who themselves have a stable customer base and are growing. Almost all of our customers had growth in 2022, and we see that local electricity companies often have a strong brand and a solid position in their catchment area.
Wangen airs the idea that, as they are in an energy market with just under 100 electricity companies, the spread of rumors may have contributed to the jump in the order book. At the same time, he does not hide the fact that the ongoing energy crisis may have a hand in the game.
- Another reason is that the electricity companies must be able to offer good end-user services to their customers, including through apps. Then they depend on a system that has good APIs and integration options. Then we can deliver good data to our customers, we can also extract data in the form of our app or create our own solutions, he says.
- In order for the electricity companies to be competitive in the current market, where there is so much attention on electricity, they are completely dependent on being able to further develop their range of services as quickly as possible. Then they must have a good engine at the bottom.
New income streams
2022 was also the year in which the IT company came up with several product launches, including solutions for repayment and price protection, as well as an app where the electricity companies themselves can use the app's integration solutions to develop their own services. These can be solutions related to everything from electric car chargers to heat pumps and smart home solutions.
- We know from other industries that there must be good interaction with third parties, as a supplier will never develop the best service all by itself, says Wangen.
- If you have an exciting platform with many subscribers who are interesting third parties, our customers will have the opportunity to constantly receive new services that are adapted to their needs, and we will get new income streams.
More profitability
After several years of focusing on product development and customer growth, Wangen believes that the time has come to take his first steps outside the country's borders. This process has already been set in motion through a project with a Swedish energy giant that will go "live" in the summer of 2023.
- On that occasion, it will also be relevant for us to look at opportunities to scale faster, with lower risk, by obtaining money from an external party, says Wangen.
He also says that both capital raising, collaboration partners and acquisitions may become relevant in the investment in a Nordic expansion, but that nothing is set in stone quite yet.
- Going forward, we will make money. You can see that in the result in 2022, where we will already have a profit of approximately NOK 2.5 million, and a turnover of around NOK 27 million, says Wangen.
- This year we are aiming for an operating margin of around 20 per cent and a turnover of over NOK 40 million.
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Read the case at Finansavisen: https://www.finansavisen.no/te...
Published Jan 8. 2023 at 10.57
By: Benedicte Storm Bamvik