Capalo AI, a provider of battery energy storage-based virtual power plant solutions, has secured €3.8 million (~$4 million) in a seed funding round led by VentureFriends and PROfounders, with participation from existing investors Inventure and Innovestor.
“Battery Energy Storage Systems will play a key role in the transition to clean energy since they are the most cost-effective and multi-functional tool for grid balancing,” said George Dimopoulos, partner at VentureFriends.
With this funding, the company plans to accelerate its European expansion and grow its client portfolio. The company also recently announced a partnership in Sweden with Å Entelios, a Nordic utility company.
“Battery energy storage systems are essential for driving the transition to clean energy and maintaining a resilient electricity grid. However, the battery hardware alone cannot provide the needed value for the energy system or its owner; you need to intelligently orchestrate all this capacity together to maximize its impact. We’re proud to drive the energy transition forward with our virtual power plant,” says Henri Taskinen, Co-founder and CEO of Capalo AI.
Founded in 2022, the company says it connects batteries from various locations into a large virtual battery—a virtual power plant called Zeus VPP.
According to Mercom’s Annual and Q4 2024 Funding and M&A Report for Energy Storage and Smart Grid, venture capital funding in the Energy Storage sector in 2024 decreased 60% year-over-year, with $3.7 billion in 84 deals compared to $9.2 billion in 86 deals in 2023.
In December, Zitara, a battery management software provider, closed $17 million in a Series AA funding round led by Salesforce Ventures, with participation from Emerson Ventures, Chevron Technology Ventures, Energy Impact Partners, and Climate Capital.
