With its app, the start-up Elvah offers its customers access to 300,000 electric car charging stations, fixed tariffs and shows them in real time which charging stations are working well and which are failing. At the same time, the team around co-founder and CEO Gowrynath Sivaganeshamoorthy (45) worked on an AI platform that should turn electric cars into mobile battery storage. In technical jargon, this is called bidirectional charging or Vehicle to Grid. As recently as last summer, Elvah received an award for his ideas “high single-digit million investment” by investors such as the Thies Group, Maingau Energie and ex-Mercedes board member Frank Lindenberg. A good six months later, provisional insolvency proceedings are underway and Elvah is up for sale. In the interview, the boss talks about what has gone wrong in the last few months.
mm: Mr. Sivaganeshamoorthy, in the summer we talked about your last round of financing and your big plans. Now we are talking about bankruptcy proceedings. Why was Elvah going down so fast?
Gowrynath Sivaganeshamoorthy: We have twice had the misfortune of having planned funding rounds canceled at the last minute despite a deal ready to be signed. The prospective venture capitalist, with whom we had planned a round of financing, got into financial difficulties itself and was therefore unable to fulfill its promises. A subsequent corporate lead investor postponed the financing round a few days before the notary appointment and canceled it a few weeks later. In the short time that remained, we were unable to find a new investor. Also because the situation on the capital markets has deteriorated considerably.
How much money would you have needed to keep going?
In fact, we were only missing a smaller single-digit million amount to be profitable.
And that couldn’t be absorbed by the operative business either? Did Elvah miss the loading customers?
We are still the leading provider in Germany that allows charging exclusively via app and not via insecure and outdated RFID cards. Our customer base has been and still is loyal and we have gained around 65,000 registered customers in the 2 years. In order to implement Elvah’s vision, however, we need further growth capital in research and development, which at least currently cannot be financed by the charging business alone.
They also wanted to monetize bi-directional charging.
This will be the big issue of the future and we are firmly convinced that at some point it will be the most normal thing in the world to use the batteries in electric cars to store energy flexibly. In the short term, no relevant profits can be generated from this, since bidirectional charging has so far only been supported by a few charging stations and vehicles. We had never budgeted for short-term profits from the business either.
In the past you have complained that large electricity companies act almost like a cartel when it comes to their charging tariffs. Is that also a reason for Elvah’s bankruptcy?
As energy consumers, we often pay more than the providers charge their own end customers at the charging station. This has come to a head again in the past few months and weeks and with the energy crisis. Nevertheless, the lack of funding is the crucial point.
Elvah shows its users which charging stations work well and which don’t. Did that make you enemies in the industry?
I do not believe that. In fact, many industry participants – from automobile manufacturers to charging station operators to roaming platforms – are very interested in the Elvah Score data. This shows that there is definitely room for a data-driven and customer-centric approach in the market.
What’s next for your employees?
No layoffs are currently planned. Business operations continue without restrictions despite insolvency. In the coming weeks we will look for a buyer together with the insolvency administrator Jens Lieser and hopefully find a strong partner for the future.
Who is eligible?
We expect market participants such as energy companies and charging infrastructure operators to be interested in our software and our team. We have an attractive and sustainable business model and have the best solution for digital charging. We are therefore optimistic about the future.