Initiate Interview: French start-up ekWateur on adjusting successfully to current situation
We have been hearing quite some amazing things about start-up ekWateur in the news these past few months: from partnerships with Power Ledger to revolutionising the market in France, to the landing of new investments during the COVID-19 crisis, where investments on renewable energy, in general, are slowing down dramatically.
We went and spoke to CEO Julien Tchernia to hear first-hand how they adapted so fast and are overcoming the situation, how they adapted to the working from home environment, and how their recruitment processes have not taken a break.
Watch the interview here (in French) and read the transcript (English) below:
What does ekWateur do differently from other suppliers in the market?
Generally speaking, in France there are, I believe, 66 suppliers of electricity, so it's huge and it's a bit like that in all of Europe. I think we are one of the few, if not the only one, who does not consider himself an energy company. All our competitors, in any case the biggest, see themselves as energy companies: producers who sell their product, therefore EDF, Engie, Eni, Total, Vattenfall, etc. Their real job is production and they have a way to market their production.
We believe that this is not the job of a supplier. Amazon is not a librarian and we are not an energy company. So we are traders and computer scientists. Because today, to sell, the digital platform is the most important channel and that implies a very good quality of IT service and to be costumer-centric, which implies good tools and a very good interface.
This is the basis of the creation of the company, that is to say of its values. Jonathan and I created the company by thinking "well, we will try to do a job that helps fight global warming". And so, with this mindset of "we are like computer traders", we seek to make our customers want to save the planet by offering them products and services that take them there. I think it is a state of mind quite different from the way our competitors want to work, which is more "I have energy, I will sell it to you".
How has the slowdown in renewable energy impacted your company?
Yes, there is a slowdown on the construction sites, but that is not going to impact us, because we want to buy energy from the already finished construction sites. So we did not have delays in the implementation of suppliers who told us "I had to deliver you in March, but it will only happen in June". So, for us, from a volume point of view, there was no impact.
In addition, there was a drop in consumption on our customer base. On the one hand, we have professionals who have been confined. On the other hand, I think that we have a fairly specific customer base which must be a little more urban than the rest, which means that there has been a lot of regrouping, people who lived alone ended up with their parents, with their children, with their aunt, etc. So, this increased the consumption of employees a little and that eliminated the consumption of another household. So, in total, we even have a decrease in consumption for individuals.
That's what we had to face, with a difficulty which is that we buy the energy in advance, at a price fixed in advance, and we cannot store the electricity, so we had to resell it, massively, at a time when the markets were very, very low. In addition to a loss of turnover, we had a loss of stock, since we were forced to buy and sell energy sometimes even at negative price for limited times. This had a cost for the company that must be managed.
After that, we had a lot of state aid, so in the end we did a lot in terms of cash, and then it's up to us to recover profitability over time. We put a lot of work into the lawyers and the financial director area. And all this meant that all that is considered administration had to take part in it. But apart from the state-guaranteed loans, we do not yet have an answer, but we think we will have it; for example, one of our big customers is the purchasing department of the State, that we have supplied in France since January 1. All government departments and many public establishments (ADEME, the Picasso museum, Château de Chambord, the Environment Ministry, the National Education Ministry, of Home Affairs, etc., that makes a total of 30,000 sites), from the start we called them and we told them “we are in a pickle because we are confined, so you should lower your consumption” and they changed their payment terms, for example, they agreed to shorten their payment terms by 30 days. Which for us completely changes the economic equation. So, we had responses: we asked for help and everyone who was able to provide it, did.
What have you done to scale-up, despite this slowdown?
We finished the crowdfunding just before COVID, so it appeared during COVID, but it was clients who invested early January until March 5th. So after that, there was the administrative work to bring it all in. We had the ambition to raise funds at the end of this year and at the beginning of next year and, well, we no longer have this ambition. Unless if there is an investor who calls us and makes us an interesting proposal, but we will no longer actively go out looking for it, this is not the time. We have the impression that investors are very focused on their portfolios, we can even see it with our investment funds, they pay attention to their companies and they are probably less interested in going outside. Because of all the help we have received, we are in terms of cashflow much more serene than before, which gives us more time to raise funds, the BPI which also helped us was able to understand that, and therefore apart from angel investors, we will do it rather in 2021.
We’re not waiting for the situation to calm down, we work to calm it down, and we continue to do our development, to do our work, focusing instead on our customers and our internal growth rather than going for funding outside.
Has the current crisis affected recruitment in your company at all (jobs or internships)?
So last Monday the confinement was lifted and we have at least two or even three people whom we recruited during the confinement, three onboarding during the confinement, who were people with whom we had signed contracts, and we refused to wait until the confinement was over. So, we have people who were recruited during confinement. For example, Constance, who is responsible for recruitment, has never been to the office yet. And, she kept working, and that was a real question. For a week or two I stopped interviewing, saying that it is still complicated, but ultimately not. There is even a trainee that we recruited yesterday and who will arrive in July, which we only saw on Skype.
We did not want to use partial unemployment solutions either. There was a lot more work at ekWateur during the confinement. I think we all took it first a little calmly. I remember a meeting I did on Friday just before the announcements, where I said: "well, do whatever you want, for us it will have no impact; we only have individuals/homes as customers and we are already super digital, so it doesn't change anything”. And then the confinement arrived. Personally, I whistled a little for the first week, and then afterwards we had an avalanche of work which put the whole organisation under great stress. There are even people who cancelled their vacations because there was so much work to do. Because at the financial level we had to save the thing, because at the regulatory level we had to find solutions, because at the communication level we had to react to this crisis and see how we could do it, and therefore everyone was mobilised to face the situation. Additionally to working from home, which is less simple. Personally, it was twice as much and twice as difficult. So, in these conditions, to say we need partial unemployment while behind there were other state funds that helped us, it seemed to us like a scam, quite simply. A scam for our employees and for the government. So, we refused and we will continue to recruit.
And yet there were cancelled projects, like going on TV on M6 capital. We thought that it would free up time to do the rest and finally we had to face a lot of things. People are coming back little by little, yesterday there were 7 of us on an open space where we are usually 45 - 50 people. And it’s how individuals prefer. Rather, those who come are those who can come by bicycle, on foot and by scooter and those who want to be there even if no one is still doing a full week at the office.