Welcome to startuprad.io your podcast and youtube blog covering the german startup scene with news interviews and live events. Hello and welcome everybody this is joe from startuprad.io your startup podcast and youtube blog from Germany, bringing you again another interview within our series Tech Startups Germany, sponsored by Hessen Trade and Invest and the European Enterprise Network. That said, this recording is supported by HTI and the Enterprise Europe Network Hessen.
They made this possible and they have made tremendous contributions to helping startup businesses succeed and thrive, providing a range of services from helping to find grants to ongoing partnerships by taking advantage of these resources, startup companies can network and develop innovative strategies for success on the international stage. The dedicated support of HTI and the Enterprise Europe Network Hessen is paramount in providing startup businesses with the tools for lasting success.
Look for our dedicated sub-podcast together with them And, of course, Modern IQs go down here in the link in the show notes. There you get two sale pieces for free. But make sure to use exactly this link to sign up. Otherwise, you won't get the two pieces. Niklas, thank you for staying with me for a long introduction. Welcome to Startup Radio. Hi, Joe. Thanks for having me. It's totally my pleasure. As always, I have been going through a little bit the CV of you.
You actually have a PhD, so you're Dr. Niklas Hanten, and you are the CEO and co-founder of Athletics, a company based in the Darmstadt area here in Rhein-Main-Hessen. Before we get into all of that, I was looking through your LinkedIn profile, and I've seen, starting out at the very beginning, you studied at the University of Kiel. It's the most northern city here in Germany. It's like almost Denmark. University of Wisconsin-Madison and Technical University of Darmstadt.
And always energy was the overarching topic. I was wondering when you started out in terms of studying towards a degree in, what was it called? a Bachelor of Science in Electrical Engineering and Business Administration. What did you envision you would be when you graduate? Oh, that's a good question. I guess during, I mean, how does it start always back in school, right? When you think about it, what do you want to become later and what do you need to study for that?
And I was always, I had the vision to start a company actually. I was also a founder back in school and started the first company with 16. And then I thought, okay, before going bigger, you need some academic background.
So the first choice for business was also very obvious and at the same time I was pretty good in math and physics so I wanted to have an engineering touch involved as well and then electrical engineering was the choice to go as I was back at the time no possibility study something like informatics and business which would be my first choice in meanwhile but back then electrical engineering with information technologies was
the first choice so it was very close to programming something developing something um and business combined you've seen quite different places with kiel darmstadt and wisconsin madison what did you like about those different places? Well, Kiel was an obvious choice because it was just very close to my hometown near Hamburg. To a lot of friends and back then to my girlfriend. So this was the first choice. And I really loved about Kiel, that it's close to the Baltic coast.
Kiel is actually the city of sailing in Germany, and I'm a huge sailing fanboy. So this was also a good choice. University of Wisconsin, actually before I was also sometime in Shanghai.
So I really loved to travel for a while but University of Wisconsin-Madison I had a fellowship program where I had the chance to join the Wempec research team at that university with Professor Lawrence who is an expert in control engineering and I really loved the time there with all the PhD involved of their very deep and control engineering and also energy topics.
And diving deeper into that and Madison is an amazing city, beautiful located in between of two lakes and I had the chance to sail a lot there and to surf and so this was also maybe one of the reasons to go there and Theo Damschel was very different actually, it was after No sailing? No sailing, yes. Unfortunately. But why did I move here to Darmstadt?
After my studies, I had different choices where to succeed or to do my PhD and here there was a very unique opportunity to build a whole factory, the so-called ETA factory, which is also one of the reasons why I'm here today because this was very close to a lot of industry problems actually. And we built a whole factory here at the campus where we demonstrate different energy efficiency, energy flexibility, energy intelligence topics together or based on real industry problems.
And yeah, this unique opportunity was the reason to move to Darmstadt back then. And yeah, I never regret that. You mentioned Shanghai. We also have a presence on Shimalaya. What did you do in Shanghai and what do you like about the city? I had an internship for a couple of months in the company's data electronics, a Taiwanese company. Yeah. During my studies, I thought I need some expertise abroad and I really like the whole Asia, Southeast Asia region for traveling.
I traveled a lot during my studies and a little bit afterwards. Not so anymore because of two kids. It stopped then, but I really liked that. And Shanghai was just amazing, vibrant city and so many people, so many action impulses, very dynamic, a lot of speed, a lot of motivated people to actually achieve something. But it was in 2011, actually, so almost 13 years ago. I think Shanghai today is a very different city.
And back then it was also very crowded with experts and I found a lot of friends back then. And from what I heard today, it's very different. I always, you talked about a lot of people there. I was once in my life, I was at Nanjinglu, which is the main shopping street in Shanghai. I was there during the golden week when 200 million Chinese people are traveling. That was quite impressive. As Chinese people see, say, Renchang, Renhai, people, mountain people see there
are enough people to fill an ocean or enough people to build a mountain from them. Yeah. So also quite impressive there. You then went to the lovely city of Darmstadt to do your PhD and then you transitioned from academia to entrepreneurship. Actually, your PhD was in energy informatics, so energy-related computer sciences. And subsequently. Sorry, difficult word today. It's in the morning and I haven't had enough coffee. You co-founded Analytics.
How did your academic research influence the development of analytics solutions? And what challenges did you face transitioning from academia to entrepreneurship? Admittedly, it was a little bit easier for you when you earlier started a company, but there would have been some challenges. I mean, it's reality. It's not a Disney movie. Definitely. There have been some challenges and still challenges, but we love challenges. Back then, of course, the research was a huge impact to starting.
When we built this factory, we put basically state-of-the-art technology in a new factory. I had a very complex energy system because when you build state-of-the-art systems and, for example, reuse waste heat. You combine actually heating systems with cooling systems, with warm water systems, and so on. The whole building was interconnected to a lot of supply systems, to the production system, and so on.
So there was this complexity, and I was responsible for gathering all the data and somehow controlling that system. And during that time, we found out, we also cooperated with a lot of companies that usually do this for industry players in automotive, chemical, pharma, whatever, building automation systems. And they always came with conventional approaches that might be robust and actually work in the end.
So the energy flows from A to B as it's intended, but it was very obvious already that this is not very efficient when they implement it. So the idea came up, hey, this is so complex now. We need advanced technologies like machine learning, AI to analyze and optimize those systems all the time. And this is when I dived into different algorithms to study the systems based on the data to build digital twin models to optimize the systems.
So this was, of course, also the foundation of the company because all the research projects that we have here at the PTW, that's the research institute I was with, are always in the. In a big corporation with industry players. So there was a Bosch, Rexwood in there, there was a Volkswagen in there and other players. And we see directly, hey, what are the problems that we had in the factory building here? They have as well. And they were actually running energy systems not very efficiently.
And so it was obvious, hey, this is a good point to start a company and transition and transform those technologies into a real product that can be used in those industries. You started Italytics in 2019. In between, there was the energy price shock from the cutoff of the Russian gas, increasing power and heating prices here in Germany. Did you actually see there a spike in interest from the industry?
Yes, definitely. We started in 2019 concepting the software, the product and the business actually founded the company in 2020 and had, I would say, two years of close development or developing the product together with some early customers. And we, of course, you always start early with sales and getting in touch with potential customers, doing customer discovery calls and so on. So we had a long list of contacts and companies we've been in touch with.
And basically when the Ukraine-Russia war started and the gas and also electricity prices climbed, then everything was much faster. And before we talked about weeks, months, and then they called, hey, okay, when can you install? When can you do something? Because they had a real pain back then. Still have a real pain, but on a different level. I totally understand that. My question would be, could you qualify it like 50% more requests or factor two, factor three?
I wouldn't say requests, just the conversion cycles has been shortened much more because requests are rather difficult because we haven't been on the market yet with our products. So we haven't done any outbound marketing and so on. There was only our website, of course. And if you look us up, then you probably also find us, but we haven't done any active marketing and sales back at the time.
So, it was rather, you know, looking at the context we've been in touch with, and this has been like 2030, the cycle has gone much shorter. You studied energy, informatics, energy, computer sciences. What did you bring? What new or better technologies did you bring from your PhD into analytics? To be honest, in the end, not that much, rather some technology from the other co-founder, quite different approach, which is only AI related, so called deep reinforcement learning.
So it's a real system that only learns from data and you have a black box in between. And we benchmarked this technology against a different one that we're currently using in the company that is rather a combination of AI and physical models, engineering models. That makes the optimization more robust and better predictable and you need less data. So it has a lot of advantages.
That's why not that much on my approach actually is implemented in our technology right now, except all the experience that we gained with how to access, integrate into data systems. This is a big part, right? You have this where our customers, our data centers, our big automotive companies, chemical pharma companies, and they have different data systems, very high requirements in terms of cybersecurity and certifications and so on.
And you need to find a way to get your software integrated in those systems in a safe way and to connect to those data and actually have a very neat and easy experience to integrate them and do analytics on them. Before we get into the real company and analytics itself, there's a last question set or questions that I have about you. I'm talking about being the CEO and co-founder. How do you, right from the start, try to foster a...
Climate of innovation and collaboration, a company strategy, a company culture, what strategies did you find helpful there? Because that's something founders do struggle with. If you want to do it right, you should do it right from the start. Yes, having the right culture in the teams is a crucial part, I would say, when starting a company. And we always, especially in the beginning, we always enforced our culture by putting our different aspects of our culture on the wall as well.
Like move fast and break things, especially in the beginning. We shifted a little bit from that concept, to be honest. Meanwhile, in order to have the innovation and collaboration here, we are actively participating in different research projects, still have a lot of corporations with different research institutes, not only the TU Darmstadt, but also the DFKI, for example, and other players, Fraunhofer. Could you tell the audience what DFKI is? Because I also don't have a clue.
It's the German Institute for AI, basically. Deutsches Institut für Künstliche Intelligenz. Ah, yeah, the German Institute for Artificial Intelligence. Okay. Yeah, and the Fraunhofer Institute, that's probably well known. So together, out of those research projects, we always try to get more innovation into our products. And it's a part of our strategy to be always involved in research projects, to not stop with our product that we have right now, but to think further.
What's the next step? What's the next iteration? What's the next innovation that our customers need? Not only in the research projects, but also, of course, together with our customers that are in often cases also part of the research projects. So we closely cooperate here. I would be interested in learning a little bit more about analytics. What was actually the inspiration and the final spark to really say, yeah, I want to do this. Yes, I want to do this with my co-founders.
That's a good question. So we had some technology. We knew there was a demand in the industry. We knew this is we address a very important topic was in society and we thought okay let's let's give it a try let's put together a business plan and we take to part of. Competition from the german government and posted our business plan here and And I said, okay, if they're going to rate as well in this competition, then there are some good reasons to start the company.
And we actually won this competition. It was a major prize and a special prize as well. So we thought, okay, now we need to do it. So this was a kickstart. I was very motivated, but of course, even without that, but to convince some other people that this is a good idea.
To start already because looking at my co-founder Thomas who was also back at the time in the PDW Institute he wasn't finished with his PhD thesis yet so it was a little bit early to cut strings with the Institute or to do something else, but I think we found good reasons to do it anyway and we found also a good mode where he could finish his PhD thesis and start the company at the same time. I see. Yeah, you have to find agreements that are working.
Otherwise, if you have co-founders who are not actually involved in the business, that's usually a pretty hard sell for investors. Your experience before founding the company, I understand mostly your co-founder Thomas put in also some of the IP there with AI and machine learning. Yeah, definitely. So we followed his approach and or some aspects of his approach and we combined it with some others. There's not that much IP anymore from his PhD thesis in there.
We pretty much redeveloped everything. And so, and yeah, before, as I mentioned, we had this experience building the factory. I was also leading the research group with 25 PhD scientific researchers back then. And yeah, this was the influence for starting the company. What was, would you say, the biggest hurdle setting up at Athletics together with your co-founder? Oh, the biggest hurdle. That's a good question.
I think the beginning wasn't too hard actually. I think at later stages we had more problems because in the beginning it was, I mean, you get some funding from the Exist programs, for example, that are popular from when you found from a university. Then there was the pandemic. Okay. This was a challenge because we couldn't see each other. So we had a lot of remote time and some secret meetings.
And yeah, back at the time we needed to, get some funding for after the access period actually to go to the next steps. We had a proof of concept, the first prototype ready at the end of the exit stage, but it wasn't really on a production-ready level yet. So I think the first challenge was to find different ways to get the funding.
But yeah, that's what we managed. And then over time, new challenges arise from finding the right talents for the company, organizing them, having growing teams, getting some leaders in those teams. And now we deal with very different challenges than we dealt many years ago. That actually brings me exactly to the next question. When you started out, it was just two founders, and when did you start hire the first people? Both of them are questions.
We actually are three founders. So it was Thomas and I, and we both have a background in rather energy topics, and I bring the business to the table, business expertise, and we thought, okay, we're going to build an enterprise software. We need someone that is actually a software architect and has a lot of experience building and building scalable software. So we found Bjorn, our third co-founder, who's an expert in that field. So this was the founding team.
And back at the time at the Institute, we have been already in touch with a lot of students. That worked for the institute as a working student mostly before that were also the first. People we hired for the team actually, because they wanted to stay with us as a founder and take part of this early startup. That actually sounds like a pretty good idea to get close ties to good universities. Would you recommend other founders to do as well, especially,
but not only if they're from academic backgrounds? Definitely. When I look at our hires, we had the best experience hiring rather young, motivated talents right from the universities. So a lot of people that work for us now started as an intern working student then and that we just hired after the studies, and compared to some other candidates we also have senior roles here no worries but.
Compared to some others we had rather mixed experience with some others so always those people that we knew for quite a long time were always good candidates how many people are there right now in your company? Almost 50, I think. It's like 47 headcount. Not all full-time, of course. I think it's somewhat 40 FTEs. You have several software products for the industry, for enterprises. What would you say is the first product you started, and how did you branch out?
It's, yeah, you can call it different products, but it's actually in the end, what we offer to our customers, always a combination of those different products as a suite, for example. So ETA-1 is our flagship product, our platform, which brings all the infrastructure to do AI and data-driven analysis and optimization on those energy systems. And then we have, For ETA Edge, for example, this is our gateway solution, which is just the connector to the systems that we see and our customers.
And then we have our ETA Mind solutions, which are the AI scripts, the whole AI solutions that are running inside of the ETA One platform. So for all our customer projects, it's always a combination of those three products that we bring to the table. So basically, you have one product that brings in all the data, one product that analyzes all the data. And what's the third product? And the ATA1, the ATA Mind is the AI suite. This is also Python-related, really machine learning AI stuff.
ATA Edge brings the data to the platform. ATA1 is the platform itself. So you have some data systems in there that put them in databases, processes the data, samples data, align them to our meta information models. So we also model, for example, pumps, how they are connected to storages and to chillers and so on. So there's a lot of data that are laying in the side of the platform. And that's also where everything is connected together.
So the ETA-1 platform controls the ETA-Edge IoT gateway. It controls our AI solutions and tracks and monitors the execution of our AI optimization algorithms. I see. In your interview so far, you already talked about collaborations, partnerships. What role did they play without mentioning all the single partnerships in the growth of development and development of your company and important for all the other founders out there? How did you find them?
Mostly out of our network. when you found the company from the institute of course we still had strong ties to the institute so we had our first partners for R&D for example in the institute and other research institutes we've been in touch with back then, so this is how to find this also the first customers came out of the network, where we as I mentioned before all the R&D projects that we've been part of are always in close collaboration with industry players.
So we already had good ties to different companies and some leaders in there. Yeah, this is how we started the partnerships and some others that, some former colleagues of the Institute also founded other companies, for example, energy consulting companies. So also those partnerships play a role, played a role later. Let us go a little bit into the current status, what you guys are currently doing and what you are offering.
We already talked about like how big you are, that you receive funding in the past and some other milestones.
We know you're three founders now you're almost 50 people how did you keep up the company culture i mean that that's a very important part especially when a company is growing very fast that there's always a big hurdle to take and grow the people with you those who are there for a long time but also those who are joining new uh the new joiners that's that's definitely the case and i think the The biggest hurdle is yet to come with our new Series A funding that we're about to close soon.
We will grow to 120 people in the next two years. Then this will definitely be a different challenge than it's now, especially as we grow also internationally and expand there and have some offices and people not located in Darmstadt, which is something that I would say makes it a little bit easier for us now. We had a strategic decision not to hire remote only. So we're only hiring here in Darmstadt. Of course, there's options for home office and so on, but not only.
So we actually have all the people here together in the office. So we have a very close relationship. We're doing regular events, mostly young people. Having also some fun outside of the work so going have a regular event for example doing some wine hiking or playing I don't know laser tag and so on so this definitely helps, keeping the team together at the same time putting our culture on the wall communicating our culture, injecting the culture also in the team leads that carry it forward.
Yeah, this is what we took for steps to keep that culture. But of course, with growing teams, it's harder and harder to achieve this. We will be back after a short break from our advertisement partners. Welcome back to my interview with Dr. Niklas Pantant, co-founder of Athletics, co-founder and CEO, I have to say. Given the rising energy and gas prices translating into higher power costs, have you observed a surge in demand, or at least requests or website visits? Um...
Since the especially the hike in energy prices here in Germany? Well, yes. I think we had this peak during the Ukraine-Russia war and the real peaks that we also saw on the markets, the energy markets. And meanwhile, the prices have decreased already, again, on levels similar to before the war. But there's still, especially in Germany and some other European countries on a quite high level compared to other countries like U.S. And average, for example, or China or whatever.
So this is definitely one of the drivers to look into energy efficiency technology next to achieving very ambitious CO2 reduction goals. Basically, all the companies try to become CO2 neutral over the next years as their customers are pushing them or the investors are pushing them and so on. So there are different drivers, actually, for technologies like ours, not only energy cost, also staffing, for example.
A lot of companies having problems to find the right talents to operate those complex energy systems. And this is also where software actually helps to reduce the need of staff and to make the staff more efficient to actually focus on the topics that are most important and that needs to be manually done. And we've always talked about in abstract terms about the clients and the energy systems. Could you give us an idea how, what's your average client look like?
And what, because I'm a business guy, I have no idea. I plug in the computer into the power block and it works. What kind of challenges do your clients facing and what kind of industries are we talking about here? Yeah. So our research institute was mostly focused on production industries. It was very near to go into the automotive industry, for example, or chemical pharma industry. And this is also two of the verticals that we are serving.
But our major and most important vertical is now, meanwhile, the data center industry. And the reason is that we all use the cloud, the internet, AI solutions, chat GPT, and so on. Like it's somewhere in the heaven or whatever, but it's, of course, the cloud is not happening there. It's in huge buildings, for example, here in Frankfurt, a mine is a major hotspot for data centers and Damschel is very close to it, by the way.
And those buildings are full of computers running 24-7 and consuming huge amounts of energy. In Hessen, the state of Heshire, it's almost 7% of the electrical energy that is used there. And worldwide is currently almost 3% and this vertical data center industry is growing going crazy. There are currently more data centers in construction than they are already connected to the grid. So the energy demand is just exploding.
And at the same time, there's a lot of regulations going on enforcing those data centers to become more energy efficient to achieve certain so-called POE KPIs. And we actually help them. This is why the data center industry is a huge driver for us. And all those customer groups that I mentioned have the same background.
Mostly they have huge industrial cooling system or industrial heating systems or ventilation systems that are so complex that conventional control cannot run and operate them efficiently. And we help them with our software to have an AI data-driven analysis and continuous optimization in parallel to the existing system. Before we get to the usual closing questions, I would like to take a little outlook together with you and hear about your future plans.
We know very likely soon after the publication of this interview, you are going to close the Series A funding. Yeah. What are you going to do with this funding? What trends do you see that you want to participate? I've already heard AI data centers is a big thing. Do you only do this right now in Germany or globally? Well, Germany is definitely one of the most important markets for us because of regulations and high energy prices.
But looking at data centers, you have the so-called FlapD markets in Europe. So it's next to Frankfurt, London, Amsterdam, Paris, and Dublin, and that are the most important data center hotspots here in Europe. So we're expanding to those. And if you look globally where all the data centers located, of course, the U.S. Is also a big market to look into, especially as our customers, huge enterprise, is mostly US customers, actually, and it was headquartered in the US.
So we're also expanding to the US over the next month. Yeah, this is mostly what our series is about, expanding sales, expanding marketing, expanding customer success, less focused on R&D because we already have quite a big R&D team and with a very stable team. And we're still adding more features and new innovations to the platform. with our existing team. I see. We already heard that you are in the process of closing Series A.
Would it be too late for an investor to get in? Or are you already open to talk to new investors? I mean, after funding is before the funding, right? That's definitely the case. So I'm always hoping to talk to investors, of course, to just be in touch. To be honest, our Series A round was very fast oversubscribed. It was very surprising, actually, a little bit in the beginning, because the whole world is talking about, hey, VC investments are rather hard at this time.
For us, it was a little bit different experience, because it seems all the investors or a lot of investors are looking into the data center and energy optimization space. So we had a lot of interest and we could basically pick our investors in the end. So our round is full and complete and ready to be signed soon. I see. We also heard that you guys are currently around 50 people and you're going to grow to 120 people who are still listening and interested to join you.
I think you would be open to recruit at least 70 new people and they can find more here in the links down in the show notes. We will link your career website. Would that be okay with you guys? Definitely. We will have a lot of, yeah, looking for a lot of talents in the next weeks. Currently not that many open yet, but we're preparing them and soon to be published.
Come back listen to the interview again and then you can you can uh revisit the careers website or simply revisit the career website you're totally your choice guys. The very last question for all interviews supported by Heston Trade and Invest is you now have the opportunity to address like one question, one concern to the decision makers here in the state of Heston with the experience here. What would it be? Well, it's hard.
I think my concern would not only be for the state of hasher decision makers, but rather in general. I always have the feeling that we need, we all need to become much faster in everything to compete globally. Just look outside of Germany, look at China, even parts of the US, how fast technology is evolving, how different and efficient the different aspects of our life can be with digital processes.
I mean, we soon have a notary appointment for closing our deal and still every shareholder needs to be present and fly to Frankfurt. Why can't they join remotely these days? For example, why do international employees have such a hard time getting appointments here in our Ausländerbehelling-Tamschel? And why can't they manage things online? Why are the tax decorations such a pain? Or why is it actually a real pain to me, as I always pain with my mobile phone? And meanwhile, why are so many
shops and restaurants still only accepting cash in Germany? It's crazy. And I have the feeling we just need to speed up, be more efficient, to be competitive in the future compared to other countries. We're in a global competition, I guess. For everybody who doesn't speak German, Ausländerbehörde is the Aliens Registration Authority or Foreigners Registration Office. I assume you are also hiring a lot of international talents in the future, right? Yes, we do.
Our team is very international already. And of course, also in the future, we will build also teams outside of Darmstadt and in other countries. So this is an important step here. We already heard about the U.S. Do you have other countries in mind? Yeah. Our plans are not 100% done yet. But, of course, London and the U.K. is an important market, also with high energy prices, a lot of data centers and a lot of industry here. So probably U.K.
And we're currently looking into Asia, where we would probably rather try to find a partnership. And part of our Series A funding is actually also that a strategic investor will join us and will also be an important partner for us for different international expansions in the next years. That sounds pretty good. Niklas, it was a pleasure talking to you. We're recording now almost 45 minutes.
Thank you very much for sticking with me. It was a pleasure talking to you and looking forward to your Series A announcement. Thank you again for having me it was a pleasure a good day bye-bye bye-bye. Music. That's all folks find more news streams events and interviews at www.startuprad.io remember sharing is caring. Music.