Entering the 2010s, electric vehicle development as we know it was starting to take shape, but there were only few who held the belief that the future of transportation would be heavily reliant on electricity. Among these few were Jussi Palola and Elias Pöyry, the founders of Virta. With their vision, initial support from Tekes (the Finnish Funding Agency for Innovation, now Business Finland), and a collective effort from Finland’s energy sector, electric vehicle charging platform Virta was born. On its journey to global expansion, Virta has been supported by multiple venture capital and private equity investors. Today, it is the fastest-growing electric vehicle charging platform in Europe, operating in over 35 countries across Europe and Asia.
Before Virta was founded, Jussi Palola was the chairman of Business Finland’s Electric Vehicle Ecosystem (EVE) initiative, while pursuing his doctoral thesis on the long-term development of electric systems and Elias Pöyry led Northern Europe’s largest project examining the commercial opportunities of electric vehicles for the Finnish industry. Together, they began to develop a new business model centred around the electric vehicle ecosystem and charging infrastructure.
Alongside his dissertation, Palola pursued MBA studies, and his 2011 white paper, Outlining the electric mobility supply chain and the role of electric mobility operator in it, served as the initial blueprint for the company’s operations. In 2012, Pöyry organised an event for a wide range of representatives from the energy sector to present the pair’s idea and invite companies to participate in the development of the ecosystem. Ultimately, 35 energy companies joined the project, with 17 of them making minority investments in Virta when the company was founded in 2013.
“We thought that this was the direction Finland needed to head towards early on. Electric mobility is the future – it creates opportunities for new business while offering a solution to emission reductions, the need for which was increasingly pressing in the early 2010s,” says Jussi Palola, CEO of Virta.
The eventual establishment of Virta was a significant investment from Finland’s energy sector, but it wouldn’t have been possible without the persistence and vision of Palola and Pöyry, as well as the support of Business Finland’s EVE program from 2011 to 2015, which played a pivotal role in developing Virta from an idea into a global industry leader.
Go Global or Go Home
Virta’s electric vehicle charging platform and network connects all the key players in the electric vehicle ecosystem and provides services for the whole value chain. Their platform enables companies and entities from different sectors to initiate and operate charging businesses as part of a flexible and intelligent system.
For the founders, it was clear from the get-go that Virta would expand internationally. Over the years, growth has been achieved by forming strategic partnerships with carefully selected regional collaborators.
“Electrification is a global mega-trend, and digital business transcends national borders, so the decision to seek international partners was natural. Our growth model of forming strategic partnerships has aimed for broad collaboration, enabling the integration of multiple separate charging networks for electric vehicle users into a comprehensive system,” explains Palola.
Swisscharge, a Swiss charging service company, became Virta’s first corporate customer in 2014, followed by the company’s first commercial agreements in Finland later the same year. In 2016, a German sales company was established, and in 2018, Virta gained a strong partner in Central Europe: German energy company E.ON, with which a commercial collaboration agreement was signed, and the company made a minority investment in Virta.
Investors Boost Growth
In 2021, Virta raised a new funding round, with French-based Jolt Capital as the lead investor. Other investors on the round included Finnish Tesi (Finnish Industry Investment Ltd) and Singaporean Vertex Growth.
In addition to impressive growth figures, Tesi also considered the positive environmental impact of Virta’s operations when making their investment decision.
“It’s rare to come across companies that have such impressive growth figures and a significant positive impact. We definitely wanted to be part of accelerating Virta’s growth,” says Heli Kerminen, Director of Sustainable Investments at Tesi.
Virta’s founders note that a good investor brings much more than just capital to a company.
“Our diverse investor base has brought not only capital but also experts from various fields and themes to support us. Tesi’s involvement, in particular, brought with it a certain IPO readiness, as particular governance and reporting practices became standard for Virta,” Palola describes.
Indeed, investors significantly accelerated Virta’s growth, with the firm’s revenue growing an astonishing 114% in the year following the investment round. Impressive growth figures have also earned Virta a place on the Financial Times’ “Europe’s Fastest Growing Companies” list for four consecutive years.
In more recent funding rounds, Virta’s earlier investors, such as Helen Ventures, one of the seventeen energy companies that made an initial investment in the company, have also participated.
“Ours has been a role related to expertise in the energy sector – we are able to provide guidance on highly technical matters, too, when needed,” says Mikael Myllymäki, Head of Helen Ventures and a member of Virta’s board, describing the various roles of Virta’s owners.
High-Tech Patents at the Core of Sustainable Growth
Virta has in many ways been a pioneer in the development of electric vehicle charging technology, and the company has patented several innovations along the way. Currently, seven patent families have been granted, with an additional 27 awaiting approval.
Electric vehicle technology plays a crucial role in the global energy system. In addition to replacing oil as the primary energy source for transportation, electric vehicle batteries enable the increased use of renewable energy sources globally.
Electric vehicle charging also utilises bidirectional charging, known as V2G (Vehicle-to-Grid) technology, which allows vehicles to connect to the electric grid, enabling surplus energy stored in the vehicle’s battery to be fed back into the grid when needed. This allows private vehicle owners to participate in sustainable energy production, helping balance electricity demand.
“Intelligent charging technology recognises when there is high demand for electricity and can balance usage, preventing electricity prices from spiking during peak periods,” explains Palola.
Ready to Accelerate
It is crucial for Virta that their corporate customers succeed in the electric vehicle charging business. Offering charging services should be quickly deployable, easy, and profitable to allow customers to expand their service offerings as demand grows.
“In the big picture, the greatest impact is achieved when electrification occurs across all our potential customer segments, and our customers succeed,” says Palola.
“We still have plenty of room for growth, both geographically and in various sectors, and our story is just beginning. I believe that those who believed in us at this point will be able to say in a few years that they were right and could smell a world-class success story,” he adds.
In April 2023, Virta announced its latest funding round of 85 million euros, consisting of 65 million euros in equity investments from its existing investors and a 20-million-euro research, development, and innovation funding from Business Finland. Today, Virta is rapidly growing in Europe and is now focusing on expanding into new regions in Asia and the Pacific markets. Kerminen from Tesi sees going public as one potential future prospect for the company but notes that there’s no rush; only the sky is the limit.
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The article is part of the Finnish Venture Capital Association’s and PwC’s Building Growth Competition 2023 blog series, where we present the stories of the competition finalists. You can find more information about the competition on our website!
