How to make heat free and computing power sustainable and affordable
Meet the entrepreneurs of Nerdalize. They explain what makes their company unique and what their ambitions are.
1. What kind of entrepreneur are you?
Our greatest strength is that we are a team that complements each other. Thijs has deep experience of integrating software and hardware and is always zen, Florian is extremely grounded and practical which makes him highly effective in getting things done and Boaz combines creativity with being highly convincing and excellent listening skills, which makes him great at sales. What binds us, is that we are all driven to make Nerdalize a success and that we specifically want to hire people that have skills that we don’t have. The company does better when we bring in people that are better than we are and so we’re extremely proud when we see the talent we managed to bring into Nerdalize. That’s what brought the company as far as it has already gone and that’s also what will bring it further still.
2. In a few sentences, introduce your company
With Nerdalize we want to make heat free and cloud computing sustainable and affordable. We achieve this by placing our cloud servers in homes as a heating system. Companies and researchers can do their data crunching on these servers, the servers heat up, and we use this heat to provide households with hot water. So, you can take a shower with free heat that was produced by computations for research!
The household can save up to €300 a year, but it’s also great news for the researchers. As we don’t have to build an expensive datacenter, their computations are not only sustainable, but also at just 50% of the costs!
3. Describe the past, present and future of your company
We founded the company in 2013. Thijs and Boaz have been friends since childhood and Florian was a friend from university. We raised our first funds from a small crowdfunding campaign and a few business angels. We also were admitted to the YES!Delft incubator and the Climate-KIC acceleration program. This really helped us in getting the right contacts and sharpening our business proposition. In 2015 we did a first pilot with Eneco, where we placed the e-Radiator in 5 houses. The pilot itself was successful, but we never expected the media attention our idea would get. We even got mentioned in the New York Times! After the pilot, we decided to switch from a radiator to a boiler system where we heat water. Our hardware team did a great job in redesigning our system in just 1 year and cutting costs on the system significantly. We also used that time to work on the other side of our business model, our cloud proposition. We did extensive user research to understand how we can make cloud not only affordable and sustainable, but also easy to use.
Currently we have grown the team to 20 talented Nerds, with absolute specialists in their field. For instance, Docker is one of our core cloud technologies and one of our software engineers was amongst Docker’s first employees in Silicon Valley. We also attracted experienced and successful entrepreneurs like Jan-Willem van Boeckel and Hessel Jongebreur to join our board of advisors and we have a strong strategic partnership with Eneco. Together, we have made the dream of free heat and sustainable compute a reality and we are now ready to scale.
A strong point of the Nerdalize business model is that we are already profitable at around 70 of our CloudBox server-heaters. But our ambition goes much further than just building a profitable company. We can only achieve real impact if we reach scale. So we are aiming for 1 million households with a CloudBox, which would make us larger than Google Cloud Engine.
4. What is the unique value of the products/services you offer?
Nerdalize creates a triple win. Households save 300 euros a year on their heating costs, because we pay for the electricity of the servers and give them free heat. Because we don’t have to build an expensive datacenter we can offer compute at 50% lower costs. And because we use the same kWh of electricity twice: first to compute and then to heat, we save 3 tonnes of CO2 per household per year.
That’s our overall benefit, but we actually create unique benefits for every group we address. For households, with the 300 euro savings, they can take an energy efficiency measure with low upfront costs (a 300-400 euro installation fee) and a quick payback time of less than 1.5 years. And without any extra effort, except making a cup of coffee for the installation engineer when our CloudBox is installed.
For cloud users, we not only save them money, but we also take a bit bite out of their IT carbon footprint. We also increase transparency on their price/performance by offering benchmarks services and we avoid vendor lock-in. This means that by computing with Nerdalize, they don’t run into unexpected costs when customers want to switch providers. This is a major pain point for around a quarter of cloud users. Nerdalize is committed to transparency because we believe that we have a superior offering, so if the market is transparent, we win.
5. What is the main goal of your crowd investment campaign?
Our main goal is to bring free heat and sustainable cloud to the first households in the Netherlands. We started with a goal of 20 households, but so many people supported our cause that we are now aiming higher. We want to equip 50 households with our CloudBox and on top of that hire two additional software engineers. During the campaign we received multiple requests from companies informing about our cloud offering. To be able to help them we want to place more CloudBoxes and we will need to speed up development of our cloud platform. By doing this we can bring our dream of free heat and sustainable, affordable cloud to scale faster.
6. Why crowdinvesting?
We had done 2 successful, but much smaller, crowd investment campaigns in previous years and so we knew we liked the instrument and that many people are interested in and want to be part of our mission. As we are planning to do a series A round next year, this is probably the last time we can offer private individuals the opportunity to become a shareholder in Nerdalize and we had the opportunity to offer this convertible loan under comparable conditions as the convertible we agreed upon from Eneco and our existing shareholders. This means people can participate side by side with professional investors.
So, on one hand it was the opportunity to put out an attractive offer to people who have been early supporters and to new supporters. At the same time, this was a great opportunity to update the world on the progress we’ve made by communicating the launch of our CloudBox and our progress on our cloud platform
7. Give 3 key reasons to invest in your company
We believe that our mission of free heat and sustainable, affordable cloud in itself is attractive, but purely from the standpoint of an investor, this is what we would say:
- Join a highly innovative company that has validated large parts of its model, both from a technical and business perspective, that has been assessed by external juries and received multiple prizes, has strong partnerships in place to execute its plans and is now ready to grow;
- Join a company that has the unique combination of being profitable at a low number of devices, but still being highly scalable;
- Participate under comparable terms and the same conversion moments as professional investors like Eneco.
You can invest to become a shareholder in Nerdalize. See their crowdfunding campaign here