Growing pressure on Europe’s electricity grids drives €11 million for Capalo AI to scale virtual power plant operations

Helsinki-based sustainable technology company Capalo AI today announces an €11 million Series A funding round to accelerate the rollout of its AI-powered virtual power plant across Europe and scale the optimisation and trading of battery energy storage systems.

The round was led by Heartcore Capital, with participation from Tesi (Finnish Industry Investment) and full re-participation from existing investors VentureFriends, PROfounders, Inventure, and Innovestor, as well as a few family offices.

This follows 2023’s €500k pre-Seed round, as reported by EU-Startups.

“The global clean energy transition is moving forward at an unstoppable pace, with solar power leading the way,” says Henri Taskinen, Co-founder and CEO of Capalo AI. “However, the electricity system is facing increasing challenges to install all the new capacity and maintain resilience. Infrastructure alone cannot solve this challenge, intelligence is essential. Intelligently orchestrated battery storage is now critical to accelerating the renewable energy ramp-up and building pathway toward a truly sustainable energy system.”

Across 2025 and early 2026, EU-Startups coverage points to sustained funding activity across European startups working on battery storage, virtual power plants and AI-driven energy optimisation, providing context for Capalo AI’sSeries A.

In Belgium, Antwerp-based LIFEPOWR raised €5.65 million to develop its virtual power plant technology. Switzerland has seen two notable rounds: Zug-based enshift secured €18.5 million to scale integrated energy-transition and solar financing solutions, while Munich-headquartered TWAICE obtained €24 million in EIB financing to expand predictive battery analytics for energy storage systems.

In the Netherlands, Amsterdam-based Dexter Energy raised €23 million to scale AI-powered forecasting and trade optimisation for renewables and batteries, while energy storage developer Return secured a significantly larger €300 million growth round to expand large-scale battery storage capacity.

Taken together, these rounds amount to approximately €371 million flowing into adjacent parts of the European energy storage and optimisation ecosystem.

Within this landscape, Capalo AI’s €11 million Series A sits at the software- and market-optimisation end of the spectrum, aligning with a broader investor focus on technologies that improve grid flexibility, battery utilisation and renewable integration, while complementing the much larger capital requirements seen in infrastructure-heavy battery deployment plays.

“We’re working hard to maximise our scale to become Europe’s leading battery storage and renewable asset optimiser and trader. With our AI-driven virtual power plant, we can deliver greater efficiency than grid expansion alone, replace costly grid infrastructure investments, and maximise the value of battery storage while strengthening Europe’s energy resilience,” says Henri.

Founded in 2022 by Henri Taskinen, Riku Kukkonen, Teemu Lappalainen, and Eerik Jauhiainen. Capalo AI’s aim is to maximise the value of energy storage systems across all markets. They combine forecast data with AI models to optimise the trading of battery energy storage systems.

In 2025, Capalo AI’s total contracted battery capacity exceeded 1 GW, representing more than a fivefold increase in less than 12 months. The company also grew its revenue fivefold and doubled the team size.

According to the company, the increasing share of weather-dependent energy sources such as wind and solar, combined with rising electricity demand from data centres and electric vehicles, is driving greater grid volatility and higher system costs.

Capalo AI connects large-scale batteries and renewable energy production from multiple locations into a single virtual power plant – optimising and trading energy storage across electricity markets in real time.

“European industrial competitiveness depends on stable, low-cost power, making batteries the ultimate linchpin of the energy transition. Capalo AI is building the critical digital infrastructure to operate and optimise these assets at scale. The team’s ability to translate technical depth into a repeatable monetisation engine positions them as the primary coordination layer for the next generation of European energy markets”, says Paulina Koschitz, Principal at Heartcore Capital.

With the new €11 million funding, Capalo AI is accelerating its international expansion and scaling of optimisation and trading of battery energy storage systems, both stand-alone and co-located with wind or solar farms.

Currently active in Finland, Sweden, Latvia, and Lithuania, the company plans to expand into multiple additional European markets in 2026 and to significantly grow its client portfolio.

Capalo AI is working with major infrastructure investors and independent power producers, including FRV (Fotowatio Renewable Ventures), RPC (Renewable Power Capital), Ardian-owned eNordic Evergreen, and Swiss battery energy storage system investor MW Storage.

“The demand for battery energy storage systems continues to grow alongside the clean transition. Riding this trend, Capalo has rapidly expanded in recent years and achieved a notable position in its current target markets. The Capalo team has done excellent work, and we are excited to collaborate with the company and support the scaling of its international growth,” adds Jan-Patrick Haikkola, Investment Manager at Tesi.

The post Growing pressure on Europe’s electricity grids drives €11 million for Capalo AI to scale virtual power plant operations appeared first on EU-Startups.