Capalo AI: Revolutionising Energy Storage with AI

Company & Team Introduction

Founded: 2022, Kuopio, Finland
Mission: Accelerate the green energy transition by optimising energy storage systems through AI.

Founders:

• Henri Taskinen (CEO): Background in computational physics and AI applications in climate modelling. Prior to co-founding Capalo AI, Henri was involved in research at the Department of Applied Physics at the University of Eastern Finland, focusing on machine learning models for climate change modelling.

• Riku Kukkonen (CTO): Expertise in machine learning and software development. Before co-founding Capalo AI, Riku collaborated with Henri Taskinen on mobile game projects during their upper secondary school years.

• Teemu Lappalainen (COO): Teemu has experience working at Sweco, a company specialising in consulting engineering, environmental technology, and architecture.

• Eerik Jauhiainen (CFO): Experience in financial management and strategic planning. Studied Applied Physics at the University of Eastern Finland.

Team: Lean 15-person team comprised of AI professionals, software engineers, and algorithmic trading experts dedicated to advancing energy storage optimisation.

Product Overview

• Route-to-Market Services: Handles pre-qualifications and market access for BESS assets.
   This streamlines entry into lucrative energy markets by ensuring technical and regulatory readiness, saving time and reducing complexity for asset owners.
  

• AI-Optimised Automated Trading: Utilises advanced algorithms for real-time trading across ancillary and wholesale markets.
   The system dynamically analyses market conditions and executes trades with precision, maximising returns and minimising response lag.
  

• Balance Responsible Party (BRP) Services: Manages trading operations to ensure market compliance and profitability.
   By taking over operational responsibilities, Capalo ensures seamless energy balance management and regulatory alignment for its clients.
  

• Market Forecasting: Provides accurate forecasts for various energy markets to inform trading strategies.
   Sophisticated AI models predict pricing trends and demand patterns, empowering smarter and more proactive decision-making.
  

• Future-Proof Strategies: Employs self-learning models to adapt to evolving market conditions, ensuring sustained revenue generation.

Market Opportunity

The global energy landscape is undergoing a significant transformation, with energy storage systems (ESS) playing a pivotal role in facilitating the integration of renewable energy sources and enhancing grid stability. 

Market Growth and Projections

The global energy storage systems market is on a robust growth trajectory. In 2024, the market was valued at approximately USD 266.82 billion and is projected to reach USD 569.39 billion by 2034, reflecting a compound annual growth rate (CAGR) of 7.87% during the forecast period. Specifically, the battery energy storage system segment is experiencing notable expansion, with the market size estimated at USD 37.20 billion in 2025.

Drivers of Market Expansion

Several factors are propelling the growth of the energy storage market:

1. Renewable Energy Integration: The increasing adoption of renewable energy sources, such as solar and wind, necessitates efficient storage solutions to manage their intermittent nature and ensure a stable energy supply.
   

2. Grid Modernisation Initiatives: Governments and utilities worldwide are investing in modernising grid infrastructure, incorporating advanced storage solutions to enhance reliability and resilience.
   

3. Technological Advancements: Innovations in battery technologies, including improvements in lithium-ion batteries and the emergence of alternative chemistry, are enhancing the performance and reducing the costs of energy storage systems.

Role of AI in Energy Storage

Artificial intelligence is becoming increasingly integral to the energy sector, particularly in optimising the performance and efficiency of energy storage systems. AI in the energy market is projected to grow from USD 19.03 billion in 2024 to USD 22.94 billion in 2025, at a CAGR of 20.6%, and is expected to reach USD 50.91 billion by 2029. 

Regional Insights

The Asia-Pacific region is anticipated to hold a significant share of the energy storage market, driven by rapid industrialisation, urbanisation, and supportive government policies promoting renewable energy adoption.

Business Model & Traction

Capalo AI has developed a robust business model centred on optimising Battery Energy Storage Systems (BESS) through its AI-driven platform, Capalo Zeus PP™.

Business Model

• AI-Driven Optimisation Platform: Capalo AI's Zeus VPP™ platform utilises advanced artificial intelligence to optimise the operation of Battery Energy Storage Systems (BESS), enhancing energy trading and grid balancing.
  

• Profit-Sharing Revenue Model: The company operates on a profit-sharing basis, earning a percentage of the revenues generated from electricity market transactions facilitated by their platform.
  

• Comprehensive Service Offering: Services include route-to-market facilitation, automated trading across various energy markets, and Balance Responsible Party (BRP) services, providing a holistic solution for BESS owners.

Traction

• Client Portfolio: Collaborates with major infrastructure investors and independent power producers, including Taaleri Energia, Ardian’s Nordic operating partner eNordic, and MW Storage, optimising their battery assets.
  

• Market Leadership: Established as Finland’s leading trader and optimiser for battery assets, managing hundreds of megawatts of capacity under contract.
  

European Expansion Plans: Intends to utilise recent funding to accelerate expansion across Europe, aiming to enhance its footprint in the renewable energy sector.

Competitors

Capalo AI operates in the specialised field of AI-driven Battery Energy Storage System (BESS) optimisation, where several notable competitors offer similar solutions:

1. Watt-Learn is a U.S.-based company that develops cloud-based AI software aimed at optimising grid-connected battery installations. Their platform focuses on enhancing the operational efficiency and economic returns of battery storage assets through predictive analytics and machine learning.

2. Fluence is a global energy storage technology company offering comprehensive solutions, including energy storage products and AI-powered bidding software. Their software utilizes AI to optimize bidding strategies in energy markets, aiming to maximize revenue for storage assets.

3. Habitat Energy provides AI-enabled optimisation and trading services for grid-scale battery storage and renewable energy assets. They emphasise a holistic approach, integrating market analytics, machine learning, and trading expertise to enhance asset profitability.

4. GridBeyond offers an AI-powered platform that manages the flexibility of energy assets, including BESS, by connecting them to various energy markets. Their platform enables real-time optimization and trading of energy storage assets, facilitating participation in grid services and energy trading.

5. Envision AESC is a battery technology company that, among other services, provides solutions for energy storage optimisation. While primarily focused on battery manufacturing, they offer integrated solutions that encompass battery management and optimisation services.

Capalo AI's Unique Positioning:

Capalo AI distinguishes itself by offering a comprehensive platform that integrates AI-driven optimisation with full-spectrum BESS management services. Their focus on both ancillary and wholesale markets allows them to address multiple revenue streams for energy storage assets. This holistic approach, combined with their emphasis on real-time data analytics and adaptive learning models, positions Capalo AI uniquely in the market, catering to the evolving needs of energy storage operators seeking to maximise profitability and operational efficiency.

Funding

Capalo AI has raised a total of €4.3 million through two rounds of funding, including:

• Pre-Seed Round (October 2023): €500,000 led by Innovestor Tech Fund, with participation from Iventure.

• Seed Round (March 2025): €3.8 million led by VentureFriends and PROfounders and follow-on participation from Innovestor Tech Fund and Iventure.