Internet broker Buyingpower is looking for E10 million to expand into Germany and the Netherlands.
Buyingpower is a small, Dublin-based online electricity broker that was set up in March 2000 to target the UK’s commercial sector. To date it has already held two auctions and anticipates a third in December, charging suppliers a fee for enabling them to sign up a bundle of customers.
With some level of electricity deregulation in the whole of Europe, the company wamts to expand abroad and has selected the Netherlands and Germany as its targets. Both markets are promising. Germany has some of the highest electricity prices in Europe and is seeing intense competition in the power markets. In the Netherlands, two-thirds of the electricity market, covering 56,000 sites, will be able to freely choose a supplier within the next 13 months.
However, in order to expand, Buyingpower needs E10 million ($8.4 million) – almost seven times more than the company raised to compete in the UK. Moreover, the online broker market is also becoming more competitive. Similar companies, including buyenergyhere.com, theutilitiesexchange and buyenergyonline already compete for contracts across various deregulated markets. In the UK, for instance, buyenergyonline has the lead on Buyingpower, with GBP25 million in contracts signed up with 24 suppliers. Buyenergyonline is also planning a European assault with the backing of both Reuters and Schlumberger.
Buyingpower therefore face some tough competition with major backers. Speed will be vital in enabling the company to become established in these markets before they become too congested.
