We talk with Kristjan Maruste, co-founder of CoModule Homepage. The company produces Software for light electronic vehicles (LEV) and an autonomous eBike. It monitors battery characteristics, displays them to the end-user’s smartphone and collects usage data. One of the reasons he ended up in this space and gave up acting as a potential profession was his father, who took him to places like this Technology Museum Sinsheim and Technology Museum Speyer (they work together and are not far apart). He also took part with CoModule in the Startupbootcamp Smart Transportation & Energy, which lead him to Berlin and they kept the HQ in Talin. CoModule already received investments in 4 rounds, the last one from five investors, one of them German High Tech Gruender Fonds (HTGF). None the less they are looking for investors for a Series-A Venture Capital Financing and fast movers can still be included. Tune in to learn more.
Video Pitch of CoModule at New Mobility World STARTUP ZONE https://www.youtube.com/watch?v=CKVj637x7Nw
And for the first time, we even have a transcript of the interview (it is not perfect, since it is automatically generated, but should give you the ability to read the interview, if you are hearing impaired):
JM: Hello and welcome everybody, this is another interview from StartupRad.io. This is Joern on the microphone, and of course, I do have a guest because it’s very boring to listen to me all the time. Kristjan, would you like to briefly introduce yourself?
KM: Hello my name is Kristjan Maruste, and I’m the CEO of the company called coModule. And we build technology for electric vehicles, connectivity technology for electric vehicles.
JM: And you are actually located right now in Berlin, right?
KM: So, yes and no. We’re located in Berlin, Germany and in Tallinn, Estonia. So there’s quite a lot of flying between the two cities.
JM: And how did you actually end up in this space at all? I mean five years ago, there was not really talk of connected mobility, there was no talk of the internet of things, or anything surrounding that, so it could not have been your aim when you were the little Kristjan, and your uncle asked you what you wanted to do, “Oh, I want to do connected devices.” “What?” [laughter]
KM: Yeah, but I was…
JM: What happened to you? How did you end up there?
KM: Well, it was actually in high school, I was doing acting, and I was very good in acting and languages. But I got completely saturated about that, and then I remember in my last grade, I decided to go to pursue engineering. I think quite a lot of that was because of my father, who always took me to science and technology museums, and gave me some cool science books to read. So anyway, I went to engineering and I started my education in France, but then I came back to Estonia, because it seemed that people could do much more back home than they could in France. The French schooling system was very conservative. So I came back and I went in to study Mechatronics, which seemed like a nice thing to do, because it kind of embeds different parts of engineering together. And from first year on, I enrolled into a project, or a program called Formula Student, it’s where university students build racing cars, and it’s also very popular in Germany, there is a lot of teams in Germany.
KM: And then I spent the next five, actually even six years, almost 24/7 going to school and then building these racing cars. And we managed to become one of the top teams in the world, so in the world there is around 500 teams now in this series, and you have competitions all around the world, so we went to every different competitions. And in the beginning, we built a combustion car, but the last two ones that I built were fully electric. So you build one car every year and you compete, but you also have to do a lot of… You basically design it from scratch and you build it from scratch, so it’s basically an engineering competition, first and foremost. And that got me soaked into the emission-less propulsion. And when you once drive with an electric racing car, you really understand that internal combustion engines are just going, there’s nothing to do, it’s not about only clean air, or silence, or noise, it’s really also about the drive, and how the vehicle performs on the tarmac.
KM: So I got in love with electric propulsion, and when we graduated, we couldn’t continue with the team anymore, but we didn’t want to go and have a nine-to-five job. So, me and a couple of other guys, we were five at that time, we created a small engineering company where we try to do kind of different electric vehicle and renewable energy services. But this didn’t end up well, because half of us had their day jobs, and somebody still went to the school, etcetera, so there was no focus. And so things kind of fell together so that we were able to go to a pitch for a Stanford University competition in Mobile World Congress in Barcelona. And this is where we went with an idea of having a connected battery, a battery that would give you information from the vehicle, to you as a manufacturer, but also as an end consumer.
KM: And this was the feedback we got when going to different fairs all around the world, and trying to understand what’s next in the electric vehicle segment and market. And that was 2014, the beginning of 2014, and then we had very good success in Barcelona. We got to the finals with our pitch, and then we decided that this is something that we will pursue and we got together with four guys, started a new company called coModule, and focused on connectivity technology, and then we applied for an accelerator in Berlin called Startupbootcamp, and then we flew all to Berlin.
JM: I see. And I remember you told your dad always took you to museums. So, what’s your favorite technology museum in Berlin right now?
KM: Actually my favorite I would say, or the one that I went with my father, was in Speyer or Speeyer, how do you pronounce it, near to Karlsruhe and Frankfurt. Because my father used to live in Strasbourg, so very close to the German border, for 10 years. So we went around a lot in that area, the portion…
JM: Yeah, that’s close to where I grew up. I lived a little bit north. I do believe it’s Speyer.
KM: Speyer, yes.
JM: Technik Museum. The town is, I do believe, a little bit smaller where it’s actually located, I do believe at Sinsheim?
KM: Yes, yes, yes. Exactly, yes.
JM: Yes, yes, yes. And they do have, for example, one of the taken out of service Concorde’s over there, right?
KM: Yes, yes.
JM: And all of the planes and all technology, so it’s a really nice place to go. We’ll have our tour notes at www.startuprad.io, and of course you’ll have the link and the route how to get there if you ever happen to be in Germany.
KM: And it’s also, why these museums are very cool are because it’s not a museum in the whole sense that you’re just walking around and looking at things, but very often you were able to do things, take part. I remember there was an attraction where you could use these life rafts that lead you out from a ship, so you could go into a life raft and jump into the water. So, these kind of things, I think, are what gets the little kid’s imagination going, and thinking that I would like to do something like that.
JM: And that is actually how you ended up in Berlin with Startupbootcamp…
KM: It’s a long story.
JM: Oh, don’t worry, there are even longer stories. So, the question for me is right now, how do you like Berlin? What do you see positive and negative about the environment there? And could you imagine to relocate even more, or do you still think having two locations not so far away from each other is quite advantageous, like Tallinn and Berlin?
KM: So for us, why we’re in two locations, or why we are in Tallinn, is because we were doing a complex technology where we will have hardware engineering, electronics engineering, firmware, software, etcetera, so the number one thing. But I think it’s always a trouble with all startups, is finding good people. And because we went to university in Tallinn, we know a lot of good people. And this is why it was much easier for us to build a team here. So usually, when you look at Berlin, the number one thing why people love it, especially startups, is that you have very good access to talent, at the same time, the living costs are quite low. But for us, it’s even better in Tallinn, because we just know the people that we can hire in the first place. So now, we’re actually growing out of that, [chuckle] because everybody we know who are really good, we have already hired. But in general, I think Berlin has a very vibrant kind of scene for startups. And also why we located there, we had choices to go to Shenzhen, China, I mean for different accelerators. So, we applied for three different startup accelerators, one was in Shenzhen, China, one was in Berlin…
JM: Which is next to Hong Kong. So, basically you would have been in province in China. For everybody who’s not familiar with China, that’s the place where all the parts of the computers, of the smartphones, of the tablets are manufactured down there, that’s exactly the world’s workbench in electronics, right?
KM: Exactly. So, this is where almost everything is made that you use around your daily lives. And so this was one option, the other one was in Berlin, and the third one was in Tallinn. And how we made our decision was not because where we have the best resources to develop technology, but where we are the closest to our future plans. So, as we are targeting vehicles that are smaller than cars so this mean electric bikes, electric scooters, electric motorcycles. And in the beginning, we were targeting the EU market, then Germany is the country that almost takes up almost half of the European market today for e-bikes, for example. So, the decision was quite easy to come, that we have to be in Germany. And in general, I would say the Berlin, thanks to different organizations and the banks, etcetera, has become kind of a center for electric mobility innovation in Europe, I would say. And you can really feel it if you’re there, you have a lot of events, you have different organizations like Agency for Electromobility in Berlin, etcetera. So, you have to be in a place where things are happening in your market, or in your segment.
JM: I totally understand that. When you’ve been talking about how you’ve made the decision, I had a very big smile on my face, because usually such startup decisions are made rather on the basis, “Oh, which place has the more awesome nightlife? Where did you get the cheaper drinks? Where is the cheaper housing?” and all of this stuff. That was the first one, so I like that you actually approached it systematically. And secondly, what came to my mind, back in 2005, when I myself have been actually living in China and working there for the government for half year back in Beijing, I remember there was a lot of smog in the first place, and also as a reaction to it, the government encouraged people, funded, subsidized the buying of small electronic scooters, they were all of the hype back in at the time, and I still do see a lot around them. So, China may be for the future, also an important market for you, right?
KM: Yeah, absolutely, just today we’re targeting kind of premium vehicles, because our technology costs a little money, so it adds a little bit on the value of the vehicle. And this is the segment that we see in the western world, where driving a bike is cool, and it’s posh, and it makes you different. But if you look at the eastern market, China, India, etcetera, where there’s huge numbers but these vehicles are very primitive, some of them even use lead-acid batteries. So for us, the market today is still on more premium, more higher quality vehicles. But of course, we’re moving towards more mass adoption. Oh, and I wanted to come back to the Berlin nightlife scene.
KM: When I moved there, some of my friends were also like, “Wow! You’re in Berlin, this is the number one location for clubbing.” And, “Have you gone to this and this place?” I said, “Sorry, guys, I really don’t know anything. We do 16-18 hour work days.” And the coolest part was that our location was in Charlottenstrasse, which is near to Checkpoint Charlie, quite central in Berlin. And the first month when we were in Berlin, we were able to stay at the flat that we acquired from, I think, “WG gesucht” so it’s something similar to AirBnB.
KM: But then we had to move out, and we were looking for a new flat. And I found one on the last day, and when I looked for that, I just looked at how far it would be from our office so that it would be in walking distance. And then I remembered that we had already been living two weeks in that flat when I had the first kind of free day, and then I went for a walk around the flat, and I discovered that the flat was like 150 meters from the Brandenburg Gate. So, it was in really the prime location you could be in Berlin, but we didn’t know that, or we didn’t actually discover that because we didn’t have any time to look around, as we were in the accelerated program, and really focusing on getting the technology done.
JM: I completely understand that, in the first few months as a consultant here in Frankfurt, I was actually only familiar with the places, with the venues you usually had the corporate events, where your clients, potential clients and organizations had some events, some get together where you just had to attend as a consultant, or the nightlife at this time, lots of people talk, “Oh, you’ve been there? You’ve been there?” “Uh-uh, I just know this place, that place and this place.” “Why you know that places?” “Because they are events, I have to go there.” It’s like when you have some time off, you just feel like sleeping, sleeping, eating and working out, right?
KM: Yeah, absolutely, absolutely. And I think this is also the reason why we went on an accelerator program, and I’ve had very many people asking from me like, “Was this choice to go to an accelerator a good one? What is the benefit you get from an accelerator program?” Etcetera. Because now the market is complete saturated, there’s so many different accelerators all around the world. But I always say, the number one thing that I think you get from an accelerator is the fact that you basically go to a boot camp. So, you take your co-founders, you move to another country, you go away from your social sphere and your network, and you just focus on the product, you just focus on your company for three or four or five months, and you don’t do anything else. And you don’t have your friends calling you, because they can’t meet you, because you’re not in the same city. You don’t have your mom or your dad calling you, you can call them sometimes, but basically you’re just focusing 100% on the product. And then, in these three or four months, you’re actually going to validate it super quickly whether it’s going to fly or not.
JM: Okay. And tell us now a little bit about your company, how does it look like? How many people do you have? And do you actually have trouble finding people, especially in Berlin, who are really highly qualified for what you’re looking for in terms of skill, in terms of personal fit to your team? Or is it just easy, “Yeah, we put out an advert on three websites, and we get 120 applications.”? How does it work for you?
KM: So what our company does, it builds connectivity technology for light electric vehicles, so bikes, scooters, motorcycle. And connectivity technology means that we build our own small hardware unit, that together with the manufacturers we integrate into the vehicle. This electronic unit gathers information, and sends it to a cloud server, which allows the manufacturer to analyze data, so they can build better products in the future. So this is exactly what Tesla does as well, so you all know that Tesla has been extremely successful, and you know that Tesla is kind of a connected car, you can use your app to see where the car is, and you can open the doors, or change the ventilator settings, but this is just a tip of the iceberg. So the real value of connectivity is that the manufacturer can learn from the usage of the vehicle after they have already sold the vehicle. And the second part is, that they can also communicate and connect with the end user, and for that we have also a built a mobile application platform.
KM: So what differentiates us is that we’ve built this in a full ecosystem where we take care of all the different aspects, and we call it connectivity as a service. And then we sell this to the manufacturers who are not able to develop this kind of technology in-house. So this means, actually everybody besides their automotive company. So this is the market we’re targeting, and this is the market that is actually growing very rapidly, even ‘more’ faster than the automotive market. So the European growth rate is about 30%, 35% and the growth rate is still also growing every year, which means that the market is kind of exploding.
KM: So, coming back to how do we find people? So actually we have our engineering team all in Tallinn, and then in Berlin we have, the after sales and business development team. And very often, founders also fly here and there. And finding people, I mean to be honest, up until now, we haven’t even used… We only have basically two or three people who are all the time in Berlin, and for these, we have found them through this kind of accelerator program, or through different internship programs, etcetera. So we really haven’t gone out there advertising that we want to get somebody.
KM: But in Tallinn how we have found people, and good people, is also going to the job fairs at the university. So I believe in two things, which I think are a little bit not very startup-ish, one of them is that I don’t believe in buying in services when it comes to developing your core technology. So we don’t use outsource programming, etcetera, we do everything in-house. This is the first thing. And the second thing is, I believe in taking people quite directly from their school bench, and then growing them together with your company. I’m a bit afraid of taking in people who have, I don’t know, 10 years of experience in doing something, because I think it might really destroy your culture, and it also might put these people into a position that they’re not accustomed to, or they don’t want to be in.
JM: Yes, it’s basically if you have people who’ve been doing stuff for 10 years, they’ve been doing stuff 10 years for one way that works best for them. And if you want to change that, you have to have a really, really, really strong commitment from those people. It’s like those annoying habits you have yourself and you’re trying to un-train them. To not do them anymore. It’s a pretty tough job and it’s like a steady process for those people. So I understand what you are saying about this. And can you now tell us a little bit about your product? We’ve heard it already, so you’re doing connectivity, can you get a little bit more specific, a little bit more into detail? And when I’ve been researching your company, disclaimer, this is the day you could register in Germany for the new model, how is it called from Tesla?
KM: Model 3.
JM: Model 3, yes exactly, it’s a Model 3 day. But you’re also working on an autonomous bike, right?
KM: Yes. I mean actually the autonomous bike was something that we did for a fair, for the Eurobike Fair as a kind of a show off, or as a prototype to show people what you can do with connectivity once you have that. So we really strongly believe that through building our technology, we’re creating a platform, we’re creating an ecosystem which allows to innovate and go much further than you can with vehicles today. And what we also did is this kind of autonomous cargo bike project, and I mean people loved that in the beginning a lot, and we did as well while we were building this. But once we unveiled it, we actually literally had three different parcel companies approaching us, and saying, “Hey guys, this is a very cool thing. What are your plans with it? Can we do a demo? Can we do some tests with that?” So I think there is this huge potential besides cars, and if you look at the problems the world is facing today, then we have the two huge problems, and number one of them is the urbanization, that a large majority of people will live in the cities. And actually, the United Nations have said that this is the biggest challenge we face in the coming decades.
KM: And another problem is pollution, so around seven to eight million people die prematurely every year around the world according to the World Health Organization, because of pollution in the cities. It’s not only global warming, it’s just pollution, as well. So it means that we have to convert people to clean modes of transportation. But the whole kind of hype and everything around that always focuses on cars, but cars only actually solve the first half of the problem, I mean electric cars will only solve the pollution problem, but we still have the urbanization problem. So it means that we actually have to get people off the cars, we have to get people on personal vehicles and smaller vehicles. And the same thing applies to cargo, and the same thing applies to everything we do in the cities. So when we actually build autonomous cars, we’re not really solving the problem the world is facing, we’re only making driving more comfortable and more enjoyable, and actually, we’re making it even harder to get people away from cars. So what we wanted to emphasize with the autonomous cargo bike project, as well, is that what we need to do is to look how we can really solve the problems and how to use this new technology into building sustainable urban environments.
KM: And I’m really happy that new cool things have popped up. If you Google Starship Technologies, for example, it’s another Estonian company who has built this small delivery drone robot, kind of a small package robot that runs on the pedestrian streets, and delivers groceries, or food, or whatever, like small deliveries to you to your doorstep autonomously, and on the pedestrian walk, which will go live already in couple of months, not like we’re looking at flying drones. So there is so much to do in the light electrical vehicles sector, and this is why we built the autonomous bike to kind of showcase that.
JM: That was exactly what came to my mind as well, when I’ve been seeing that. So basically, autonomously delivering stuff. What came to my mind, especially if you’re not very familiar with Germany, it has very old city centers where it’s sometimes even impossible to really navigate with a bigger car inside the small streets, and there are some areas in German cities where you’re just supposed to walk or drive by bicycle, because everything that’s moved by a motor is prohibited, unless you’re delivering something there. So, those zones are also something that came to my mind where you can just send in a bicycle like that. So I actually really did like the idea. Are you going actually forward with this project, cooperating with one of the companies you talked about?
KM: So we are actually building something for the next Eurobike, that’s gonna be August. So then you’re gonna see. [chuckle] So, I think this is also a thing where we are going, basically, step by step in the sense that the vehicle you build does not have to have full autonomy, it’s also something we see on the cars, that it can be autonomous only some part of the journey. So imagine a postal bike, where a postman cycles to your street, and then leaves the vehicle, and then moves from one postbox to another and the vehicle is following him. Or you have the same use case for cleaning men, for example, that they’re cleaning the street and the vehicle is following them. So there’s already things that you can very easily do with the technology around at the moment, that would already solve a little bit of a problem, so you could already go further step by step. But what I wanted to say here also, you asked why didn’t we relocate to Berlin? So Berlin is a cool place because it’s an epicentre for electric mobility, but it’s also a real epicentre for cycle culture, and urban cycling, and basically forcing the cars out from the city. [chuckle] So this is also a cool place to be.
JM: That is pretty cool. How far are you with your product right now? Do you have a number like X thousand light electric vehicles, like scooters, like e-bikes right now running with your system using your systems? Or are you still in the development process? Or, where you actually are with your product right now?
KM: So at the moment, we’re commercializing with three customers, one is in the US, called Faraday Bicycles. They just also had a Kickstarter campaign, and these ones will go live this season, this summer. Then there’s Coboc, it’s a Germany company based near to Frankfurt. And then there’s a third company in Estonia called [36:25] ____, so there’s three companies that we’re going live in the next month and two.
JM: You mean COBI? C-O-B-I?
KM: No, no. C-O-B-O-C, Coboc.
JM: Ah, Coboc. Okay, okay.
KM: COBI is kind of one of our competitors, or company that is a very similar area than we are.
JM: That’s what I also had in mind, because they are actually located here in Frankfurt, and we already talked to Andreas, the founder of COBI Bike. So, that is something that came to my mind.
KM: Yeah, and this also shows that we’re not the only ones that see potential in this field, and there’s really happening a lot when it comes to like electric vehicles. Our main difference with COBI is that they’re focused very much on the end consumer, or the end user experience, whereas we are more focused on actually empowering the manufacturer, and empowering the technological innovation. There’s a little bit of kind of a focus difference. But it’s very cool that there are more and more kind of innovation and technology coming into the sector. The end goal for all of us is to kind of empower the electric vehicle revolution, and this is happening very fast.
JM: I see. We are now approaching approximately 30 minutes, so I would like now to wrap up a little bit our interview. Is there something I really have forgotten that would be important for you to talk about?
KM: We are closing in A-rounds, so everybody who’s interested, you can contact us. [laughter]
JM: How much are you looking at? Which amount are you still looking for?
KM: So, we’re looking at around €3 to €5 million, and I mean we have investors already in talks, but it’s not late yet to jump in and tell us if you’re interested.
JM: That would be pretty cool. So if there’s coming requests through this interview to you, that would already the fifth investor we have gotten for a startup via our interviews, that would be pretty cool.
KM: Wow. Oh, no, it’s very cool. I think that you have earned a share of that, right?
JM: Maybe. Next time I need to negotiate that up front. [chuckle]
JM: I see. And I do have one more question. Because you talked about acting, about playing theater and stuff like this in your past. So if you would have the choice to be any character in any play in the world, what would be most like Kristjan, this, here on the other side of Skype, and why? I know it’s a tough question. [laughter] That’s why I’m asking it.
KM: A play would be difficult, but I mean a movie would be easier.
JM: Yeah, a movie, you can name a book or something like that. I once said I’m like 50% Forrest Gump, and 50% Pinky and Brain.
KM: So I think for me it’s quite easy and straight-forward, it has to be Iron Man, [chuckle] it has to be the guy who’s roughed into technology, because today my love is technology, and my life is technology. So Iron Man would be something that I would like to be.
JM: So you are the Iron Man of the light electronic vehicles?
KM: I hope so. [laughter] Thank you.
JM: Cool. Thank you very much for this awesome interview. Really appreciate it, and let us know what you’re up to, guys.
KM: Yes, thank you.
JM: Thank you very much. Bye-bye.
JM: Okay, and our recording is officially off.
KM: Ta-da. [chuckle]
JM: So, how did you like it? Was it bad? Was it tough? Was it too long for you?
KM: No, no, no. It was nice, it was nice. I think it’s… I like your approach, in the sense that you take it a little bit more personally. Because if people only like to find about the company as such, the others can do it through internet, you can go to the company’s website, you can do what do they do, you can most probably find some pitches to do about their product. But you are looking at what’s the background story, and why now, this was really nice.
JM: Exactly. We’re trying to aim it at a very small, almost niche target group. So basically, everybody who’s listening to us is either an entrepreneur, an investor, a service provider, or wants to be one of those, wants to be in one of those positions. You don’t find it by accident, you have to really search for Startuprad.io, but those people we have, actually do stick. For our English channel, where we just did the interview, we don’t have the numbers, because there was a glitch in the tool. We are using an open source tool. But for the German channel, we can say in the last 12 months, we had almost 100,000 downloads for all of our interviews.
KM: Whoa, really? That’s a lot.
JM: Yeah, and that’s pretty cool. And actually, we made it a few days even into the podcast download charts for Germany, even though a few days, and we do have a pretty tough competition with all the publicly funded radio stations, and all of this also offering podcast, having all the depth of their radio station, of their international correspondence, and stuff like this. But I do think we are holding up quite good, and it was a big success for us.
JM: We cannot tell about the English channel yet, but I do believe it will be there in some time. It will take a little bit more time, but you’re in pretty good company, because we’ll have you published in the next, let’s say, three weeks. And next to you, there will be published interviews of German entrepreneurs that Christian did at South by Southwest. So, you’ll be put in the middle there, and the startup news around you. So that will be pretty cool. I’ll let you know when we have published the interview, and of course it would be very, very nice if you could share it, and I’ll also give a thumbs up to Johann when we are done with it, they can also share this.
KM: Yes. We are also working at the moment on completely rejuvenating our web, and Facebook, etcetera, so we’re coming out with the new CVI, and a completely new webpage, etcetera. So, this would probably be ready also maybe in a month, maybe in two months, we’ll see how it goes. My goal is to get the first version out in a month, so quite maybe the same time, we could also have a lot of stuff happening. So, we’re very eager to share it, as well.
JM: Awesome, awesome. And we’re right now working with some other companies, like big corporates, we are working on doing interviews in a driving car with several perspectives, and several cameras. So, maybe in the future, there would be an opportunity to work together with you on this as well. So maybe doing an interview on two autonomous bicycles, driving next to each other through Frankfort. [laughter]
KM: Yeah, yeah. Or even a scooter and and an e-bike would be cool.
JM: Yeah, stuff like that, that would be cool.
KM: Well, okay, thank you. That was very nice, thank you for reaching out.
JM: Thank you very much. Thank you that you made it on such short notice. Have a great Friday.
KM: Yes, you as well, enjoy.
JM: Thank you. Bye-bye.