Aalborg, the 30th of June 2021
With only three years of history, the Danish energy trading company Yggdrasil Commodities has achieved a three-digit million turnover and has now sold 15% of the company. The transaction valued the company at 160 million DKK.
With a jump in earnings of 450% for the current financial year which closes at the end of June, the time has come to boost the entrepreneurial ambitions with a more professional setup. The new company structure supports the medium-term target of at least one billion Danish kroner in valuation.
The robust foundation for the ambitious growth is set. Therefore, Yggdrasil Commodities, together with its newly appointed board of directors, plans to focus on the further development of IT systems, attracting new employees, and expanding into new geographical markets to realize ambitious growth plans.
The trading company is based in the “Silicon Valley of Energy Trading firms”, an area spanning the Aalborg and Aarhus area in Denmark. This area is an energy trading hub where many qualified employees are located.
Yggdrasil Commodities buys and sells electricity on regulated exchanges around the world. The company uses algorithms to analyze tomorrow’s electricity prices and compares these with historical data on price developments and weather forecasts. During the first three years, the focus has been on the in-house development of the IT systems which today are the backbone of Yggdrasil Commodities.
Simple and attractive business model
For one of the investors, Søren Jørgensen, who is an investor in 15 Danish growth companies and works as a professional board member, the data-driven approach has been decisive for choosing Yggdrasil Commodities.
“Their business model is quite simple and attractive. It is the platform that makes the money, and the company has from the start generated high earnings. Thus, employees can focus on developing new analysis and gaining new market knowledge to grow the business further”, emphasizes Søren Jørgensen. He continues:
“Once the algorithms have been developed and tested, you have a scalable revenue model, both in relation to the number of markets and the number of megawatts, and the company is now ready to upscale.”
Risk diversification is important
The strong focus on risk spreading at Yggdrasil Commodities is also an important factor for the choice to invest in the company, says Søren Jørgensen. From the beginning, the company has expanded into new markets and trades electricity on three continents today.
“The larger the share of renewable energy, the more difficult it is to predict tomorrow’s prices for electricity. By trading on several continents, where the weather systems are not affected by each other, you spread your risk. When the price falls because of, for example, a lack of wind in one part of the world, completely different weather conditions apply on the other side of the world”, the investor concludes.
“Started at the kitchen table”
For Søren Agersbæk Jensen, co-founder and CEO of Yggdrasil Commodities, it is essential to have access to the knowledge and competencies of a professional board of directors. “By getting advice from a skilled board of directors, we get the relevant strategic input and the necessary experience to become an even stronger player in the business”, says Søren Agersbæk Jensen.
The young company has reached a point where there is a need to professionalize the company. “We started at the kitchen table and have come a long way, but now we are ready to begin the next phase”, the CEO concludes.
Co-ownership for all employees
In addition to the daily operations, currently there is a strong focus on attracting and hiring new employees. And even though Søren Agersbæk Jensen has the title of CEO, it is important for him to emphasize that it is a joint effort. Therefore, the goal is for all employees to be co-owners of the company and become partners. The philosophy is that a co-ownership ensures that incentives are aligned and internal conflict between employees is avoided. Everyone is spurred to go the extra mile together.
The partnership offering does not only apply to current employees but is also extended to future employees.