Helsinki-based Capalo AI has successfully secured $13 million in a Series A funding round to advance its energy optimization technology. The investment, led by Heartcore Capital, will fuel the European expansion of its AI-driven virtual power plant for battery storage systems. This strategic funding underscores the growing importance of intelligent software in managing the complexities of the modern energy grid.
Addressing Grid Instability with AI
The transition to renewable energy sources like wind and solar introduces significant challenges for grid stability due to their intermittent nature. This variability, coupled with rising demand from data centers and electric vehicles, creates volatility that traditional infrastructure struggles to manage. As a result, intelligent management systems are becoming essential for maintaining a resilient and cost-effective power supply across the continent.
Capalo AI addresses this challenge by connecting large-scale batteries from multiple locations into a single, coordinated virtual power plant. The company's platform uses advanced AI models and forecasting to optimize energy trading across electricity markets in real-time. This intelligent orchestration maximizes the value of storage assets while ensuring a stable balance between energy supply and demand.
A Period of Rapid Growth and Expansion
The company has demonstrated remarkable traction, achieving significant milestones in the past year alone. In 2025, Capalo AI expanded its total contracted battery capacity fivefold to exceed 1 gigawatt, a clear indicator of strong market demand. This operational growth was mirrored financially, with the company also reporting a fivefold increase in revenue and a doubling of its team.
With the new $13 million in capital, Capalo AI is set to accelerate its international growth strategy. The company plans to expand beyond its current markets in Finland, Sweden, Latvia, and Lithuania into several new European territories during 2026. This expansion will focus on scaling the optimization of both standalone and co-located battery energy storage systems with renewable farms.
Investor Confidence in a Competitive Market
The funding round saw strong backing from both new and existing partners, signaling robust investor confidence in the company's vision. The round was led by Heartcore Capital and included participation from Tesi, Finland's state-owned investment company. Notably, all existing investors, including VentureFriends and PROfounders, fully re-participated, reinforcing their belief in Capalo AI's trajectory.
Investors view Capalo AI as a pivotal player building the digital backbone for Europe's future energy markets. Paulina Koschitz of Heartcore Capital highlighted the company's role in operating and optimizing critical battery assets at scale. Similarly, Tesi's Jan-Patrick Haikkola praised the team's rapid expansion and notable position in its target markets amid growing demand.
This investment arrives amidst a surge of funding for Europe's energy storage and optimization sector, which has seen over $436.3 million invested recently. Capalo AI's software-centric approach complements larger, infrastructure-heavy investments by focusing on maximizing grid flexibility and asset utilization. This positions the company as a key enabler of renewable energy integration across the continent's evolving power landscape.
This $13 million Series A investment marks a significant step for Capalo AI, empowering its mission to enhance Europe's energy infrastructure. By scaling its AI-powered virtual power plant, the company is well-positioned to drive efficiency, support the clean energy transition, and strengthen grid resilience. The funding validates its technology and strategy, setting the stage for impactful growth in the European energy market.