DOOH-Bolstered EV Charging Network In Europe Now Insolvent
August 13, 2024 by Dave Haynes
In yet another reminder that making money from advertising is harder than it may appear, a German digital out of home media firm using screens on EV charging stations as the business model is now insolvent.
Less than a year ago, the Bavarian firm Numbat had raised 140 million euros in new capital in a financing round. Now, reports German content partner invidis, Numbat is taking refuge under the protective umbrella of insolvency proceedings. The business case for charging infrastructure combined with DooH remains difficult – due to the sluggish market situation, long building permit procedures and home-grown problems.
Almost every month in recent months, Numbat has announced new location collaborations with nationwide supermarket chains and hardware stores such as Norma, Feneberg and Hagebau . However, the plan to set up hundreds of fast charging stations with DooH screens in the short term seems to have failed for now. The Bavarian EV charging infrastructure operator Numbat has surprisingly taken refuge under the bailout umbrella of insolvency proceedings. “We have made great efforts to get the company back on track, but due to the market situation and technical challenges, this could not be achieved in the time available,” says Martin Schall, Numbat CEO and co-founder.
Even though market penetration for EVs is higher in Europe than certainly in the US and Canada (it’s really high in Norway), Numbat says the use of EV fast charging stations is still too low to operate profitably on the market in the long term. Revenue from selling media time on the fast chargers was seen as an incremental sales channel, with the main revenue source being fee-based EV charging sessions.
Apparently, Numbat has not yet been able to access the 140 million euros raised in autumn 2023. According to the company, the capital round was intended for a dedicated project company and was specifically intended for equipping the company with fast chargers and their installation.
In addition to the lack of charging and advertising revenue, Numbat has also had to contend with technical challenges in recent months that the provider was unable to get under control in a timely manner. The approval processes for building permits and other applications were also delayed – the rollout of the fast chargers could not be carried out within the planned time.
Numbat is not the only one struggling with low utilization of the extremely expensive charging infrastructure and comparatively low DooH advertising revenue. The conflict of interest is inherent in the system. Installing EV charging stations primarily in parking lots is not always optimal in terms of DooH range.
An additional challenge was that Numbat wanted to establish the EV-DooH business model in rural areas, where DooH screens have so far been little or not at all represented and there is a lack of sufficient marketable reach.
Many charging infrastructure providers with buffer batteries try their luck by trading on the electricity exchange – buying electricity cheaply in times of low demand and selling it back into the grid at a higher price when demand is high. But the prices on the electricity exchanges are highly volatile and are falling again ( see the background article from Eon ).
The insolvency proceedings do not necessarily mean the end of Numbat, but the business case for DooH and EV charging will remain difficult for the foreseeable future. Market competitor Jolt from Munich is relying on a mixture of externally developed fast chargers without DooH screens and self-developed EV chargers with displays in order to adapt the investment to the location’s potential. The industry is currently still dependent on state subsidies, which are sometimes more and sometimes less reliable.
This is not a sector I know all that well, but the Numbat situation has some similarities to the path of a US company called Volta, that started out with business model that offered free charging in exchange for the charging stations having digital ad posters on them. The company rain into financial issues, and was acquired in early 2023 by the fossil fuels company Shell. The ad network still exists, but charging is now fee-based.
Wait … didn’t we have this conversation last week?
And the week before that… and …
You would think that with two potential revenue sources- the digital panel and revenues from the sale of electricity – this should be a viable business model. There have been plenty of attempts worldwide, but no one appears to be successful or gotten the mix right.
My thoughts.
First off, capital costs are very high, substantially more than a standalone digital panel (especially if you are deploying DC chargers)
Second, outdoor revenues are dependent on eyeballs and a definable and measurable audience. If you are dependent on EV drivers alone for your audience, you are not going to deliver enough eyeballs to be viable.
Third. Monetizing EV locations is difficult as the vast majority of EV drivers charge their vehicles at home. If you want the speed and convenience of fast charging on the go you need L3 which goes back to my first thought. Capital costs are very high.
Dave is right, without government subsidies for infrastructure this is an extremely challenging business model. Unfortunately, neither revenue source is sufficient to deliver an adequate ROI