My personal Torqeedo story

Last week, my company Torqeedo (Tesla for Boats) was sold to Deutz (inventor of the diesel engine) for an undisclosed amount, said to be just shy of EURO 100 Million by various media outlets. The following is my very personal Torqeedo story. It’s a story of passion, faith, engineering mindset and the right of every true entrepreneur to have a hobby company on the side.

I’m a sailor, and my favored design is that of a performance cruising catamaran. Luxury and speed. I have this tick where I can’t settle for “either-or”, I want both … story of my life. So, Luxury and speed.

Luxury for me means quiet, wind, sea. I hate engine noise. My first catamaran, a Catana 50, was a fine boat but I loathed the engines. You see, cruising catamaran have 3 diesel engines: one in each hull for propulsion, and a generator for the hotel loads. This is 3 diesel engines that make noise, stink and require a significant amount of maintenance. The impact on the environment is disastrous: Diesel soot goes into the sea, unfiltered.

I though there must be a way to improve over traditional designs. After some research, I concluded there was nothing “off the shelf” but I found a garage shop that played around with electrical drives, lithium-ion batteries and range extender generators.

I convinced the founder of legendary multihull brand Gunboat - Peter Johnston - to design a hybrid performance cruising catamaran. It would be sort of the BMW i8 of the seas. Have a look at Moonwave.com to see the result… Trouble was, the propulsion and energy system came from said garage shop… it worked in principle, but was utterly unreliable. In fact, I needed a captain who was also an electrical engineer…

Being an entrepreneur, with some extra time available because I just graduated from CEO to Chairman of my company Demandware, I founded Moonwave Systems in my hometown of Jena, Germany. Jena is far away from the sea, yet I was hopeful to design a proper hybrid propulsion system. I hired some engineers, my brother Martin as a 2nd in command, and off we went. It was mighty fun – I refreshed my dated electrical and electronics skills, worked with young engineers, we bought components and installed them in our portable lab (container) and we began to understand where we could innovate, and where we would want to partner.

One early conclusion was that we did not want to build lithium-ion batteries. Not that I was afraid, but given the relatively narrow and specialized market, it seemed we would be better off partnering with whomever had similar ideas. That brought me to Torqeedo. And after months of begging on LinkedIn, I got an audience with Christoph Ballin, the founder and CEO of Torqeedo.

Torqeedo, at the time, was the market leader in electrical outboard motors. The “Travel” was a fine product with tens of thousands of loyal customers. Torqeedo wanted to address a wider range of the market and had invested in “Deep Blue”, a 40KW outboard system that used an industrial-strength and marine-certified high-voltage battery.

And when I first met Christoph, Ballin, Founder and CEO or Torqeedo, I saw in him a soulmate in the quest to make boating quieter and more environmentally friendly. More importantly, he had the battery we needed. While negotiating an OEM deal for the battery, I noticed a thick paper printout of a power point deck on his desk. It looked like a pitch book for investors.

I ended up investing in Torqeedo, and my company Moonwave Systems was to become part of it. There were synergies in the high-end of the product lineup, and our hybrid propulsion system prototype was turned into a real product. Investing turned out to be rather complex: tired shareholders who were unable or unwilling to support the company going forward made every step difficult. It was a typical story about all that’s wrong with Venture Capital in Germany… too many people investing too little and having too many rights.

Over several financing rounds, I ended up investing more than EURO 20MM. We managed to restructure the ownership of the company such that only active investors had a say in the future. I spent a lot of time with management on topics such as organization, strategy, product, marketing, sales, key personnel and so forth. I also continued to participate in steering committee meetings for the “Deep Blue” product line, especially the hybrid system.  Eventually, in 2016/17, business took off.

Having invested more than I was comfortable with in a hobby, I now promised to myself that a) I wanted to make enough money from it to pay for my sailing hobby, past and future and b) that my sailing catamaran Moonwave would be fitted with the new, industrial strength hybrid propulsion system “Torqeedo Deep Blue Hybrid”. At the time both sounded like a very lofty goal…

We could have invested even more and grown Torqeedo into a profitable public company. We had plans for it and interested co-investors.

Then came the diesel scandal. We were introduced to Deutz, a diesel engine manufacturer who was very interested in acquiring Torqeedo to have a future. After a couple of months of negotiations, the 150-year-old company Deutz acquired Torqeedo.

My very personal conclusion: I never had more fun working outside of my comfort zone – marine technology, hardware, high-voltage batteries, electrical circuits, electronics and mechanical design, supply chain problems. I had the privilege of working with some of the most dedicated and hard working people, like Christoph Ballin and Ralph Plieninger and my brother Martin.

Some will say we were just lucky, but luck comes to those who are prepared.

I wish Torqeedo good luck and hope the partnership with Deutz will make Torqeedo even stronger.