HVAC startups get hot, drawing new investments

The HVAC space is heating up with startups attracting meaningful investment dollars. As Axios highlights, a number of companies have completed fundraising rounds this year:

• Quilt, creators of the “most advanced ductless heat pump system for residential use”, raised $9 million in May with participation from Matt Rogers, co-founder of Nest.
• Gradient, maker of an in-window heat pump (which actually sits below the window, leaving the window itself clear), has raised over $27 million this year and signed a 10,000-unit purchase agreement with New York City.
• Specifx Data, a software provider that helps companies with lots of real estate (e.g. Walmart) understand the performance of their HVAC assets, closed a $3.5 million seed round in April.

What’s going on: Government incentives, a broad push towards decarbonizing the economy, and the realization that there’s big money in HVAC have, in part, driven the influx of investment dollars over the past few years — including private equity.

Google Trends shows that searches for “HVAC business” have more than doubled from September 2018 to September of this year.

Looking ahead: These startups have an uphill battle to compete with existing players, especially manufacturers. However, they’re well-capitalized and actively seeking partnerships with contractors who want to expand their offerings.