PipeDreams raises $25 million as HVAC consolidation heats up

PipeDreams, an HVAC and plumbing investment startup, snagged $25 million in funding from investors, including the founder of DoorDash and former OpenTable CEO.

The big picture: The home service industries, especially HVAC, have attracted big money over the past six years. 

• From 2018 to 2022, HVAC acquisitions grew over 450%, from 38 in 2018 to 211 in 2022, per Capstone Partners.

Details: Founded in 2020, PipeDreams has acquired nine companies nationwide, with a team of folks who have backgrounds at Nextdoor, ServiceTitan, and Roto-Rooter.

• The company has built a proprietary tech platform, handling performance marketing, routing, and more, to help scale its portfolio companies.

• PipeDreams targets residential service businesses with at least $2.5 million in revenue and 10 full-time technicians. 

Of note: “PipeDreams… isn’t tied to the kind of tight lifecycle timeline to produce returns or exit like the four-six years expected in PE,” the announcement said.

• This contrasts with some of the industry’s skepticism of private equity’s timelines and incentives.

Looking ahead: PipeDreams plans to expand geographically this year and is eyeing an eventual move into other verticals, like electrical. 

💭 Our thought bubble: What are your thoughts on consolidation in HVAC? We’d love to talk, whether you’re for, against, or indifferent. Hit us up.