ArcTern fuels up Woltair to help you fuel down
Kristin Aamodt, Partner at ArcTern Ventures
We couldn’t be more excited to announce our first investment out of ArcTern’s Fund III: Woltair — enabling smooth and hassle-free adoption of complex residential energy solutions such as heat pumps and rooftop solar panels. It is not every day we meet founders who bring an amazing team, product-market fit, and perfect timing together — but Woltair has done all of that and more.
The Big Picture
Decarbonizing home heating and energy use is a challenging, yet critical task. Residential solar panels, batteries, and smart energy management solutions have started to gain public interest as a response to rising electricity prices across Europe, but deployment is still in its early days. Residential energy use directly contributes to roughly 11%-20% of the world’s GHG emissions — around 65% of this is used for space heating and cooling, which today is primarily done by natural gas furnaces. In stark comparison, the electric heat pump, which was invented decades ago, can run entirely on renewable electricity and heat your home with up to 350% energy efficiency. From an environmental point of view, it should be a no-brainer to accelerate the adoption of all these solutions. However, the market has lacked the economic incentives or urgency to deploy solutions at the scale that was needed. Until now.
Several tailwinds are now coming together to create what is the perfect storm for the deployment of heat pumps and residential solar. On a macro level, the high price of electricity and gas throughout Europe makes the monetary return of investment evident for a large selection of customers. This was already the case before the Russian invasion of Ukraine, and the situation has become a lot starker since resulting in up to 5–15 times the normal price levels for electricity and natural gas in several European markets. Simultaneously serious energy concerns have arisen. REPowerEU, which is a direct response to the situation in Ukraine, has advocated doubling the deployment of heat pumps and has launched a Solar Rooftop Initiative to mandate solar on new residential buildings — a bold initiative to stabilize socio-political dynamics and our climate. There could not be a better time for homeowners to install heat pumps and rooftop solar solutions.
As a result, these markets are experiencing unprecedented growth. As an example, after a period of single-digit growth, the European heat pump market has exploded — it grew by 34% in 2021 and continues to grow by 25%+ in 2022. The US is showing similar tailwinds with the recent passage of the Inflation Reduction Act (IRA) turning residential decarbonization into a global priority.
How does Woltair help?
Woltair is a tech-agnostic platform that reduces the annoyances faced by installers and consumers. The first product they brought to customers was their heat pump installation offering. For everyone who has ever installed a heat pump the experience is quite similar — it can be a huge pain. Choosing the right heat pump, managing various installation teams, and getting proper after-sales follow-up are all pain points that plague heat pump deployments. In fact, founder Daniel Helcl started Woltair in 2018 after his own lackluster experiences with heat pump installations. He and his co-founders Karel Náprstek and Jiří Švéda wanted to streamline the purchase process and installation of sustainable energy solutions. The platform connects consumers, installation and maintenance technicians and supply chains all in one place to make the process smoother and more efficient. As such, Woltair is establishing itself as a trusted partner to guide customers through all stages of the purchasing and installation journey, including after-sales.
For consumers, Woltair’s digital transparent advisory tool analyses the size and profile of their home to provide a recommendation of best-fit technology along with achievable savings and available government subsidies. Once a product has been selected, the platform then connects consumers to relevant technicians, handling the order experience and installation tracking all online. Technicians, on the other hand, use Woltair’s SuperFix productivity application for customer acquisition, administration and material purchasing — increasing their productivity and efficiency.
Woltair established their heat pump installation platform in the Czech Republic and has expanded to Poland — Europe’s fastest-growing heat pump market with 66% growth last year. Since launch, Woltair has served over 3,000 customers and is growing 4x year-on-year. They added home energy efficiency products like residential solar and are quickly becoming THE trusted partner for complex home energy solutions. Next up will be Germany and Italy, both rapidly growing markets.
ArcTern’s investment thesis
At ArcTern, we were particularly excited about the industry tailwinds and the opportunity to invest in decarbonizing not only Eastern Europe — a historically carbon-intensive region — but also to invest in a scalable platform that can rapidly move to other geographies. When we went looking for the right company, we were blown away by the Woltair team — a senior team that comes from unicorns, multi-billion-dollar companies, and top-tier organizations. Woltair is a result of carefully selected world-class talent spanning software development, technical heat pump competence, supply chain management and local market expertise.
We are humbled and excited to support the Woltair team and lead their €16.3m international Series A round. Alongside us, we have an amazing investor group including The Westly Group and Alternus as new investors and Inven, Kaya and Movens as existing investors.