Your home isn’t renovated in a day
Why PropTech1 invested in 42watt
Home energy consumption and the massive increase in energy prices
One of the most hotly debated topics these days is people’s ongoing search for ways to cut their energy usage. Because for some regions and cities, gas prices have gone up by easily 100% within the year, or even just a couple of months, the increase in energy prices has become a financial threat even to the middle class. In addition to the desire to reduce CO2 emissions, homeowners are increasingly motivated to improve the energy efficiency of their property in order to reduce their energy bills. In Germany, its 22 million buildings contribute 35% of the national energy usage. Since existing buildings have on average a 5-times higher energy usage compared to new buildings, we need to renovate 2500 buildings per day(!) in order to reach our climate goals. While regulatory enforcement and subsidiaries are a driving force in the market, there is also a substantial economic driver in trying to save costs in the long term. Renovating both public and private buildings across Germany as well as Europe is high up on the agenda to manage the green transition. The complexity that comes along with it, however, should not be underestimated. In the EU alone, 230 million building units need to be renovated by 2050 in order to achieve the net-zero goals, creating the need to increase the renovation rate from 1.0% to 3.5%.
There are several ways to tackle this challenge, and a large number of tech companies are building solutions that will contribute to a significant reduction of CO2 emissions. For example, one of our portfolio companies, ecoworks, has developed an approach to renovate building stock at scale by not only leveraging software in the entire renovation process but also by using prefabricated modules. With that solution, they are mainly addressing large building stock owners that need to renovate their portfolio at scale. Other solutions such as Enpal, zolar and thermondo (just to name a few) are improving the customer experience of buying and installing “GreenTech hardware” such as solar panels and heat pumps by providing an all-in-one solution for building owners. There is, however, a lack of solutions that provide building owners with guidance on what actions to take in the first place: a roadmap to energy renovation for residential real estate assets.
Millions of old houses need new heating systems, new windows, higher quality insulation, a better insulated roof and on top of that an integrated photovoltaic system — but a lot of homeowners do not have the financial means to renovate their entire building at once. But where should they start? Which measure has the biggest impact? What fits the budget, and how can subsidies be accessed? Making your home more energy efficient comes with complexity; however, little data is accessible, and often opportunistic decisions are made due to lack of available information.
42watt is the solution the undersupplied market has needed
42watt is building a solution to address this need in the market: By starting at the very beginning in the renovation funnel, the aim of the product is to take the building owner by the hand and guide them through the entire renovation process of their house. Certified energy consultants are currently providing homeowners with renovation roadmaps (in Germany so called “iSFP”) — necessary not only for sensible renovations suited to one’s individual home, but also in order to receive highly attractive government subsidies that are only granted after the consultation of such an energy expert. Limited availability of energy consultants as well as little digitalization and efficiency in the process, however, are making the creation of a renovation roadmap a long and difficult process. 42watt offers an all-in-one digital renovation platform that consolidates all relevant data and enables homeowners to manage the entire renovation process through a single platform — it is like Tripadvisor for your home. Still, the features of the 42watt platform go far beyond a mere collection of data points and unlock various revenue streams.
Before installing a solar system or changing the windows, homeowners should take a step back and evaluate the best option for them: They need to have a 360-degree overview of the costs involved for each measure and the impact each measure has in terms of future savings and reduction of CO2 emissions. 42watt is enabling homeowners to develop a roadmap for the renovation of their house and therefore to make decisions based on actual expert insights and not just a gut feeling. Expertise like this is not only relevant for homeowners, but will be the basis for every real estate transaction in the future since the value of a property is influenced by the costs involved for bringing a building to a higher energy efficiency status.
Jörg, Marcus and Mario won us over after a few conversations over the past year — the team has a strong professional background, and they have shown us that with a complementary skill set they not only understand the opportunity in the market, but also have a clear vision on how to execute. Jörg (CEO) is a serial entrepreneur and was General Partner at Wellington Partners (early investor in Spotify), Marcus (CPO) is a trained architect and energy consultant and Mario (CTO) was previously CTO and Partner at a corporate transformation group. We strongly believe that the team will be able to develop the best tool on the market that will fundamentally change the renovation process for every homeowner.
We are pleased to join the team as the first institutional investor on board and excited that we are accompanied by high profile angels such as Kristofer Fichtner, founder of thermondo and ecoworks, Felix Jahn, founder of McMakler, and many more.
The entire PropTech1 team is delighted to welcome 42Watt as the #16 portfolio company in the PT1 family. We are looking forward to working together with the team on solving the challenges and difficulties of the current renovation process.
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