How Aira is powering Europe's clean energy shift
In a world where the urgency of climate challenges intensifies by the day, the search for sustainable energy solutions has never been more critical. At Kinnevik, we back disruptors - innovators with a vision for a sustainable future, driven to enhance lives through simpler, superior and more valuable products and services. It was with this spirit in mind that we chose to invest in Aira, a catalyst for clean energy-tech solutions, positioned to accelerate the electrification of residential heating - Europe's forgotten emitter.
From the Aira deal team: Tatiana Shalalvand, Anna Adlarson and Charles Martin
The Market
Residential heating accounts for 10% of Europe's total direct emissions, positioning it as the third largest CO2 contributor, which underscores the magnitude of the challenge and the urgency of solutions like Aira. Aira provides an intelligent heat pump with a set of smart features that learns the customer's routine to precisely plan heating hot water patterns. This technology reduces heating costs by up to 40% and C02 emissions by at least 75% (increasing up to 100% with green electricity). Aira is making clean energy-tech affordable and accessible - at a rapid pace, at scale.
Energizing the future
Aira captured our interest not only for its strong climate case, but also for the major business potential it offers. Heat pumps represent a EUR 1 tn market opportunity in Europe alone. Increasing energy costs, growing consumer climate consciousness, government subsidies, and the pressing need to decarbonize homes suggests that this already large market would enjoy strong tailwinds.
Aira also stood out to us due to their ambition to extend their offering beyond the heat pump. They are crafting a complete ecosystem of clean energy-tech solutions, including heat pumps, batteries, solar panels, EV-charging stations, inverters and electricity tariffs. By implementing a vertically integrated business model that covers every aspect from production to customer acquisition, installation and logistics to financing and energy management, they are not only addressing the fragmentation and inefficiencies in today's value chain but also aims to overcome significant market hurdles such as installation bottlenecks and limited financing options. The end-to-end approach aims to achieve an attractive price point, high sales conversion rates and superior customer satisfaction.
Aira's holistic, customer-centric strategy, significantly enhances their value proposition. They have streamlined the traditionally complex switch to a heat pump into a seamless experience. Potential customers receive personalized guidance from one of their Clean Energy Experts, ensuring the solution is tailored to their specific needs. Furthermore, Aira's commitment to customer satisfaction is demonstrated by their quick installation within four weeks, all-inclusive monthly payment plan and their 15 year Comfort Guarantee.
Vision into action
When we first met with the Aira team in 2023, we were actively looking to invest in the heat pump sector. From the start, we were captivated by Aira's exceptionally strong leadership team with Martin Lewerth as CEO and their bold vision of becoming Europe's leading clean energy-tech company, with the ambitious goal of equipping 5 million homes by 2034.
The team are moving forward with remarkable speed. Since our first investment in Aira's Series B in October 2023, they have:
- Established a leading fully vertically integrated clean energy-tech platform with annual revenue run rate of EUR 100m
- Set up a leading position in Germany, Italy and the UK, by acquiring three local heat pump installer businesses and opening 11 regional sales and installation hubs with plans to expand further
- Launched its state-of-the-art Aira Heat Pump and clean energy tariffs in partnership with Octopus Energy
- Launched monthly payment model financing for consumers
The new investment will enable Aira to expand further in its core markets Germany, Italy and the UK while growing the green skills workforce. Furthermore, Aira will develop its clean energy-tech portfolio with further products and services to increase overall cost savings for customers.
We are extremely excited to be on this journey with Aira, powering Europe’s clean energy shift.
