2150’s investment into Hometree: the trusted partner for every home’s decarbonisation voyage
By Christian Hernandez, Rahul Parekh, Shahnaz Khan
The rise of energy prices, attitudes towards personal climate impact and government incentive schemes, have led many homeowners to seek to improve the energy efficiency and decarbonise their homes. But the voyage is not a simple one: Each home is different, each one requires a combination of solutions, many of which can only be affordable for the homeowner with appropriate financing.
Should a homeowner install solar panels, or do insulation first? Or install digital radiator valves? Or rip out the whole gas infrastructure in the home and install a heat pump? The choices are complex, and a trusted advisor is needed to help each homeowner choose the right path. We believe that that trusted advisor is UK-based Hometree and we are excited to be leading their $46m round alongside Energy Impact Partners (EIP) and Legal & General.
As a firm, we have spent a long time looking for the right investment into the residential decarbonization space: From solar installers, to new heat pump technologies, to new residential energy companies. The challenge across many of the models we have seen is the extremely high up-front acquisition cost relative to the low margins of an installation, and the need for large scale human power to execute on the demand generated. In other words, “CAC/LTV” has not worked for many of the companies we had previously evaluated. That changes with Hometree.
Their customer voyage starts with a low friction proposition: a low-cost insurance product for your heating infrastructure (which today in the UK predominantly means gas boilers, water and pipes). This business is already at scale with a significant number of UK homes trusting Hometree to provide “home cover” insurance. The insurance product comes with the need to access a home at least once a year and, therefore, a low-cost way to first, understand each individual home and its needs, and second, a trusted relationship with the homeowner to guide them through energy efficiency options.
Today, Hometree is also announcing the acquisition of BeWarm (pending regulatory approval) which will provide it with the third leg of its strategy: the ability to offer homeowners financing in different guises to make energy efficiency choices that otherwise would be economically inaccessible.
It is this triumvirate of pillars that got us so excited about backing Simon and the Hometree team, especially in the UK where despite government ambitions, the country is still addicted to gas-powered boilers and old Victorian housing stock with single paned windows. Christian had first met Simon many years ago, and as he stated during our first discussion about Hometree “He is one of the most impressive founders I have ever met. Strategic, visionary and amazingly detail oriented.”
This investment round is a perfect combination of investors that leverage urban sustainability insights via 2150, an understanding of the home service business via EIP’s broad portfolio and a very large owner of housing stock and mortgage business via Legal & General.
The UK is lagging on its ambitions to install more heat pumps and achieve its Paris emission ambitions and recent announcements during the recent “Green Day”, while ambitious, will require partners, like Hometree, to help drive efficient solutions into every home, one by one but at scale. And while the UK is where Hometree starts, we expect the model to be leveraged across a number of markets supporting the decarbonisation voyage of your home, our home and your neighbor’s home, each in a different way but all with the same ambition.
We are proud to be welcoming Simon and the Hometree team to the 2150 family!
2150 is a venture capital firm investing in technology companies that seek to sustainably reimagine and reshape the urban environment. 2150’s investment thesis focuses on major unsolved problems across what it calls the ‘Urban Stack’, which comprises every element of the built environment, from the way our cities are designed, constructed and powered, to the way people live, work and are cared for. Find out more at www.2150.vc