Backing Heat Geek: the vetted community of heat-pump installers

Manuel Antunes, Triple Point Ventures, explains why the team backed Heat Geek.

For anyone investing in the energy-tech sector, heat pumps have been on the desk at some point or another. Today we are excited to announce our first investment in the heat pump sector, bringing it from a desktop research focus to an exciting portfolio position.

For those in need: heat pumps are devices that extract heat from a source (air, ground or water) and transfer it into another location. Their use case in the UK is predominantly heating. The excitement around them is due to their better performance versus conventional boilers: for the same energy use, heat output can be 3–5x greater than gas boilers.

Whilst we have you on heat pumps, a tale of SaaS in 2023

There’s been lots of chatter around the ability of pure-SaaS businesses to fundraise later-stage rounds. This is interesting because SaaS was perceived as one of the easiest business models to fund, revenue recurrence, high margins, and software moats were reliable (were?).

The increased risk aversion in the investor market in 2023, combined with the appearance of ever more reliable AI solutions to programming and product development, meant what was seen as a defensible technological moat is now seen as less defensible and therefore less exciting.

• 2019–2022: 35.8% of rounds tagged ‘Series A’ with over $5m raised were tagged ‘Software’ or ‘SaaS’.
• 2023 to today: that number is 28.5%.
• Between 2019–2022, 13 large Series A rounds tagged ‘Hardware’ got done; from 2023 until today we’ve already seen 8.

We have therefore grown increasingly interested in solutions marrying software propositions with highly defensible non-software moats, be it media channels and communities (think Modo Energy, one of our portfolio companies), elements of hardware enablement, or deep-tech expertise.

A tale of tech surrounding heat pumps

Our deep dive into the heating industry started with a comparison to the more mature solar market. Solar technologies could broadly be grouped into solutions helping installers install faster/better and solutions smoothening the consumer journey: and we found something similar in the heat pump space.

The players supporting heat installers operate either by servicing the whole suite of an installer’s needs (a ‘vertical’ approach) or by building solutions for a particular need (e.g. procurement of parts, local permissions). Players disrupting the usual go-to-market innovate by controlling the sales journey, smoothening it with sales-supportive content, providing financing options, or simply reaching the potential buyer where typical installers wouldn’t.