Founded in 2009, Intellihot’s mission is to make commercial buildings more efficient by reducing the cost and physical footprint of the H2Oh nice and nice. The company just announced it has raised $50 million to shake up the $81 billion global HVAC market, with plans to expand internationally. The round was led by investors Aegon Asset Management and the Avenue Sustainable Solutions Fund.
When you walk into an office building you will see security guards, fancy company signs on the walls and around this time of year you might see a Christmas tree or two. What you don’t see is what goes on deep inside a building, and if you’ve never stopped to consider the sheer amount of magic that goes on under the floors, in the walls, and along the ceilings of a building, you probably haven’t. considered what an incredibly complex creature a modern office building can be. Beyond the obvious — electricity, the Internet, and an endless and much-needed supply of caffeinated hot drinks — buildings need hot water.
“Paradoxically, access to hot water is everywhere, necessary, yet easily overlooked – until you don’t have it anymore. Intellihot has recognized the tremendous opportunity to integrate hardware and software into a smart, environmentally sustainable solution to improve the way commercial facilities use hot water,” said John Larkin, Head of Impact Investments and Co-Manager of the Avenue Sustainable Solutions Fund. . “Intellihot reflects well our strategy of partnering with great companies that can deliver financial performance, along with beneficial outcomes for society and the planet.”
As Larkin points out, things quickly get unpleasant once the hot water stops flowing. The challenge with hot water is that usage is incredibly time-bound. If the building has apartments or gyms, 7am is a huge peak, and when the hot water runs out, the building managers’ phones keep ringing. Unfortunately, it’s also painfully expensive to heat and keep water warm, especially at times when hot water usage is lower than normal. Intellihot addresses all of the above by leveraging tankless, on-demand water heating solutions for a wide variety of commercial buildings, including hotels, restaurants, stadiums, hospitals and more.
“You know, we really started it as outsiders, with no connection to the industry at all. I am passionate about energy loss; every time I see the radiator or an exhaust of a car, I know that its sole purpose is to warm the environment,” explains Sridhar Deivasigamani, founder and CEO of Intellihot. “I felt the same way when a water heater at my house broke down. And since then we have completely reinvented the way water is heated and supplied.”
In many applications, having a large water tank means that hot water is immediately available while more water is heated. That’s convenient and serves as a buffer, but it’s also spectacularly expensive to keep a large tank of water at the right temperature. In residential buildings, Consumer Reports sees the popularity of tankless, on-demand water heaters growing, but for commercial buildings, the adaptation has lagged significantly. One of the biggest challenges in this space is that there is a lot of planning and engineering involved in building and upgrading medium to large commercial buildings. When the buildings are designed, the space allocated for hot water is usually designed for water tanks – which have an 80% larger footprint than Intellihot’s heaters. Once the space is in place and the energy costs of heating the water are factored into the building’s total energy consumption, traditionally there hasn’t been much of a reason to switch to a tankless solution – but that’s slowly starting to shift.
“We are the first new startup in this space in nearly 100 years,” claims Deivasigamani. “If you look at the three major companies in this space, they all started in the late 1800s. So you have generations and generations of builders, construction engineers and contractors who think this is the only way to do it.”
Of course, the incumbents are also starting to produce tankless stoves, but Intellihot believes it has an edge in the approach.
“Equipment always breaks down on a Friday evening and 90% of the equipment is replaced when there is an emergency. That’s not ideal. If you’re a Chipotle or Starbucks, the solution today is to double the amount of equipment they have. That is not good for the environment. We have an alternative approach: we launched a device called Tellibot AI,” explains Deivasigamani. The equipment connects to water heaters to collect data based on flow, heating patterns, etc. You install it for 10 days and the company analyzes the data and gives you a forecast for how long the existing equipment will continue to perform.The aim is to give building owners a chance to replace boilers as scheduled maintenance, rather than at the worst possible time, at exorbitant 24-hours hourly call-out charges.
Intellihot has installed its equipment “in thousands of buildings,” the CEO told me, including hotels, multi-family homes, senior housing, hospitals and more. The company claims it has logged more than 670 million operating hours with no outages.