Swedish heat pump supplier Aira has raised a further €145m (£125m) from investors, in support of its plans to provide millions of European households with access to its green heating subscription service.
The company, which was founded in 2022 by Vargas – the impact investor that also helped launch energy storage firm Polarium, EV battery manufacturer Northvolt, and sustainable steel maker H2 Green Steel – is aiming to become the Europe’s leading supplier of air source heat pumps.
Aira said the new equity investment would be used to drive “rapid” market expansion across the UK, Italy, and Germany, as part of its push to deploy its clean heat technology in five million European homes over the next decade.
In the UK alone, the firm is aiming to create 8,000 jobs in various hubs across the country, including sites in Manchester, Sheffield, and London.
Aira also said it planned to introduce an affordable monthly payment model in order to make green home heating technology more accessible to households, in addition to broadening its technology offering to include intelligent heat pumps, solar panels, battery storage systems, and flexible electricity tariffs.
The Series B funding round was led by private equity firm Altor, Swedish investor Kinnevik and Signapore state-owned investment firm Temasek, and also includes the Burda family, Collaborative Fund, Nesta Impact Investments, and Statkraft Ventures.
Lingotto, an Italian investment firm chaired by George Osborne, the former British chancellor, also participated in the investment round, which Aira said was oversubscribed after it set an initial fundraising target of €85m.
Lisa Barclay, executive director at Nesta Impact Investments, said “the scale of Aira’s ambitions for the UK market is exactly what is needed to meet the country’s net zero commitments”.
“Aira is making the transition to greener heating more accessible and affordable, filling a gap in the market for heat pumps by providing them without the usual upfront costs and with an end-to-end service from insulation and installation to aftercare,” she said.
The latest fundraise follows previous investment rounds which saw it raise €35m from individual backers at Vargas, followed by a further €87m equity raise from investors last year.
In addition, the Polish government has granted Aira €15m to support the development of a heat pump factory in the country, where it aims to commence production of its first intelligent heat pumps in the first half of 2024. In total, Aira has secured €195m in equity funding and grants to date.
The new capital investment announced this week is aimed at spearheading Aira’s ambitions to “take Europe off gas”, it said, highlighting the 130 million fossil fuel boilers that are currently being used by households across the continent and account for 10 per cent of Europe’s total CO2 emissions.
The company claims switching to an air source heat pump with Aira can enable households to slash their heating costs by up to 40 per cent while also reducing their CO2 emissions by 75 per cent, rising to 100 per cent if the source of electricity is fully renewable.
Martin Lewerth, Aira Group’s CEO, said the firm’s new shareholders would bring “invaluable strategic insights, networks, and expertise” to help further expand the business.
“Together, we are committed to spearheading the much-needed green revolution in residential heating,” he said. “The completion of our Series B funding makes us well capitalised and ready to accelerate our pan-European platform expansion, significantly reducing both heating bills for households and carbon emissions across Europe.”
In related news, UK climate tech start-up Furbnow has secured £950,000 in pre-seed investment from a range of backers to help bring its home energy efficiency platform to market.
The funding announced last week was led by SFC Capital, with participation from Norrsken Accelerator and angel investor Faniel Luhde-Thompson. It also includes a grant from UK government agency Innovate UK as well as Mission Studio, a collaboration between innovation agency Nesta and Founders Factory, Furbnow said.
It comes as the firm gears up to support Birmingham City Council’s upcoming trial to improve the energy efficiency of households in the city that are ineligible for energy efficiency grant funding support.
Becky Lane, co-founder and CEO of Furbnow, said the firm’s aim was to retrofit one million UK homes by 2030 by reducing the hassle for householders at every step of the process.
“We’re building Furnow to be the go-to platform for homeowners who want advice and support as they plan and install low carbon technologies and energy efficiency elements in homes,” she said.
Don’t forget to get your entries in for this year’s UK Green Business Awards ahead of the March 1st deadline.