Meet Thermondo, a pioneer of the heating transition
Berlin-based Thermondo was founded in 2013 on the belief that the energy transition can only work with a successful heating transition. The company digitizes the processes around the modernization of heating systems – from lead generation, sales, financing, subsidy provision, installation to after-sales runs. Today, Thermondo is one of the fastest growing companies in Germany and has already enabled over 28,000 customers to modernize their heating systems. Together, they have reduced over 79,000 tons of CO2.
We sat down with Philipp Pausder, CEO and co-founder of Thermondo, to talk about the young company’s journey to date, its current focus on heat pumps and hopes to reduce the barriers to low CO2 heating for homeowners.
Can you tell us a bit about what your company does, what problems you solve for your customers, and what you are focusing on at the moment?
Philipp: Thermondo is the largest planner, seller, financier, and installer of residential heat solutions in Germany. The majority of our processes run on our proprietary software, which essentially means we are able to scale something that nobody has ever scaled before. We are growing at 60-70% per year and are currently in the process of boosting our product portfolio with the heat pump. All of our solutions are available as rental products, which means no upfront costs and an all-inclusive package for our customers.
How did you come up with the idea for Thermondo?
Philipp: Residential heat accounts for approximately 25% of all primary energy consumption in Germany and 13% of all CO2 emissions in the EU. We will not be able to decarbonize our societies if we do not decarbonize this large segment. In 2013, we realized that we had all the ingredients of a great opportunity: The market is huge, successful change is of extreme importance for our societies and nobody else had a truly customer-first mindset.
How can modernizing heating systems help us to reach ambitious climate targets? Are we on the right track?
Philipp: Around 13% of all CO2 emissions in the EU come from residential heat. We actually know how to bring this to zero. But to get there, we need to reach out to millions of homeowners, plan a solution, finance it and ultimately execute the project. So, we are talking billions of process steps – you simply cannot do this without software.
No, we are currently not on track. Change has to happen much faster. Research studies state that we need 4-7 million heat pumps in Germany by 2030 to be on track. We currently have 1 million. As the market and innovation leader, we very clearly understand that it is our responsibility to lead the way by reducing transaction barriers to make homeowners’ transition from fossil fuels to heat pumps as easy as possible.
In your opinion, what is currently the biggest opportunity and the biggest challenge in the residential heating sector?
Philipp: Opportunity: Being the first to be able to scale fossil to heat pump projects and deliver tens of thousands of them per year.
Challenge: A scarcity of trained technicians.
Thermondo aims to become Germany’s largest decentralized energy supplier. What business opportunities/ventures are you eyeing to help you get there?
Philipp: We have more than 28,000 customers. Our research clearly shows that we have a lot of brand equity with them and they trust us. Based on this trust and the fact that we are adding 7,000 customers this year and approximately 11,000 next year – plus we know our customers very well – we will be able to sell products like power, photovoltaics (PV), home storage and all boxes to these homeowners. We will start doing so in 2023. 2022 will be all about the heat pump.
The maturity of our processes and platform also positions us to work with retail partners. Any company that has direct access to the 16 million homeowners in this country is a potential partner for us.
What do you look for in an investor? What value does Future Energy Ventures bring to the table?
Philipp: The team at FEV has a lot of sector expertise. Everybody at FEV has an energy mindset. It helps to have that on board, next to for instance a digital mindset. We need to be good at so many things. In addition, FEV has been a very loyal and reliable investor, trusting and supporting myself and the team. This kind of continuity helps us to build a large, impactful company.
Future Energy Ventures’ view on Thermondo
We are proud to accompany Thermondo on its mission to accelerate the energy transition within the heating market, helping more and more households to modernize their heating systems and reduce their CO2 emissions in the process. Philipp and the team have done an outstanding job at finetuning and scaling their innovative software solution while maintaining a sharp focus on customer needs. We believe the business is well primed to lead the decarbonization of the residential heating sector in Europe.
Learn more about Thermondo at https://www.thermondo.de