Munich With the first takeover in the company’s history, the heating app provider Tado now also wants to enable its customers to buy electricity more cheaply. “We are expanding our business model and want to be the leading energy efficiency and energy management platform in Europe,” Tado co-founder Christian Deilmann told Handelsblatt.
To this end, Tado has now taken over the flexibility marketing specialist Awattar. With its solutions, Tado users should, for example, charge their electric car or the heat pump’s buffer storage tank exactly when the electricity is particularly cheap, because there is a lot of wind or solar energy, for example.
In phases when electricity is very expensive, the charging process can be interrupted for a while. “In this way, the power grids are also relieved in critical moments,” explains Deilmann. This could save customers around ten to 40 percent of their electricity costs.
Tado is one of the leading providers in the smart home sector, which deals with the networking of apartments. The start-up has developed an app with which heating and air conditioning can be intelligently controlled. In this area, the company sees itself as the market leader in Europe despite strong competition.
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For example, the heating can start in good time before the apartment owner comes home from work. The control also uses the mobile phone to recognize when the residents leave a room or the house. Sleep times are taken into account as well as the position of the sun.
High synergy effects
“The Tado and Awattar business models are highly synergetic,” says Deilmann. The takeover brings the further developed vision of becoming the leading energy efficiency and energy management platform in Europe a decisive step closer.
The Austrian company Awattar is a pioneer in the flexible electricity marketing market in German-speaking countries. On the one hand, the company offers electricity suppliers the technological platform for flexibility marketing and also has a specific offer for private customers – including Tado customers.
Tado paid the purchase price partly in cash and partly with its own shares. According to industry estimates, Awattar should generate eight-digit sales this year.
According to Deilmann, the founders of Awattar, Simon Schmitz and Peter Netbal, are highly motivated and will stay on board to further expand the business. “We want to offer the connection to all of our customers,” said Deilmann. More than 400,000 buildings and households are currently networked with Tado, and the Munich-based company also claims that it works with twelve of the 20 largest energy providers in Europe.
With the connection to cheap electricity purchases, Tado also wants to differentiate itself from the increasing competition. Because some have now discovered the market for themselves.
Big competitors
The start-up Vilisto, for example, has developed a solution in which sensors detect whether there are people in the room – and, if not, lower the temperature automatically.
Large corporations are also active in the field. Google took over its competitor Nest in 2014 for an astonishing three billion dollars, but it still plays a subordinate role in Europe. In addition, the heating industry is pushing into the Internet of Things, albeit at a late stage. For example, Vaillant has developed a control app that users can use to activate predefined profiles such as “at home”, “night” or “away”.
With the takeover, Tado is now venturing into the field of flexibility marketing. This should also help to alleviate one of the central problems of the energy transition.
Because sometimes electricity from wind and solar power is available in abundance while demand is low. At other times it’s the other way around. There is not yet enough storage space to compensate.
There are now a number of providers such as Esforin (Energy Services for Industry) who specialize in the flexibility marketing of electricity.
If the grids are full and overloaded, Esforin buys cheap electricity for its industrial customers. They can then automatically run up ovens and systems for a short time, for example, a little more strongly – and then turn them down a little and release electricity when electricity prices rise.
Flexibility marketing for private households
Tado now wants to enforce flexibility for private households on the market so that they can also integrate their heat pumps, electric cars or photovoltaic systems into the system.
In its core business, things have recently been going well for the company. “We have benefited from corona and stay-at-home effects and are clearly among the winners of the crisis,” said Deilmann. “Many invested in their own homes, especially during the lockdowns.” In view of the high electricity prices, efficiency solutions are currently particularly in demand.
According to industry estimates, Tado’s turnover is likely to have increased by a double-digit percentage to a mid-double-digit million amount last year. With similar growth rates, it should not be long before sales exceed the 100 million euro mark.
In recent years, the company has raised well over 100 million euros for expansion. Prominent investors could be won. For example, the internet retailer Amazon acquired a stake in the company three years ago. Eon, Siemens and Total are also involved.
In the most recent round of financing last May, Tado acquired around 38 million euros. In addition to existing investors, the Noventic Group also took part, which among other things offers intelligent solutions for reading off heaters.
With the help of Noventic, Tado, which has so far mainly been strong with private customers, wants to gain access to thousands of customers in the housing industry. According to its own information, Noventic has equipped 8.2 million apartments with technology and sees itself as a “pioneer for climate-smart buildings”.
More: Digital remote reading and smart thermostats: This is how heating 2.0 works.