Intellihot was founded in 2009 with the goal of making commercial buildings more efficient by reducing the expense and physical footprint of keeping them warm and dry. The startup just launched a $50 million funding round in order to shake up the $81 billion global HVAC sector, with intentions to grow globally. Aegon Asset Management and the Avenue Sustainable Solutions Fund were the lead investors in the round.
When you go inside an office building, you will notice security guards, elegant business plaques on the walls, and maybe a Christmas tree or two around this time of year.
What you do not see is what goes on beneath a building’s floors, walls, and ceilings, and if you have never paused to ponder the tremendous amount of magic that goes on beneath a structure’s floors, walls, and ceilings, you have probably never realized how intricate a contemporary office building can be. Buildings require hot water in addition to the obvious — power, internet, and an infinite and vitally important supply of caffeinated hot drinks.
“Hot water availability is paradoxically omnipresent, vital, and easy to miss – until you don’t have any.” Intellihot has seen the huge opportunity to combine hardware and software into a smart, ecologically friendly solution to enhance how commercial buildings use hot water,” said John Larkin, head of Impact Investments and co-manager of the Avenue Sustainable Solutions Fund.
“Intellihot exemplifies our concept of partnering with exceptional companies that can generate financial performance while also benefiting society and the environment.”
When the hot water stops running, as Larkin points out, things rapidly become uncomfortable. The problem with hot water is that it is extremely time-sensitive. If there are apartments or gyms in the building, 7 a.m. is a tremendous peak, and if the hot water runs out, the building managers’ phones will ring nonstop.
Unfortunately, heating and maintaining hot water is prohibitively expensive, especially when hot water demand is lower than typical. Intellihot is tackling all of the above by providing tankless, on-demand water heating solutions for hotels, restaurants, stadiums, hospitals, and other commercial structures.
“You know, we started it as complete outsiders, with no prior experience in the industry.” I’m obsessed with energy loss; every time I see a car’s radiator or tailpipe, I know its sole job is to heat the environment,” says Sridhar Deivasigamani, Intellihot’s creator and CEO. “When my water heater broke at my house, I felt the same way.” Since then, we’ve completely revolutionized the way water is heated and distributed.”
In many cases, having a huge water tank means that hot water is accessible right away while more water is being heated. This is practical and provides a buffer, but maintaining the temperature of a huge tank of water is quite costly.
According to Consumer Reports, the popularity of tankless, on-demand water heaters is increasing in private households, while commercial buildings are lagging far behind. Building and updating medium to large commercial buildings requires a lot of planning and engineering, which is one of the largest problems in this field.
The area is dedicated to hot water in buildings normally built for water tanks, which take up an 80 percent bigger footprint than Intellihot’s heaters. There hasn’t previously been much motivation to transition to a tankless system once the space is available and the energy cost of heating the water is factored into the overall energy expenditure of the building — but that is progressively changing. Deivasigamani asserts, “We are the first new startup in this field in about 100 years.” “The main three corporations in this field all started in the late 1800s,” says the author. As a result, generations of builders, construction engineers, and contractors believe that this is the only way to accomplish it.”