Dandelion, a Google subsidiary that provides geothermal heating and cooling for homes, just raised $70 million to expand its business as demand grows.
The startup was focused on heat pumps before tools to decarbonize buildings are now in the spotlight. Dandelion powers the heat pump through optimized geothermal drilling in the home’s backyard. After drilling hundreds of feet underground, the Dandelion taps into a safe thermal reservoir during the winter, and pumps draw heat from the house to cool it in the summer.
Now the company is digging deeper into its capital reserves. The funding was led by Lennar’s national venture capital arm for housing and NGP’s investment arm for energy transition. Breakthrough Energy Ventures participated along with several other investors.
本轮融资旨在延续去年3000 万美元的B 轮融资，但â�<“需求比我们预期的要多，”首席执行官Michael Sachse 告诉Canary Media。本轮融资旨在延续去年3000 万美元的B 轮融资，但â� The round was supposed to build on last year’s $30 million Series B, but “demand was higher than we expected,” CEO Michael Sacks told Canary Media. The B-1 funding therefore exceeds the company’s previous total funding of $65 million.
“There is a widespread perception that heat pumps will be an important part of the solution to decarbonize buildings,” Sacks said. â�<“投资者正试图了解他们如何在热泵领域发挥作用。” â�<“投资者正试图了解他们如何在热泵领域发挥作用。” “Investors are trying to figure out how they can play in the heat pump industry.”
Dandelion finished Google X in 2017 with several promising residential scale geothermal IPs. Prior to that, people could hire a local contractor to drill a well in their yard, but nobody had tackled home geothermal as a technology problem and innovated on it with Silicon Valley–style R&D. Prior to that, people could hire a local contractor to drill a well in their yard, but nobody had tackled home geothermal as a technology problem and innovated on it with Silicon Valley–style R&D. Prior to this, people could hire a local contractor to drill a well in their yard, but no one saw home geothermal energy as a technology challenge and innovated it with Silicon Valley-style R&D. Before that, people could hire local contractors to drill wells in their yards, but no one took geothermal energy as a technical challenge and innovated with Silicon Valley-style R&D.
The technology is great, but Dandelion needs to prove that customers really want it. The startup is moving operations to New York State, where it can compete with greasy old oil-fired heating systems to provide cleaner heat and save on fuel costs. In Westchester County, the Con Edison utility couldn’t even provide homes with new gas connections, so Buttercup stepped in to fill the void. To date, the company has installed 1,000 systems in New York, Connecticut and Massachusetts, tripling its commercial operations since early 2022.
At the same time, macroeconomic trends make Dandelion’s offerings more attractive. A growing number of households are citing energy costs as a problem due to the soaring energy prices caused by general inflation and Russia’s invasion of Ukraine. Congress has provided thousands of dollars in tax credits for home electrification under the Inflation Reduction Act, and groups like Rewiring America are touting the benefits of heat pump technology.
The easiest way to install geothermal heating in your home is as part of a new build, which gives Lennar value as a strategic investor. Sachs said Dandelion will use some of the new capital to work with developers to develop the new build market.
So far, Dandelion has been mainly concerned with retrofitting existing homes and fine-tuning the relatively non-invasive installation to suit client yards. But he still has to deal with the time problem: Homeowners who recently paid for fossil fuel heating don’t want to tear it down and replace it before it breaks. When heating equipment breaks down, people usually want to find the quickest and easiest way to replace it.
The Dandelion product costs about twice as much as a new fossil gas stove and air conditioning system, Saxe says. But once installed, geothermal systems can cost as little as one third of the cost of operating traditional heating and cooling systems.
Customers can currently take out a loan from Dandelion, allowing them to access their monthly energy savings without having to pay a large amount of money up front. The system typically pays for itself within seven years, after which customers receive much lower heating and cooling bills, Saxe says.
But a new federal policy in the Inflation Reduction Act may soon give clients more funding options. Historic climate legislation offers households a 30% tax credit for ground source heat pumps like the Dandelion, while third-party systems can receive a 40% tax credit if they meet domestic manufacturing standards. Prior to this law, heat pumps owned by third parties were eligible for a much lower tax credit.
Once these loans go on sale, companies like Dandelion will be able to finance heat pumps, monetize higher tax credits, and collect payments from customers over time. This can expand the pool of clients who want to implement this technology.
“From a company standpoint, we think that if we can build 2,500 to 5,000 homes a year, that’s the size of a public company,” Sachs said. He added that home heating and cooling electrification is a big enough market to support multi-billion dollar companies as regions like Europe and states like California and Washington move to move away from fossil fuel heating.
He added that the new funding gives Dandelion a runway of at least two years, with the goal of reaching or approaching break-even cash flow during that time.