Arch – a data intelligence platform for HVAC contractors – announced that it had raised $6.2 million in seed funding from Gigascale Capital, Coatue, Floodgate, ReGen Ventures, and MCJ Collective. This investment comes as most Americans want to electrify their homes during a time of a shortage of installers and high upfront costs.
Arch aims to ease both by transforming the sales process and making heat pumps the obvious financial and performance choice for contractors and homeowners. And the company will use the funding to grow its engineering team and expand its customer base in the Northeast and California.
Contractors usually face time-consuming sales processes and low conversion rates, spending 80% of their time on leads that won’t convert – which is a cost-shared across every installed heat pump. Arch’s System of Intelligence for Revenue Generation integrates data from over 12 sources across internal (e.g., CRM, ERP) and external (e.g., satellite real estate footprints) and utilizes proprietary algorithms to offer intelligence beyond workflow automation. This platform enables contractors to quickly analyze homes, optimize heat pump systems, and will soon include savings calculations. And with these insights, Arch will unlock competitive point-of-sale financing and further boost contractors’ sales.
Electric heat pumps have been outselling gas furnaces as consumers navigate roller coaster energy prices, increasingly frequent heatwaves, and take advantage of federal, state, and utility incentives. And this critical decarbonization technology cools and heats with much lower carbon emissions compared to traditional air-conditioners and furnaces that rely on fossil fuels. Analysis by RMI indicates that replacing a gas furnace with a heat pump can reduce up to 93% of climate pollution.
Rewiring America’s analysis estimated that the Inflation Reduction Act (IRA) will provide American households with an average of $10,600 for full electrification, saving them an average of $1,800 annually on energy bills. And in September 2023, a coalition of 25 states, representing 55% of the U.S. population, committed to installing 20 million residential heat pumps by 2030. The International Energy Agency estimates that the U.S. must invest $160 billion annually by 2030 to meet its goals.
Arch was designed to help contractors capitalize on increasing demand by making their work more efficient. And it cuts down the time spent on paperwork, site visits, and creating estimates.
This platform works similarly to Aurora Solar and is well-placed to benefit from the expected growth in the HVAC sector, which is predicted to grow rapidly like the solar industry. And once a system is designed, the goal is for contractors to utilize Arch’s savings forecast to provide homeowners with a clear view of a heat pump’s long-term return on investment. Plus, Arch plans to provide its comprehensive insights to lenders to unlock the industry’s most competitive point-of-sale financing.
Arch is also backed by notable angel investors, like Chris Hopper and Sam Adeyemo, the cofounders of Aurora Solar. So far, Arch has processed over $4 million of heat pump sales through the platform and expects that amount to be 10x or more in 2024.
KEY QUOTES:
“I was a solar installer myself, have been on the road with contractors, and know how frustrating it is to invest time upfront and miss out on a sale. Heat pumps are currently a black box. By providing insights to contractors, homeowners, and financiers, we’re helping them translate heat pumps into a financial opportunity.”
- Phil Krinner, Co-Founder and CEO of Arch
“Between falling technology costs, energy volatility, and compelling incentive – heat pumps are becoming a no-brainer for households looking to save money. The Arch team is well positioned to take advantage of an exponential growth curve in heat pumps that is set to mirror the growth in solar.”
- Victoria Beasley, Partner at Gigascale Capital
“Arch’s data intelligence platform seeks to solve an important piece of the heat pump installation puzzle for HVAC contractors. We are excited to partner with Arch in this new era of climate-conscious HVAC solutions and we look forward to supporting them on their mission to transform the $126 billion HVAC contractor market in the US.”
- Jaimin Rangwalla, Senior Managing Director at Coatue
“Arch is revolutionizing the way we work. Having implemented Arch across all our locations in the Northeast and leveraged Arch’s innovative home analysis, automated design, and estimate generator, we’ve made our sales process more efficient. Integrating Arch into our workflow has been a game-changer for growing our business. We are proud to partner with Arch.”
- Scott Arnold, founder of RYCOR
