Munich Gas is scarce and expensive. Many customers are therefore looking for intelligent systems to save on heating. “Demand has more than doubled in the past few months,” Tado co-founder Christian Deilmann told Handelsblatt. The company has developed a heating app and sees itself as the market leader in Europe.
With “Smart Home” solutions, light and heating can be controlled digitally. But so far they have been a niche business. According to the Bitkom industry association, this has changed. Bitkom President Achim Berg believes that smart home technologies could make a very concrete contribution to using less heating energy. “They are much more than a technical gimmick.” In a Bitkom survey, around 53 percent of all users stated that their energy costs had fallen through the use of smart systems.
According to estimates by industry circles, between ten and 20 percent of all households in Germany use intelligent heating controls, in the Netherlands it is 25 percent, according to Tado. “This means the breakthrough into the mass market has been achieved,” says Deilmann. In view of the increased gas prices, the purchase of the smart Tado thermostats pays for itself after just a few months. The trend will remain, also because of the fight against climate change.
Smart thermostats: Tado plans sales of 100 million euros
Tado will have sold around three million systems across Europe by the end of 2022, including a special radiator thermostat. This year alone there will be around one million smart thermostats. In view of the boom, according to industry estimates, the company will generate sales of around EUR 100 million in the current year – much earlier than previously envisaged in the business plans.
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As favorable as the business environment was for the company, the capital market environment is currently developing unfavorably. Tado actually wanted to go public in the spring via a so-called Spac deal. A company merges with an empty company shell that is already on the stock exchange.
Tado aims to be profitable by 2023
However, the Spac euphoria has evaporated, also with Tado. The start-up has since canceled its IPO project. Due to the boom, they are expected to be profitable as early as 2023 and want to remain a private company without a stock exchange listing for the time being, says Deilmann. “We are fully financed for the next few years.” In a few years, when the company is significantly larger, a stock market listing could be targeted again.
The growth targets remain ambitious: Tado CEO Toon Bouten wants to increase the company’s sales to 500 million euros by 2025. Because the application examples for the company’s technology are numerous.
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For example, Tado’s app can recognize when an employee leaves work and drives home, and can preheat the apartment in advance. The controller also recognizes via the mobile phone when the residents leave a room or the house again. Customers should be able to save an average of 22 percent of their heating costs.
However, the competition in the smart heating control segment is fierce: in 2014, Google took over its competitor Nest for three billion dollars. The US giant is currently still concentrating primarily on its home market, but according to industry estimates in Europe it is likely to be Tado’s biggest competitor.
Heating contractors compete with Tado
The heating engineer Vaillant has also developed a heating control app that users can use to activate predefined profiles such as “at home”, “night” or “away”. “We are seeing an increasing demand for solutions for intelligent heating control,” said Germany Managing Director Tillmann von Schroeter to the Handelsblatt.
Vaillant offers an internet module and apps for the controllers of its heating systems, which also give users an overview of their energy consumption. In 2023, the next generation will come onto the market with additional functions. A cloud-based service for optimizing the energy efficiency of heat pumps is also being piloted. Bosch has also developed a number of smart home solutions.
Tado announces acquisition of Awattar
Shortly before the announcement of the IPO, Tado had announced the first acquisition in the company’s history. With the takeover of Awattar – a specialist in flexible electricity marketing – customers will be able to buy electricity more cheaply in the future. According to industry estimates, Awattar recently achieved double-digit million sales.
With the help of the IT platform from Austria, Tado users can, for example, charge their electric car or the buffer storage tank of the heat pump exactly when electricity is particularly cheap, for example because there is a lot of wind or solar energy. In phases when electricity is very expensive, the charging process can be interrupted for a while.
More: When is it worth using a heat pump?
First publication: 11/21/2022, 1:31 p.m.