If you heard you could reduce your home energy usage by 60%, would you be interested? Robert Downey Jr., along with venture capital firm Fifth Wall, are betting you would. They've both invested in Sealed, a home wellness start-up company based in New York City that promises to modernize residential HVAC systems.
About the deal
Sealed, founded in 2012, recently raised $16 million in Series B funding, bringing the total this company raised to $33 million. Sealed plans to use the money to expand outside New York, first entering the New Jersey and Connecticut markets and then focusing on other similar markets with older homes and extreme weather conditions. The new funding comes as a result of Sealed experiencing 200% year-over-year growth in 2020.
The lead funding comes from Fifth Wall's Climate Technology Fund, a fund that invests in technologies that help the real estate industry combat climate change. The category is called "Climate Tech," of which Sealed falls into. A growing trend in real estate is going "green" as opposed to using fossil fuels.
Another big investor is actor Robert Downey Jr., through his FootPrint Coalition Ventures. Downey points out that about $50 billion is wasted in energy that leaks out through the roofs of more than 33 million homes across the country.
Cyrus Capital Partners and CityRock Ventures also participated in the funding round.
Sealed promises to reduce a homeowner's heating and cooling bills by upgrading HVAC systems, property insulating the home, and installing LED lighting and smart thermostats.
The shtick is customers pay Sealed only if they do indeed save money on their energy bills. The way it works is that Sealed pays all upfront costs to modernize the home's energy systems, and if the improvements don't result in better, more efficient energy usage, the homeowner doesn't pay. But Sealed most likely ensures that won't happen. Most repayment plans are scheduled for 20 years.
The secret sauce
The way Sealed determines the best way to improve energy usage is through a machine-learning algorithm that studies a homeowner's actual usage and energy consumption throughout the year and then uses that data to predict future energy usage, leading to potential savings.
Many homes are prone to air leakage from improper insulation, which is wasteful and expensive. And many homes use fossil fuel furnaces that waste energy and cause air pollution. After the upgrades, Sealed says a homeowner can reduce their energy use by an impressive 60%, a possible win-win for consumers and the planet.
The Millionacres bottom line
Old HVAC systems are largely inefficient and can contribute to as much as 20% of greenhouse gas emissions. But most homeowners probably aren't particularly motivated to upgrade their current system unless they have to. Andy Frank, president and co-founder of Sealed, said, "At America's current rate of retrofits, it will take more than 500 years to modernize our homes."
Sealed's mission is to make homes cleaner for the planet and more comfortable for the homeowner, and the company thinks it can accomplish this by fronting the money for the improvements. If you believe green is the future of real estate, you might want to look into companies like Sealed that are modernizing how homes function and capitalizing on the increasing interest in climate change.