AV8 Ventures leads $8.5m investment round into online boiler installation company Hometree
Published on: 25th September 2018
- Hometree, the online-led boiler installation service, has secured $8.5 million in financing from a group of leading investors led by newly formed AV8 Ventures
- Existing investors include Paul Pindar, Jon Moulton, DN Capital, LocalGlobe, and Mark Hutchinson (former CEO of GE Europe), amongst others.
- This next round of funding will allow Hometree to go national across the rest of the UK over the next 18 months and move beyond boiler installations into offering a broader home services proposition
Hometree, the online-led boiler installation service, has secured $8.5 million in financing from a group of leading investors led by AV8 Ventures in its Series A funding round. Hometree, launched in 2016, has been spearheading a much needed shake-up of the UK boiler market by putting control back into the hands of consumers, where previously the industry has been opaque and uncompetitive, with limited consumer knowledge.
At a time when Amazon has moved further into the home services industry with its acquisition of Ring.com earlier this year, this latest investment represents another significant development to a rapidly changing market.
This is one of the first investments for the newly-formed €150m fund, AV8 Ventures. AV8 Ventures has strong insurance industry connections and is investing in digitisation of business, AI/ML and is looking to enable the Connected Home. With Hometree's strong online and offline heating proposition, and the coming trends in IoT and smart, connected homes, integrating insurance into the Hometree proposition could result in a highly attractive consumer offering.
The deal is also noteworthy as Miles Kirby, Managing Director of AV8, already sat on Hometree’s board during his time at one of their early VCs, Oxford Capital. Upon leaving to set up AV8 he made Hometree one of his new fund’s first deals.
Other investors in the round include Paul Pindar through Literacy Capital, Jon Moulton, DN Capital, LocalGlobe, Ian Nolan, and Mark Hutchinson (former CEO of GE Europe), among others.
Since closing its last investment, led by Paul Pindar in January 2018, Hometree is on track to see year on year growth of more than 400%. It has developed the industry’s first full e-commerce solution enabling customers to buy a boiler online without speaking to an agent and has recruited a world-class executive team with CFO (David Lee), CMO (Paul Lewis), Brand Adviser (James Kydd) & Industry Adviser (Rob Gladwin) all joining the business.
This next round of funding will allow Hometree to invest in its brand and go national across the UK over the next 18 months. The investment will also enable the business to move beyond boiler installations into a broader home services proposition, with smart home and insurance key areas the business is exploring.
Hometree was founded by Simon Phelan, an engineer who began his career at Jon Moulton’s private-equity firm Better Capital, and Andreu Tobella, also an engineer who headed up the product team at British Gas owned subsidiary, Hive.
In the boiler market specifically, a huge market with 1.7m units installed in the UK each year, consumers have historically had to choose between paying a significant premium to go with British Gas, or go with a local tradesman who they may not know or trust, and who may not be able to offer the same benefits in terms of finance plans and extended warranties. Hometree are championing a radically more transparent, convenient & trustworthy model, ending the industry’s most unsavoury tactics such as high pressure sales tactics in the home.
Simon Phelan, Founder and CEO, Hometree said: “We never started Hometree with the ambition of just building an online boiler installation service, and this investment from one of the world’s largest financial institutions is testament to the market opportunity we recognised in the broader smart home space. By taking a highly customer centric approach to a long underserved market, we have seen significant growth, and have developed a fantastic platform to offer increasingly attractive products & services into the home.”
Miles Kirby, AV8 Ventures said: “I have been tracking Simon and his team up close over the last two years, and as I set out on my own entrepreneurial journey with AV8 Ventures I am delighted to be able to continue to work with them by leading their Series A funding. Hometree’s execution in the boiler installation market has been stellar and their opportunity in this market alone is highly attractive, but this twinned with their planned expansion into the smart home is completely in line with AV8 Ventures’ vision for the modern home, and one that we are very excited about being involved with.”