Today, DREM announces a EUR 2M capital injection by Peak. In addition, angels such as Edgeir Aksnes (CEO & Co-founder of Tibber) and Peter Lindholm (CEO & Co-founder of Frontier Car Group) have invested in DREM during the spring. The funding is fuel to accelerate DREM’s expansion.
The renewable energy space is bustling with potential driven by increasing energy prices, climate change awareness, and governmental initiatives to achieve net zero. Today, we are thrilled to announce that Peak invested in DREM (Distributed Renewable Energy Movement), a pioneering marketplace that simplifies heat pump installations for homeowners.
Heat pumps leading the way to net zero
Heat pumps have reached an inflection point with increased consumer demand, boosting sales and product innovation – similar to EV a few years ago. The key advantage of heat pumps is that they’re highly efficient compared to combustor systems. Heat pumps do not generate heat; instead, they transport heat from A to B. Thanks to that fundamental difference, they are highly efficient. Sweden, DREM’s country of origin, has one of the highest heat pump penetrations in Europe and was one of the Union’s top five biggest heat pump markets last year. Hence, the DREM team has years of insights to grasp when expanding globally.
Interest in heat pumps as an alternative to traditional systems is bolstered by rising fossil fuel prices and regulatory pressure. New European regulations, such as the German government banning new oil and gas heating systems, are a critical factor in market timing.
Renewable energy and net zero emissions remain high on the EU and global agenda. The European Union is committed to reaching net zero by 2050, a target we are today far from reaching. As energy is the most significant source of greenhouse gas emissions in the EU, increasing renewable energy is crucial to attaining this target, and heat pumps play an essential role in doing so. And the shift is already happening; Europe witnessed a ~40% increase in heat pump sales last year, with 3 million units sold. This number is expected to rise to a whopping 13 million by 2030.
Simplifying difficult installations and solving the bottlenecks
Despite the massive potential of heat pumps and the innovation in the field, consumers, producers, and installers face a handful of challenges when it comes to heat pump installation. That is where DREM steps in.
1) Consumers struggle with hefty price tags and confusing information. The high upfront cost is the most significant barrier to consumer adoption. A typical heat pump installation can range from ~ 8,000 to 20,000 euros, making it a substantial investment for many households. Much of this cost is due to inefficiencies in the installation process, similar to solar panels, where costs decrease significantly due to improved installation processes.
Additionally, consumers need more information and guidance to navigate the complex world of renewable energy systems, making the decision-making process daunting. DREM helps consumers with simple and high-quality heat pump installations through a marketplace that matches the consumer’s installation project with the best-fitted installer using a tailormade algorithm. They provide the consumer with a seamless end-to-end experience with access to a hassle-free installation process, finding the best-fit hardware, and financing options. While access to the hardware is limited today, availability will increase as heavy investments pour into manufacturing heat pumps. Today, DREM partners with producers worldwide to ensure hardware access across regions.
2) For producers, competition in the market can pose a significant challenge. As the demand for renewable energy solutions increases, more companies enter the market, leading to a fierce battle for customer attention and market share. DREM offers the producers the possibility of reaching more installers, including installers globally.
3) Installers face the challenge of a skills gap in the renewable energy sector. As the demand for heat pump installation grows, there is an increased need for skilled technicians to carry out these installations. However, the supply of qualified technicians has not kept up with this growing demand. Thanks to the increased demand, though, we are seeing a shift in the market where fossil fuel system installers retrain and shift towards heat pumps. The industry is catching up, and so are installers who can use DREM to optimize their projects, increase their capacity, and match the right project based on their qualifications.
The DRE(A)M Team
A stellar team is behind the wheel of DREM, bringing a wealth of experience from the renewable energy market and marketplaces. Babak Tighnavard was one of the first employees at Otovo, the Nordic leader in solar panels, where he launched operations in six European markets. Babak's passion for energy transformation is striking and as well as contagious.
David Sennerlöv and Hannes Palm are joining Babak, as CTO and COO, respectively. David has +10 years of experience in technical leadership positions and leads DREM’s tech team. Hannes earned his stripes for four years at McKinsey before joining health tech innovator FRISQ as Head of Business Development. Together, they have hit the ground running, propelling DREM from pre-everything status to a company with customers and revenue – all within the last few months.
We at Peak are beyond excited to support DREM's journey to increasing and simplifying renewable energy usage, simultaneously addressing climate change concerns and leading towards a net zero future. With investments in companies such as Enersee and CarbonCloud, we are happy to continue contributing to a more sustainable future, and with DREM, making a significant contribution towards the global climate goals, one heat pump at a time.
Shoutout to byFounders, Wiski, and Redstone – we look forward to working alongside you. And to Felicia and Tim, who led the investment process from Peak’s end.