Swedish startup Aira is the youngest member of a high-profile group of climate tech companies. Like climate tech unicorns Northvolt and H2 Green Steel, it was founded by billionaire entrepreneur Harald Mix and seeded by funding from his investment firm Vargas Holding.
Aira, which supplies heat pumps and home energy tech to consumers, raised €87m in Series B funding in October last year. It’s now extended that Series B by a further €58m, bringing the total to €145m — a significant sum given Aira is just over a year old.
The new funding was led by Singaporean sovereign wealth fund Temasek — which also put money into H2 Green Steel — alongside Altor, a private equity fund run by Harald Mix, and Swedish investment firm Kinnevik.
Speaking to Sifted, Aira CEO Martin Lewerth says Temasek’s interest in the company is part of its wider sustainability push. “They are trying to make sure that a much bigger share of their portfolio will be coming from zero CO2 emission initiatives,” he says.
Temasek’s existing portfolio includes carbon-heavy businesses such as Singapore Airlines and Sembcorp Marine, which builds oil rigs.
Aira’s heat pump push
Heat pumps — which use pressure to heat up air in an energy-efficient process — are seeing ramped-up startup activity. Aira’s competitors include German startup Enpal, which has raised $633m.
Aira is now active in Italy, Germany and the UK. The startup has expanded internationally by acquiring a heat pump installation company in each market and then growing organically from that point. Lewerth says growth in the three markets has been “very positive” — though Aira doesn’t yet share customer numbers.
“We are operating at full speed in all three markets,” he says. “Our effort now is to make sure that we bring in additional employees; we’re trying to recruit installers and salespeople to the company to keep up with demand.” Aira runs academies to train both salespeople and installers.
At present, the company installs heat pumps made by third parties. Its end goal is to produce them itself and it’s acquired a former Volvo factory in Poland to do so. Lewerth says he anticipates manufacturing at the site to begin in the first half of this year.
The new fundraise will go towards the factory, as well as R&D, so Aira can iterate on its heat pump design.
An unpriced round
Aira’s raised a significant amount of money for a young company. The latest round is unpriced — meaning the company does not receive a valuation and investors don’t know precisely how much equity they are purchasing.
Setting up factories and supply chains is a capital-intensive endeavour — though not perhaps as capital-hungry as Northvolt and H2 Green Steel, both of which are building sites from scratch rather than acquiring existing factories like Aira has done.
“The whole green transition will require big investments and we are no exception, so we will raise money again,” says Lewerth. “The timing of that all depends on how fast we want to expand and grow in the markets and how fast we scale up the factory.”
Aira has bold ambitions. “We've been clear that our ambition is to be in more than 20 countries over time,” he says, “but we have not made any firm plans on which country and when to go there.”
This article was updated to reflect that production is expected to begin in the first half of this year.