The German startup Tado has found a strong international corporation as an investor: the Japanese electronics manufacturer Panasonic.is investing €30 million in the heating app specialist. The joint cooperation in heat pumps is now set to be significantly expanded. “The heat pump is the heating solution of the future worldwide,” Tado founder Christian Deilmann told Handelsblatt.
Tado and Panasonic announced a collaboration last year : Tado’s software can automatically optimize and control Panasonic heat pumps. Ideally, these heat pumps should also fill their buffer storage when electricity is cheap. The partnership is not exclusive, but the Japanese company offers its systems in Europe directly with the Tado control system.
Europe is an important market for Panasonic, Enrique Vilamitjana, Head of Panasonic Heating & Ventilation Air-Conditioning Europe, told Handelsblatt. The Japanese company has state-of-the-art heat pumps. “Tado can make them even more efficient.” Furthermore, the Tado control system is used in many households with conventional heating systems. If these households also switch to heat pumps, they could jointly offer solutions for the transformation.
Tado currently has around one million customers. If even just ten percent of households still using conventional heating were to switch to a heat pump, it would be an attractive business. According to Deilmann, the partnership is currently in its start-up phase with several hundred customers. “We now want to scale up.”
On the way to becoming a “unicorn”
According to industry sources, Tado was valued at a mid-three-digit million euro amount as part of the financing round. Tado is among the 50 fastest-growing and most influential venture-backed technology companies in Europe , according to the Tech Tour platform, an association of leading European investors.
“Once Tado became a unicorn with a billion-dollar valuation, it would probably have been more difficult for us to enter,” said Ryohei Ogawa, strategy manager at Panasonic. A unicorn is defined as a startup with a valuation of at least one billion euros.
According to Tado, a complete takeover was not even considered. Tado’s business model relies on the technology being open to different providers. According to industry estimates, the company’s revenue grew by around 25 percent last year.
Tado isn’t the only company with an app control for heat pumps. Manufacturer Stiebel Eltron, for example, connected its devices to the internet more than ten years ago. Tado founder Deilmann, however, points out that his app could also be used to control individual rooms, for example. Customers currently have to purchase a one-time so-called Heat Pump Optimizer for €249. When purchasing Panasonic heat pumps, customers can purchase the Tado products directly, thus optimizing the pump’s operation.
Buy electricity when it’s cheap
Tado’s flagship product is a smart heating app, which also includes a special radiator thermostat. The system can detect, for example, when a user leaves work and heads home and preheat the apartment. Using the phone’s location function, the control system knows when a resident leaves a room or the house.
The company also offers dynamic electricity tariffs. For this purpose, the Munich-based startup acquired the Austrian company Awattar, a specialist in flexible electricity marketing, at the beginning of 2022. With the help of the Vienna-based IT platform, Tado users can, for example, charge their electric car or heat pump’s buffer storage precisely when electricity is particularly cheap, for example, because a lot of wind or solar energy is being fed into the grid. During periods when electricity is very expensive, the charging process can be interrupted.
These flexible tariffs will now be used for heat pump control. In the long term, Tado aims to shape its own energy transition this way: Currently, revenue from controlling fossil-fuel heating systems accounts for 90 percent of its business, while heat pumps account for 10 percent. “One day, that will be the other way around for us,” says Deilmann.
The heat pump is the most efficient solution in most cases, said Panasonic manager Vilamitjana. “However, politicians need a reliable regulatory framework and, above all, predictability for business decisions and available subsidies.”
In the past, there had been uncertainty among consumers. The sector may have grown a little too quickly in 2021 and 2022, and the following years were challenging. “But now the market is picking up again.” Heat pumps are a stable growth market in the long term.
Continuation of funding is unclear
Heat pumps powered by electricity are not only more economical, Vilamitjana said. “They also represent an opportunity for Europe to become more energy independent, as they are not dependent on oil and gas.”
In Germany, owners of existing single-family homes who live in them have been able to apply for government subsidies to replace old gas and oil heating systems with renewable alternatives for just over a year now. Since May 2024, this also applies to private owners of multi-family homes—i.e., landlords—and homeowners’ associations, for example, with central heating.
According to the current federal government, there have been 35,800 applications for these subsidies since January of this year alone , most of them for the installation of heat pumps. Last year, a total of 227,000 applications were received by the responsible development bank, KfW. Now, however, the industry must wait and see what happens under the new federal government.
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