Startup of the Week – Tado, the intelligent heating app to cut Europe’s energy costs

tado_team
tado_team

The team behind Munich-based startup Tado have big plans for their smartphone-enabled heating control system. They’re providing users with a way to save money by reducing their heating costs – aiming to have a positive effect on both the environment and consumers’ wallets.

This was enough to let them impress the judges at the recent Pitch Fight battle at the Heureka Conference, coming out on top against the 16 other startups competing. We caught up with Tado’s Managing Director and CMO, Leopold von Bismarck, to find out how the startup is saving their users an average of 27 per cent on heating and why doing things in-house is always the best route..

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Hi Leo, who are you and what are you doing?

Hi, I’m the CMO of Tado. Tado is the most advanced intelligent heating control system. It’s a smartphone-based geolocation app which lets you save energy on heating – 27 per cent on average.

It knows when people leave the house by monitoring their smartphone and lowers the temperature accordingly. As soon as it notices the first person heading home, it increases the temperature so it’s warm when you arrive. At the same time, it includes weather data, so on a sunny day Tado might decide to heat less, conserving energy and avoiding the overshooting of inside temperatures. Users don’t have to interact at all with the system because Tado knows what you’re doing, knows what the temperature outside and inside is and adjusts to your schedule.

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Who are the founders, what have you done before and how did you find each other?

I am one of three Managing Directors, together with Christian Deilmann and Johannes Schwarz. Christian is the CEO and he founded the company with Johannes in 2011, I joined shortly after. I’ve know Chris from our childhood, we grew up together in Dusseldorf. Chris and Johannes knew each other from studying at university. They have already launched and sold a company together in the mobile area, it’s called BellPepper.

How did you come across your idea?

Chris spent some time in the US studying and living with some American housemates. They’d always fight about having the heating run all day – Chris wanted everyone to switch it on when they get home, but the others disagreed. This resulted in an excess amount of energy usage. Chris noticed when he got back to Europe that the same problem is happening here. He realised that heating systems here really don’t have a modern regulation system that adapts to people’s behavior or the weather automatically that is easy to use, cheap and multi-vendor compatible. So he decided to make the first prototype in late 2010 and founded Tado in early 2011.

Is the system reliant on your smartphone? What if you leave it at home one day? 

Tado works in two ways – with mobile on iOS or Android, or via the web app. So you can still use it even if you don’t have a smartphone or leave it at home one day. Although, since you don’t carry your computer all day, you wouldn’t have the geo location. But you can still set time schedules – when you say people are usually home or go to work or bed. The weather forecasting, the information we show for energy consumption and the inside and outside temperature can all still be used. The time schedule and smartphone goes hand in hand – if one of them says “I want it warm now”, it overrides the other.

The heating control box on the wall also has a button, so if you press it, it goes to the home temperature you’ve set as ideal.

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Who are your competitors and what makes you different from them?

There’s Nest in the US – they are doing a great job. But we have a strong software and cloud focus, they have more of a hardware focus. So they’ve basically taken a nice iPhone with a retina screen and put it on the wall and called it a thermostat. It tracks when people have left the house because it notices there’s no movement. For us, basically all we have is a connector kit that connects your heating system to the cloud. We don’t focus on the hardware; we take the smartphones we have in our pockets that already work really well and we use them. We don’t need another smartphone on the wall.

How many users do you have?

Thousands across Europe.

What is your business model?

We charge €99 per year including all features, plus you need the hardware to use it. That is free for this spring; it’s a deal we’re doing.

Who is financing you?

We have two VCs on board, Target Partners and Shortcut Ventures.

Is there something you’re missing?

We’re looking to close a Series A round. We’re also looking for a new office in Munich – we are too crowded at the moment, because we have 26 staff! Plus we’re always looking for people to hire.

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I think a team focus is important. Also, at Tado, 100 per cent of the value chain is built in-house. It’s not easy at the beginning, sometimes you have to fall back on an agency to do development or PR, say, but if you feel it’s possible I think the best way to go is have as many of your resources in-house as possible. It shortens the ways of communication and makes you faster. Because you can’t loose a single minute when you’re building up your company.

Where will you be in a years time?

We’ll have users internationally – we want to go to a few European countries. We’ve seen a lot of traction in the UK, so we want to move there. Our product is currently compatible with almost every major brand of heating system in Germany and Europe, but of course there are still brands that we need to develop on a software side. Hopefully, by the end of the year we will be compatible with 99 per cent of all heating systems.

Germany is known for being very progressive when it comes to energy efficiency. Are you getting any government support?

Tado received funding from the government, but we got VC money at the same time so weren’t eligible to accept it. We are one of the companies in Climate-KIC, an EU funded program. They’re providing funding, expertise and networks – they hold masterclasses plus put us in touch with other great companies in the industry.

We want to get more involved in the political discussions of the energy transition in Germany and we definitely want to be part of that transition. We feel Tado is a great way to look at it from a bottom-up perspective because everyone can be a part of making a change. All you have to do is hook up the hardware – it’s so easy. The whole energy supply system will become a lot more de-centralised in the future. Now, you have big utilities that produce the energy, but in the future there will be more micro-power plants in the basements of houses or photovoltaic cells on the roofs. So everyone will produce their own energy. When this happens, the amount of energy management needed will be a lot higher – we want to spearhead this transition with Tado.

Image credit: Flickr user AngieD.

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