SWEDEN: Stockholm-based investment group Vargas has announced its entry into the European heat pump market with Aira, a direct-to-consumer company offering heat pumps on a monthly subscription.
The new start-up company is currently piloting in Italy and will launch in Germany and the UK in the autumn.
The company has also acquired a 55,000m2 production facility in Wroclaw, Poland, taking over a former Volvo bus factory. The Volvo staff have been offered jobs with the new company and production is scheduled to start there in 2024.
The holding company, Vargas, was formed in 2014 by entrepreneurs Carl-Erik Lagercrantz and Harald Mix. In addition to Aira, Vargas has launched three other companies – energy storage developer Polarium in 2015, battery cell manufacturer Northvolt, also in 2015, and steel producer H2 Green Steel in 2021.
Vargas says it expects Aira to be present in more than 20 markets in the next 10 years, with more than 10,000 “clean energy experts” and technicians employed across Europe and be serving five million European homes.
These are big figures. The man charged with delivering them is CEO Martin Lewerth. He joined Aira in January of this year from the Scania Group, where he was executive vice president.
“What is unique with Aira is our high degree of vertical integration,” Lewerth told the press during the company’s launch on Friday (June 6).
Unlike the largely “disconnected” traditional manufacturer, distributor, installer chain, Aira says it will take direct to consumer end-to-end responsibility, offering a monthly subscription from as little as £75.00 with no upfront product or installation costs.
“We develop our own products and, as a direct consumer brand, we design our products with the end user in mind. We also design them for quick and simple installation and for large scale manufacturing,” Lewerth said.
In addition to the new factory, Aira is also establishing its own salesforce. “We want to provide consumers with a consistent high quality experience and really teach the consumer, bring their awareness up.”
In order to make this happen, Lewerth said they needed to employ 1000s of clean energy technicians. “So we’re building our own installation force setting up our own Aira training academies across Europe, making sure that we can retrain and upscale existing gas boiler engineers to be great heat pump installers and ambassadors.”
Aira says it will use a hybrid sales model involving “a lot” of consumer marketing. “As a direct to consumer company, we’re really going to make sure that first of all, we have the high visibility online.
“We will make sure that our own sales staff they really make in-home visits, making sure that you get a well designed solution for every single home and try to explain the concept especially in the beginning,” Lewerth added.
Overall, the launch was short on actual detail. The Cooling Post has requested further information and is awaiting a response.
Reports suggest that the venture has so far cost around SEK300m (€26m), with the Financial Post reporting that Aira is about to finalise a further SEK1bn (€86m) financing round. Harald Mix is also quoted as saying that further financing of ”a couple of billion kronor” would be required to scale up production in the second half of next year.
Large questions remain about the product. No details were given on likely capacities, any trials, or progress with testing or certification of the product. Also, no indication was given of what the company will be selling in the launch countries of Italy, Germany and the UK when production of its own-brand heat pump won’t start until sometime next year?
All Martin Lewerth did reveal was that the new heat pump would be using propane.
Intriguingly, the new Aira website features images of heat pumps from German manufacturer Vaillant. A spokesman for Aira admitted that the heat pumps that are piloting in Italy are Vaillant but re-iterated that production of Aira-branded heat pumps would begin in Wroclaw in 2024. The company has not yet responded to a subsequent enquiry as to whether this meant that Vaillant units would, at least initially, also be sold by Aira in the UK and Germany.
While the company has been tight-lipped about the product, the company is known to have recruited a number of experienced technical design and R&D personnel to its Stockholm headquarters. Some of these, not surprisingly due to the country of origin, have come from Swedish heat pump manufacturer Nibe.
What is also known is that Aira is currently recruiting in the launch countries, centred on offices in Milan, London and Berlin.
Social media searches suggest that the CEO of Aira in the UK will be Daniel Särefjord, former MD of home security firm Verisure. He joined Vargas in January and is also chief compliance officer of Aira.
Amongst those joining him in the UK as service operations director is Matt Isherwood, who until recently was director of heat pumps and retrofit at British Gas.
While both the above claim to be working for Aira UK, no such company name has yet been registered at the UK’s Companies House. However, a Vargas company called Heatly Ltd was registered 12 months ago with Aira CEO Martin Lewerth as the sole director. It is listed under the categories plumbing, heat and air-conditioning installation and wholesale of hardware, plumbing and heating equipment and supplies.
CORRECTION: The operators of the Heatly website, Thormer Solutions Ltd, has asked us to point out that it is nothing to do with Vargas. Heatly Ltd is an unrelated business.