Largest private placement in the German IoT sector in 2018: USD 50 million for tado
Munich — With the support of investment bank Bryan, Garnier & Co, Munich-based smart thermostat provider tado has raised $50 million (€43 million) in a new round of funding, attracting internet giant Amazon and energy company E.ON, among others, as new investors. This makes it the largest private financing round to date in the German IoT (Internet of Things) sector and the largest in Europe in the Internet of Things for private households.
Founded in 2011, the flagship Internet of Things company has raised a total of over USD 100 million (EUR 89 million) in capital to date. This also makes tado one of the three best-funded providers of energy efficiency solutions in Germany (after Sonnen with 147 million euros and Heliatek with 138 million euros). In addition to Amazon, the new investors in the provider of smart thermostats and home climate management services include energy companies E.ON and Total, as well as U.S. VC investor Energy Innovation Capital, WS Capital and the European Investment Bank (EIB). Previous backers include German venture capitalists Target Partners, Shortcut Ventures and BayBG, as well as the Siemens Group. Bryan Garnier has supported all four financing rounds since 2014.
Up to 31 percent heating cost savings / Apple as exclusive retail partner
The smart thermostats from tado connect heating and air conditioning systems to the Internet and help save up to 31% on heating costs. The smartphone-connected devices detect, for example, when residents leave the house or windows are opened, allowing them to automatically adjust temperatures efficiently. Since its founding, the company, which currently has 180 employees, has doubled its user base annually to around 400,000 users. The tado retail partners include Amazon, Saturn and also Apple, which exclusively sells the Munich-based company’s thermostats in 111 European Apple stores. For its 34 so-called Solution Partners, such as the German E.ON or the Austrian Verbund, tado°’s SaaS offering enables them to intensify customer loyalty.
The market for smart thermostats is expected to grow by 54% annually until the end of 2022, when it will be worth USD 6.8 billion (EUR 5.9 billion). A key driver here is also the rise of home assistants such as the Apple Home, Google Assistant and Amazon Alexa. “We are convinced that soon every building will be intelligently heated and cooled. Now is exactly the right time to raise additional capital and leverage it to establish tado as number one in this growing market,” says Toon Bouten, CEO of tado.
Serious competitor to Google Nest
With the newly raised funds, tado intends to expand its service offering and further penetrate the European market. Unlike its U.S. competitor Nest, which was bought by Internet company Google in 2014 for $3.2 billion, tado thermostats are easy to integrate into standard smart home systems and work with virtually all heating systems commonly used in Europe.
“tado has grown rapidly since its founding and is a serious competitor to Google Nest. This has convinced Amazon as well as E.ON, Total and other leading investors,” emphasizes Falk Müller-Veerse (photo), Partner and Head of Germany responsible for Bryan Garnier’s German business. “This is one of the largest private financing rounds in 2018 in Germany and the largest in the IoT sector — and with top investors. We are very proud to have been able to accompany this German flagship growth story for years.”
About Bryan, Garnier & Co
Bryan, Garnier & Co, founded in 1996 in Paris and London, is an investment bank focused on European growth companies with offices in London, Paris, Munich, Zurich and New York. As an independent “full service” investment bank, it offers comprehensive financing advice and support along the entire life cycle of its clients — from initial financing rounds to a potential sale or IPO with subsequent follow-up financing. The range of services includes equity analysis, equity sales and trading, private and public capital raising, and M&A services for growth companies and their investors. The focus is on key growth sectors of the economy such as technology (TMT) and healthcare, but also smart industries & energy, brand and consumer goods, and business services. Bryan Garnier is a registered broker and licensed with the FCA in Europe and FINRA in the US. The company is a partner of the London Stock Exchange and Euronext.