70+% of energy usage in the typical home comes from heating, cooling, and water heating. 2.9% of household income is spent in New York on electricity each year. Add in heating oil and homeownership becomes very costly, very quickly. Dandelion Energy has built a geothermal system that replaces a home’s existing air conditioning and heating systems by placing underground pipes below your property. At a basic level, in the winter, the pipes push heat stored in the ground into your home, and in the summer, the pipes take away heat from your home. As society shifts away from a dependency on fossil fuels, customers are able to take advantage of federal, state, and utility subsidy programs that are available to reduce the cost of installation and upgrade for less than what they are paying presently.
AlleyWatch caught up with CEO Michael Sachse to learn more about the promise of widespread geothermal adoption, the company’s future plans, latest round of funding, which brings the total funding raised to $65M, and much, much more.
Who were your investors and how much did you raise?
Dandelion Energy, the nation’s leading home geothermal company, announced today the close of a $30 million Series B round of funding. The raise was led by Breakthrough Energy Ventures with participation from existing investors, including GV, NEA, Lennar Corporation, Collaborative Fund, Building Ventures, Catchlight Ventures, and GroundUp.
More than 70% of energy usages in homes comes from heating, cooling, and water heating. Installing a Dandelion Geothermal Heating & Cooling System can reduce a home’s carbon emissions by as much as 80%, all while eliminating the need to buy heating fuel. Dandelion’s innovative business model aligns federal, state, and utility incentives so that homeowners can upgrade to geothermal for less than they’re currently paying to heat and cool their home. This new investment enables the company to expand operations while continuing to invest in research and development which has made Dandelion the industry leader.
What inspired the start of Dandelion Energy?
The Dandelion team began working on creating more cost-effective geothermal solutions while working at Google parent company Alphabet’s X lab and in May of 2017, Dandelion launched as an independent company.
How is Dandelion Energy different?
Dandelion is on a mission to enable the widespread adoption of geothermal by creating a smarter, more affordable, and more innovative approach than any other heating/cooling system on the market.
What market does Dandelion Energy target and how big is it?
We are targeting one of the largest greenfield markets in the world – the home heating and cooling market. To begin, our focus is on the 7.5 million homes in the US that use heating oil and propane, but there are tens of millions of homes that use natural gas for heat. All of them will need to move to more sustainable options, and we’re going to be there for them.
What’s your business model?
Dandelion’s innovative business model aligns federal, state, and utility incentives so that homeowners can upgrade to geothermal for less than they’re currently paying to heat and cool their home.
How has COVID-19 impacted the business?
Covid had a dramatic effect on our business. We were forced to furlough nearly 75% of our workforce in March. We have been lucky to be able to bounce back, but it still impacts us.
What was the funding process like?
It’s never easy, but it’s been heartening to see investors view climate-oriented businesses as desirable, rather than something to be avoided. We were lucky to have a lot of interest.
What are the biggest challenges that you faced while raising capital?
Our business is operationally complex, and that’s not for every investor.
What factors about your business led your investors to write the check?
Well, you’d have to ask them! But my guess is that we are tackling a critical problem, have real traction doing it, and don’t have any competition to date.
What are the milestones you plan to achieve in the next six months?
This new investment enables the company to expand operations while continuing to invest in research and development which has made Dandelion the industry leader.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Be realistic about what your business is and who it will appeal to. A lot of companies don’t see themselves accurately, and the process of learning can be time-consuming and painful.
Where do you see the company going now over the near term?
We are focused on growth. Growing geographically, and also growing our operational capacity.
What’s your favorite outdoor dining restaurant in NYC
Anyplace with pizza.