Last year, Americans bought more heat pumps than gas furnaces, a striking split that’s likely to widen in the coming years as consumer awareness and climate regulations foster their uptake.
Heat pumps are already widely used to cool homes across the Southeast, and they’re making inroads in the Northeast and Midwest, where consumers are warming to the concept of using one device for both heating and cooling. But despite their growing appeal, not all consumers are sold on the idea. Some find the technology unfamiliar; others find it unattractive to look at.
Quilt hopes its product can tip the scales. Founded last year by a trio of former Google employees, the startup has been hard at work designing smaller, sleeker and smarter heat pump systems. Today, Quilt is announcing $9 million in a seed round led by Lowercarbon Capital and Gradient Ventures, with participation from Incite Ventures, MCJ Collective, Garage Capital, Climate Capital and Spacecadet.
Many heat pump systems are in fact so-called ductless mini-splits, which are notable for the indoor unit that hangs high on the wall. For the amount of heating and cooling they provide, the indoor units aren’t big, but they’re not sleek either.
“A lot of people, in the purchase process, they get hung up on this idea that they have to put big, ugly white plastic boxes all over their house,” Paul Lambert, co-founder and CEO, told TechCrunch+. Many units also use TV-style remotes instead of traditional thermostats, and most aren’t compatible with smart thermostats like Nest. “It feels, in some dimensions, like a step backward.”
The company hopes to follow Nest’s lead and create a smart product that’s defined by better design and consumer friendliness. But where Nest added some smarts to a home’s existing heating and air conditioning system, Quilt hopes to catch consumers as they upgrade the whole thing, leveraging what might be considered an HVAC supercycle. Much like how people upgrade iPhones in waves, the team’s founders think the time is right to dive into the heat pump space.
“There’s been an inflection point in the last year, year-and-a-half,” said co-founder and COO Bill Kee. “People are coming to installers, proactively asking them about this. I think that’s due to the Inflation Reduction Act, and frankly, the great media coverage around it.”
As consumer sentiment has shifted around climate-friendly purchases in recent years, people are considering alternatives to simply replacing their old systems with one of the same. Plus, the Inflation Reduction Act, which was passed in August, offers generous subsidies for those who switch to heat pumps.
The changing climate itself is also driving more people to consider heat pumps. One of the main benefits of all heat pumps, not just Quilt’s, is their ability to both heat and cool efficiently. That’s spurred interest in regions like the Northeast, where oil for home heating has become extraordinarily expensive, and the Northwest, where record-breaking heat waves are driving people to install air conditioning for the first time.
Many manufacturers make heat pumps that will plug into existing central heating and air units that regulate a home’s temperature through a series of ducts. But Quilt is focusing instead on ductless units, which are more efficient. Because the units can be installed in every room, each room can have its own temperature profile. (It’s also more efficient to move heat through pumped fluids than blown air.)
“Most people are heating their living room while they’re sleeping in the winter, and they’re wasting a ton of energy,” Lambert said. “You get zoning out of the box with the ductless units.”
Zoning can also improve a home’s comfort. Anyone who has a set of south-facing windows knows how hot those rooms can get in the summer. In the winter, a zoned HVAC system can temper the heating in that room on a sunny day, while in summer, it can ramp up the cooling. Quilt’s system is designed to have a mini-split head in every room in the house.
“What we’re actually able to do is model every room individually,” said co-founder and CTO Matthew Knoll. “We know what the outside temperature is going to do, we know what the occupancy is going to be like, and we can actually choose the right way of controlling it to get the most efficiency and get the most comfort.”
To fit in every room in the house, Quilt has redesigned the indoor part to be significantly shorter than the competition, which should help it fit above windows and doors, where many people prefer them placed.
Quilt isn’t entirely reinventing the wheel here. The company is working with an Asian supplier to manufacture the systems, so compared with the competition, the Quilt’s fundamental stats will be competitive, but not necessarily groundbreaking.
While the company hasn’t unveiled its designs yet, it did share a sneak peek at some prototypes, and I can say they look significantly more attractive than those on the market today. Quilt hopes to unveil a finished product and open a reservation system sometime next year.
Slick design will undoubtedly sell many units, but the zoning and software smarts might sell more. Given Quilt’s focus on design and smarts to rethink home HVAC, it’s no surprise that there are more than a few Nest alumni on the team. Also unsurprising: Nest co-founder Matt Rogers is an investor through his firm Incite Ventures.
Quilt is almost certain to face stiff competition from existing players like Mitsubishi, Daikin and Carrier, but the global heat pump market is forecast to grow from $72.4 billion last year to $136.8 billion in 2030, according to Grand View Research.
Navigating the transition out of the seed stage is never easy, but if Quilt can execute, finding customers shouldn’t be a problem.
