A British start-up that wants to do to the domestic boiler market what Purplebricks is doing to the residential property sector is raising a seven-figure sum from the online estate agent’s chairman.
Sky News understands that Hometree, which describes itself as a “next-generation energy company that will provide the services every connected home needs”, will announce this week a funding round worth £2.9m.
The capital injection is being led by Literacy Capital, the family office vehicle of Paul Pindar, the Purplebricks chairman who was previously chief executive of the outsourcer Capita Group.
A former boardroom colleague of Mr Pindar at Capita, Dawn Marriott-Sims, is also investing in Hometree and will become the company’s new chairman.
Mr Pindar’s recruitment as a shareholder is significant, because of his track record as an angel investor at companies such as Purplebricks and Eve Sleep, the mattress-maker.
Both of those businesses are now listed on the London Stock Exchange.
The funding round comes as Hometree accelerates plans to tackle the dominance of the major UK residential energy suppliers – initially through the boiler market, which is worth £3.6bn a year, but eventually becoming a much broader home services provider.
It says it wants to expand beyond London and Essex in the coming months, and to increase the number of freelance gas engineers tenfold to 500 by the end of this year.
It also wants to at least quadruple its full-time workforce to 100 during the same time-frame.
Hometree uses technology – deploying video technology for consultations with experts, instead of more expensive home surveys – to offer a boiler installation service at prices up to 50% cheaper than those of British Gas.
Its digital service also promises a more seamless, customer-friendly experience than those of the big six utilities.
The start-up was launched in 2016 by Simon Phelan, its chief executive, who has drawn investment from prominent venture capital firms including LocalGlobe and DN Capital – another early-stage Purplebricks backer.
Mr Phelan believes that entering the market through a relatively archaic service such as boiler installation will allow Hometree to demonstrate to consumers an ability to link skilled tradespeople with premium customer service and best-in-class technology.
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“As homes become more technology-dependent and homeowners increasingly pay for a range of products on a subscription basis, we think they will seek a provider that can manage the end-to-end – the installation of the hardware, the 24/7 tech support and repair services, and the seamless coordination of everything,” he said.
Ms Marriott-Sims said the “convergence of two trends – energy infrastructure becoming more distributed and the internet of things – provide the opportunity to create a brand new home services model that more closely serves homeowners’ needs in today’s world”.