Hometree, a London-based ‘technology-enabled’ boiler installation business, has raised £4.8 million in funding in its first year.
The digitally-led boiler installation company says that it is shaking up the market in the same way that Purplebricks has challenged the traditional estate agency model, and Eve has changed the way people buy mattresses, claiming to deliver a boiler installation service at prices typically 35-50% cheaper than British Gas.
It does so by selling online, cutting out unnecessary costs like home surveys and boiler salespeople through the use of video consultations with Hometree Gas Safe experts, and through an online platform where homeowners can book appointments and installation dates, receive quotes, pay online, arrange finance and receive reminders about servicing.
Literacy Capital, chaired by Paul Pindar, also the Chairman of Purplebricks and former CEO of Capita, is investing more than £1.5m in the tech business, as part of an injection of £2.9m of new capital intended to help Hometree expand rapidly during 2018.
Other new investors include former Joint Chief Operating Officer and board member of Capita, Dawn Marriott-Sims, who will become the tech company’s Chairman and Anthony Gutman, Head of UK at Goldman Sachs. Many of Hometree’s initial backers, including DN Capital, LocalGlobe, Oxford Capital and Jon Moulton, have also contributed new investment at this stage.
Hometree was founded in 2016 by Irish entrepreneur Simon Phelan, an engineer who had previously worked for private equity investor Jon Moulton.
Simon said: “We’re thrilled that, without even looking for new money, we have attracted investment from some of the City’s most experienced investors and business leaders with exceptional operating experience at the highest levels. We have grown rapidly in our first trading year but this fresh injection of capital will enable us to scale faster than we anticipated.
“The business experience and knowledge that Paul, Dawn, and Anthony bring to the business at this stage will be invaluable to us as we gear up for serious growth, potentially leading to a much larger fundraise later in the year.”
Hometree’s new funding will help it build up the business in 2018. At present, Hometree employs 25 full time people and 50 freelance gas engineers. The company aims to increase this to between 100 and 125 staff and 500 freelance gas engineers by the end of 2018.
HVP reached out the company to enquire more about their engineer workfore. Simon said: "We primarily work with sub-contracted engineers, whose work is overseen both in-house and on-field by Hometree-employed engineers. All the engineers we partner with go through a rigorous onboarding process, involving phone and face to face interviews, technical assessments, and a probation period, ensuring we only work with the best engineers in the market.
"Our engineers are sent on-site with a pre-completed scope of works and bill of quantities, both derived from the survey. All materials for the job are pre-ordered meaning the engineer is fully resourced to focus exclusively on delivering a great install for the customer. We follow all our installs with feedback reviews and any lingering queries are managed by an in-house customer support team."
Hometree currently operates in London and Essex and expects to begin boiler installations in towns and cities throughout the South East, Southampton and Bristol during summer 2018.
Simon said: “As homes become more technology dependent and homeowners increasingly pay for a range of products on a subscription basis, we think that they will seek a provider that can manage the end-to-end installation of the hardware, the 24/7 tech support and repair services, and the seamless coordination of everything.
“Starting in boilers, a large established market compared to some of the more nascent smart home ones, gives us the opportunity to show how Hometree can offer all these services with the level of transparency and immediacy that those who use online services have come to expect.”
While the Hometree website lists a limited, if market leading, selection of boilers, Simon reassured us that customers are able to request any products they desire, while the company seeks to build relationships with those companies that their customers choose first.
He said: "We prefer to promote manufacturers who can assure us of the right customer support and after-sales service levels, but can in actual fact offer and install any product requested by our customers. In our experience, it is these manufacturers that our specific customers tend to prefer to work with anyway, so we have worked on building relationships with them to get the best products and prices to pass onto our customer base. However, in 2018 we will also be expanding our offering."