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Arch: Helping HVAC Contractors Reduce Carbon Emissions by Installing Heat Pumps

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By: Headliners News / March 6, 2024

Meet Arch, an innovative venture-backed startup who has recently unveiled an ambitious plan to revolutionize the HVAC (heating, ventilation, and air-conditioning) industry, specifically focusing on the installation of heat pumps, which is poised to be the next frontier in residential decarbonization after solar. The startup has recently secured $6.2 million in a seed funding round led by prominent investors such as Coatue, Floodgate, Gigascale Capital, MCJ Collective, and ReGen Ventures.

With an increasing emphasis on reducing carbon emissions and promoting sustainable alternatives, the U.S. aims to install 15 million heat pumps across 25 states by the end of the decade, with nine states targeting 90% adoption in residential heating, cooling, and hot water equipment by 2040. The shift toward heat pumps, however, faces challenges, primarily in the laborious and time-consuming installation process associated with HVAC equipment.

Arch, led by co-founder and CEO Phil Krinner, identifies a critical bottleneck in the HVAC industry related to quoting new projects. Krinner noted that contractors spend three to five hours on potential customers, with a sales conversion rate of only 20 to 25%, leading to significant resource wastage and frustration. Arch aims to streamline this process and boost the adoption of heat pumps by introducing innovative software solutions for HVAC installers.

The company’s algorithm, developed after extensive industry research and contractor shadowing, allows for quick estimates by leveraging publicly available details about a home, such as square footage, number of rooms, and construction date. By suggesting an appropriate heat pump capacity within minutes, Arch’s software significantly reduces the time-consuming quoting process, giving contractors valuable tools to promote the adoption of heat pumps.

While Arch acknowledges that the estimating algorithm may not be perfect, the unique characteristics of heat pumps, which can dynamically vary their output, make precision less critical. The startup is strategically positioned to capitalize on the momentum building in the heat pump market, particularly in the Northeast, where reliance on oil heating is still prevalent due to spotty natural gas infrastructure.

The recent seed funding will enable Arch to expand its geographical footprint, refine its estimating algorithm, and introduce additional features to its software. Among the planned features are a tool predicting homeowners’ utility bill savings and a marketplace connecting lenders with homeowners seeking financing for heat pumps. These innovations align with Arch’s broader mission to accelerate the adoption of heat pumps and contribute to residential decarbonization.

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