The increase comes a year after the German company announced plans to go public (“deSPAC”) through a special purpose acquisition company (SPAC), plans that ultimately fell through after the Luxembourg-based shell company GFJ ESG Acquisition I SE pulled out of the deal in September.
Founded in 2011, Tado is best known for its smart thermostats and platform for managing home heating and cooling systems. The platform includes geofencing smarts that control a home’s temperature based on whether someone is in the house, while also being able to detect and alert users to open windows.
To date, Tado has raised nearly $160 million in funding, with notable investors including Amazon pouring money into the company, not to mention industrial manufacturing giant Siemens and energy company E.On.
More than a decade after its founding, it seemed that Tado and its major financiers were on course to make their big exit last year, after unveiling plans to land on the Frankfurt stock exchange with a valuation of €450 million ($ 490 million) in tow. However, Tado and his SPAC partner unveiled in March that they “adjusted” the enterprise value to about €400 million ($436 million) due to “current market volatility,” before finally closing the deal six months later.
Little more was revealed about the reasons behind this, although it was fair to assume that with falling technical valuations and economic headwinds driving major downsizing efforts in just about every sector, Tado and GFJ ESG Acquisition were simply getting cold feet about the timing of it all. .
“We have decided to end the ongoing discussions regarding a deSPAC GFJ ESG Acquisition I SE due to the current conditions in the public capital market,” Tado’s chief product officer Christian Deilmann explained to TechCrunch. “We value and value our partnership with GFJ ESG and share similar goals for building a more sustainable future for Europe and the world.”
And so Tado has chosen to double its recent growth, which it claims will surpass 3 million smart thermostats sold since inception by 2022. With a new $46.9 million in the bank, the Munich-based company said it wants to scale its business in two ways – one of which is to appeal to customers looking for combat rising energy costs by combining so-called “time-of-use” energy tariffs with its smart thermostat products.
Time-of-use rates essentially encourage users to use electricity at specific times when it’s cheaper, and Tado bought a company called Awattar last year that shifts the electricity load by means of such tariffs
“We will help our customers even more to reduce heating costs,” said Deilmann. “Until now, our focus was on reducing energy demand, now we also help to reduce energy costs with our smart energy tariffs. With a smart energy tariff, special heat pumps are controlled in such a way that they do not run at times of the day when energy prices are high. Everything happens automatically in the background while always maintaining a perfect indoor climate.”
In addition, Tado said it plans to partner with real estate companies that manage rental properties, which could help Tado scale.
While it’s impossible to ignore the widespread layoffs that have permeated the tech industry over the past year, Tado said it hasn’t had to downsize anyway so far and doesn’t expect to.
“We currently have 200 employees at Tado, the majority of whom work at our headquarters in Munich,” Deilmann said, adding that it also has remote workers in the UK and Austria.
However, all this leaves a lingering question. As a 12-year-old company with about $200 million in funding, some sort of exit seems a little overdue — it’s previous funding round in 2021 was intended to be the final increase before exploring a sale or public listing. So can we expect an IPO in the future – SPAC or otherwise?
“While we would like to consider Tado’s public listing in the future, we have no updates on this, whether through a public listing of our own or through a SPAC,” said Deilmann. “Our current focus is to continue our strong growth path to double our business year-over-year and become profitable in 2023.”