Swedish startup gains €1 million for heat pump market expansion

Stockholm-based greentech company DREM has raised €1 million in funding from investors Peak, byFounders, Redstone, and Futurum Ventures to support its expansion in the French market for heat pumps. Founded in early 2023, DREM simplifies the heat pump purchasing process and aims to make heating more cost-efficient through a digital platform that uses pricing algorithms and AI to adjust energy use based on weather and electricity prices. Despite a challenging market with mild winters and high interest rates, DREM expects to double its sales in 2024, with a current annual revenue run rate of €10 million. The additional funding will bolster the company’s growth in France, and DREM is considering further European expansion in 2025.

DREM was launched in Sweden at the beginning of 2023 with the vision of simplifying the purchase of heat pumps and reducing operating costs. To solve this, the company is, amongst others, using digital pricing algorithms and an AI that optimizes heating based on weather data and electricity hourly prices.

Just before the summer, DREM expanded into France, where scooter company Lime’s former country manager, Antoine Bluy, was hired to lead the operations.

“The buying process for heat pumps is usually quite a complicated story, no matter which country you look at. Our model is digitalizing and simplifying the process, which also allows us to quickly scale up operations to more countries. France is Europe’s largest market for heat pumps and we see significant growth potential here,” said Babak Tighnavard, CEO and co-founder of DREM.

Despite unfavorable market conditions, with a mild winter climate and high interest rates, the company looks set to more than double sales in 2024. At the same time, the Swedish heat pump industry lost 43 and 50 percent respectively in sales during the first two quarters of the year. DREM has an annual revenue run rate of €10M and has doubled the number of employees during the year, reaching a total of 40.

“We see continued growing demand and the interest rate cuts that have taken place and are ahead of us across the region will benefit the entire industry. The additional funds from our four largest investors allows us to accelerate expansion in France, while we are also evaluating a launch in another European country in 2025,” said Babak Tighnavard.

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