After launching for 15 years, energy innovation company Effy raises $22 million
Effy at a crossroads. The France-based energy innovation company is doing well, but it is addressing a much larger market than anticipated. That’s why it’s betting. The company just closed a funding round of 20 million euros (about 22 million dollars at today’s exchange rates) from The capital city of Felix. This is the first round of external funding for the company.
“Our story begins 15 years ago,” founder and CEO Frédéric Utzmann told me. “We tackled this market very early on because we really believed in it.”
At first, Effy wasn’t a tech-enabled startup. The company has worked on energy innovation for public buildings, residential buildings and industrial facilities. “We started with energy-intensive projects with a very ‘traditional’, old-fashioned business. But this allows us to grow the company in a self-funded and profitable way,” said Utzmann.
Soon after, the company started acquiring useful websites and services for energy innovation projects. In 2011, the company acquired Analytics, a tool that helps you calculate how much you can get from public grants for energy innovation work. In 2015, Effy acquired extinguishing energya VC-backed startup can calculate how much you will save by isolating the roof, changing the windows, etc.
At the same time, Effy’s traffic began to increase rapidly. Search engine optimization leads to more organic traffic. Effy started building a network of key contractors and redirected homeowners to these partners.
In 2019, Effy chose to focus exclusively on small residential projects. Engie acquired its B2B operations for an undisclosed amount. Effy chose to reinvest everything in product development and growth. In addition to organic traffic, the company spent some money on brand awareness advertising (like TV ads), as well as ads on Google and social networks.
And it paid off when Effy attracted 18 million visitors to its site by 2022. Some people just wanted to use Effy’s tools to see how much money they could save with projects. energy innovation project. Others go a step further and submit requests for some construction work.
Effy then contacts those leads to understand their needs. To give you an idea of the scale of Effy, last year the company ended up contacting 500,000 individuals and completing 100,000 energy innovation projects. Effy processed 800 million euros of transactions on its platform.
Own the relationship
Effy can still improve its service in many ways. In particular, its market remains primarily a lead generation product for energy innovation contractors. When potential clients want to continue with their home projects, they are connected with independent contractors.
These contractors provide quotes, which means it creates some difficulty for the end customer. They have to compare quotes between multiple bidders and choose one.
Of course, Effy spends a lot of time managing his markets. There are currently 3,800 contractors working with Effy. The company has collected 16,000 reviews and the average rating is 4.8 stars.
Likewise, Effy can handle the paperwork to get grants for energy innovation work. The company cuts this administrative process and charges contractors a small nominal fee for new leads.
Effy now wants to move to a first-party marketplace model. Customers interact directly with Effy and negotiate quotes with Effy. “In the past, we had almost 100% of our business third-party — it makes up 90% of our business today,” says Utzmann.
It opens up a number of new possibilities on the product front. First, there’s a lot of optimization possibilities when it comes to quote generation, material sourcing, and everything that isn’t construction work. This way, contractors can accept more work as Effy handles the rest.
Second, Effy can start offering some financing options with partners. For small amounts, Effy can use ‘buy now, pay later’ products. For larger amounts, Effy has an internal team that can negotiate lines of credit with Sofinco and Cetelem.
Sure, energy innovation projects can be expensive. But customers often have to pay smaller bills once these projects are completed. Effy can even look at the impact on your bill thanks to a smart meter.
“Let’s say you pay €2,000 per year and you will pay €1,000 per year starting tomorrow. You can spend €800 to return your investment. In the end, you’ll save less because you have to give some things back, but your home is also worth more,” says Utzmann.
Beyond this product roadmap, Effy’s business is likely to grow rapidly thanks to favorable market conditions. The Ukraine incident has had a significant impact on energy bills.
At the same time, the European Union wants to fund projects that have a positive impact on climate change. Residential buildings indirectly generate a lot of carbon emissions because it takes a lot of energy to heat and cool them. Many EU countries are implementing generous subsidies to promote energy innovation projects.
Finally, Effy is currently only available in France. The company may expand to other European countries in the future, starting with Germany and Spain.