citybiz+ Cleantech Startup Sealed Announces $30M Funding and Pivot to B2B

New York-based Sealed, a cleantech startup helping homes to become more energy-efficient, has raised $30 million from investors and announced a new program that ropes in contractors to accelerate retrofitting of homes.

The funding round was led by Keyframe Capital and Cyrus Capital, while CityRock, Los Angeles-based Fifth Wall, and others participated. Since 2013, Sealed has raised $113.5 million, according to Crunchbase.

Aiming for Impact

“We have some big news! Today we’re announcing our new direction: Sealed Pro is a software platform empowering contractors to sell more energy-saving projects, allowing us to have a bigger impact on decarbonizing homes,” said Sealed co-founder and CEO Lauren Salz, a Forbes 30 under 30 honoree in 2018.

Salz joined with Andy Frank and Paul Gilkerson to co-found Sealed with the goal of making homes more energy efficient. Its business model involved bearing the costs upfront, and allowing customers to pay back out of their energy savings. In this line of business, Sealed was backed by insurance giant Munich Re, and held partnerships with major utilities such as National Grid, ConEdison and Central Hudson Utility.

The new Sealed Pro model, seen as a pivot to a B2B business model, started rolling out in California last year. It empowers contractors to sell more energy-saving projects, in a bid to solve the “slow and painful processes of securing rebates for home energy contractors installing weatherization and electrification projects.”

The program expects to benefit from Inflation Reduction Act rebates totaling over $8 billion for home energy, and other regional programs that together offer up to $2.5 billion. After a launch in California, Sealed Pro is expected to be rolled out in several other states.

Contractors as Evangelists

“Reorienting our business model around Sealed Pro and supporting contractors is a major shift for Sealed that is a perfect fit for today’s market,” said Salz, a former McKinsey analyst. “Sealed Pro takes advantage of a historic market opportunity while also enhancing our contributions to home energy efficiency and electrification in an efficient, scalable way.”

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Before the IRA passed, Sealed didn’t expect to pivot towards building a solution for contractors, but after five months of being exclusively focused on Sealed Pro, “it is clear that this was the right decision to make,” said Salz.

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“We have an opportunity to help contractors retrofit hundreds of thousands of homes in the next few years by making energy efficient projects more affordable for homeowners, more profitable for contractors and more accountable for governments and utilities,” she added.

While most of Sealed’s growth since its founding in 2013 has been organic, last year it made its first acquisition in InfiSense, a developer of wireless sensing and software solutions to collect real-time efficiency performance data.