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AC disruptor secures further funding

US air conditioning company Gradient has secured US$18 million (AU$26 million) funding to advance its innovative heat pump solutions. The Series A funding is co-led by Sustainable Future Ventures and Ajax Strategies, with participation by Safar Partners, Climate Tech Circle, Shared Future Fund, At One, Impact Science, and others.

Gradient CEO Vince Romanin says the funding will allow the firm to grow the business and make material progress on its goals.

“In addition to adding headcount in key roles,” says Romanin, “we will be leveraging the funding to focus on the design and development of our second product: window heat pump units that decarbonise heating for cold climates.”

Gradient’s eponymous first product, detailed on the company website, is designed to provide a more sustainable and design-oriented alternative to the traditional window air conditioner widely used in the US. Although it comprises an indoor and outdoor section, like a split system, these are combined in a single unit that can be installed by the end-user, without the assistance of a technician.

Since the company first broke into the news in 2021, it has managed to generate mainstream attention. Last year it won US$24 million (AU$34.5 million) in the New York City Housing Authority’s Clean Heat For All Challenge, as part of a seven-year contract that will see it develop and deliver 10,000 cold climate packaged window heat pump units for use in New York City public housing facilities.

More recently, Gradient was named one of TIME’s Best Inventions of 2022 and a Fast Company World Changing Idea.

“The announcement of the New York City Housing Authority (NYCHA) challenge was huge,” says Romanin, “because it was a giant signal that this is what the market wanted and needed. NYCHA is really accelerating market development of these new products.”

Although the company recognises the inertia in the HVAC&R industry, Romanin says the best way to break through is with successful innovation.

“We’re less focused on what the incumbents are doing and more focused on what our customers need,” he says. “We know that the world needs to shift to better refrigerants, smart monitoring and control, and electric heat pump heating. We also know that customers don’t pay for these things, and don’t pay for reducing emissions. They just pay for better products.

“With that in mind, we started by learning exactly what consumers hated about their current window units and built a product they want, while creating what the world needs. We are building heating and cooling products that are beautiful, effective, quiet, and easy to install and that give your view back. And it happens to be way better for the climate.”

As part of the next round of development, Gradient will be exploring monitoring, maintenance, leasing and energy management functions such as demand response. Romanin says this may mean bringing in other players.

“We are always open to working with partners in this space and we know it’s going to take collaboration for us to change this industry together,” he says. “Our system will allow installers to deploy systems much faster and at much lower cost, for example. The expansion of heat pump heating and global growth in cooling is driving massive demand in this sector and we hope to help the industry grow quickly.”

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