Clean energy tech startup Aira announced today that it has raised €145 million (USD$158 million) in its Series B financing round, aimed at accelerating electrification and reducing the use of gas in residential heating in Europe.

According to Aira, the financing round was significantly oversubscribed, and was upsized from an initially targeted €85 million.

Founded in 2022 by impact company builder Vargas, Stockholm, Sweden-based Aira provides clean energy-tech solutions aimed at accelerating the electrification of residential heating, including a high-efficiency heat pump.

Heat pumps are rapidly emerging as a key energy efficient and climate-friendly alternative to furnaces and air conditioners, producing fewer greenhouse gas emissions and reducing reliance on fossil fuels. According to the European Commission Joint Research Center, there are nearly 90 million residential fossil fuel-based boilers in use. Aira said that switching from a gas boiler to an air source heat pump with its clean energy solution can reduce household heating costs by up to 40% and CO2 emissions by 75%, rising to 100% if fossil-free energy is used as the source of power for the heat pump.

The company said that the new funding will be used for market expansion across Italy, Germany, and the UK, the introduction of an affordable monthly payment model for European homeowners, the expansion of the company’s portfolio with products and services including intelligent heat pumps, solar panels, battery storage and electricity tariffs, as well as for R&D aimed at providing simple to use and customer-centric clean energy-tech solutions. 

The company also announced a €15 million grant from the Polish government for the establishment of a state-of-the-art manufacturing site in Poland to produce heat pumps.

The Series B round was led by Altor, Kinnevik and Temasek and also includes the Burda family, Collaborative Fund, Creades, Lingotto, Nesta Impact Investments and Statkraft Ventures.

Martin Lewerth, Aira Group CEO, said:

“We are thrilled to welcome our new shareholders. Above and beyond the funding, they bring invaluable strategic insights, networks, and expertise. Together, we are committed to spearheading the much-needed green revolution in residential heating. The completion of our Series B funding makes us well capitalised and ready to accelerate our pan-European platform expansion, significantly reducing both heating bills for households and carbon emissions across Europe.”