Aira, which provides clean energy-based heating solutions for European homes, announced that it has raised an additional €63 million (USD$69 million) aimed at expanding the deployment of its heat pumps in more locations. The investment – from existing investors including Temasek, Statkraft Ventures, Kinnevik and Altor – comes in addition to a $158 million (€145 million) Series B round co-led by Temasek, Kinnevik and Altor, which closed in January 2024.

The new investment will enable Aira, founded in 2022 by impact company builder Vargas, to expand further across Germany, Italy and the UK, gaining a wider geographical footprint in all three markets, the company said, adding that it would use some of the funding to develop its clean energy-tech portfolio with additional products and services.

Martin Lewerth, CEO of Aira Group, said:

“With this extended funding, we are capitalizing on our commercial momentum and accelerating the decarbonization of residential heating. This investment allows us to ramp-up our fully vertically integrated platform and expand our footprint across markets.”

Heat pumps are rapidly emerging as an energy efficient and climate-friendly alternative to furnaces and air conditioners, producing fewer greenhouse gas emissions and reducing reliance on fossil fuels. According to Aira, 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. There are still 130 million fossil fuel-based boilers in use throughout Europe, making residential heating the third-largest source of CO₂ emissions, representing 10% of the continent’s total CO₂ emissions.

Earlier this year, Aira announced the inauguration of its first heat pump production site in Wroclaw, Poland, with the company planning to invest $320 million (€300 million) in the manufacturing plant, to produce up to 500,000 heat pumps per year. In addition, it has established an R&D center for product development in Sweden, and initiated a consumer financing program.

Aira has so far secured €243 million in equity funding since its establishment. The company currently employs 1,200 people and has an annual revenue run rate of €100 million. This year Aira has opened 11 regional sales and installation hubs and its representatives are visiting thousands of homes each month. Additionally, Aira has established academies across its markets to upskill and train the next generation of clean energy experts and installers.

“Switching people to cleaner and more affordable heating solutions is critical amidst the cost-of-living crisis,” said Lewerth, adding that “together with Temasek, Statkraft Ventures, Kinnevik and Altor, we are demonstrating our commitment to taking Europe off gas.”