Why we invested in aedifion

Why we invested in aedifion, an innovative platform to transform the built environment’s energy usage

When it comes to the climate crisis, one of the worst offenders is the built environment. It generates around 40% of annual global CO2 emissions - from construction and building infrastructure materials (embodied carbon), as well as the energy required to heat, light and power homes, offices and other public buildings. As we know from investing in SunRoof, just heating and powering buildings contributed 17.5% of all global CO2 emissions in 2016.

There are major environmental gains to be made from decarbonising buildings, particularly upgrading existing building tech to make them more energy efficient. If we are to hit the climate goals set in the Paris Agreement, we need to reduce 50% of total building emissions by 2030 at a minimum. This is impossible without addressing the emissions of existing buildings. Tackling this challenge led us to aedifion - a Cologne-based PropTech that monitors, manages and reduces energy usage for commercial buildings.

Reducing operational carbon from existing buildings

The real estate industry is currently undergoing one of its most significant transformations in years. A combination of environmental and regulatory factors, as well as the growing economic costs of heating and energy, are driving asset managers to rethink how they run their buildings and what can be done to reduce the environmental impact.

Utilizing energy management systems (BEMS) to upgrade existing building tech can make them run more efficiently, yet it can be difficult to know how and where to start. Should you install heat pumps? What about retrofitting insulation in key areas? Finding and understanding those individual energy issues within your building and how to rectify them can be difficult, particularly across estates with thousands of thousands of square meters.  

Not only do these ‘passive’ changes make a difference: the real value lies in ‘active’ technology solutions. Digital tools to automatically adjust heating, lighting, and other systems using real-time data analysis enable efficiency and reduce the carbon footprint. According to the World Economic Forum, the investment in active digital solutions can be recouped in less than a year, compared to more than 15 years for passive changes. For businesses looking to make changes to run a more efficient and environmentally-friendly building or estate, aedifion is the answer - providing a return on investment within just a few months.

aedifion mission: We want to make buildings part of the energy system of the future. Thanks to digitization and artificial intelligence, buildings can become part of the energy transition - as virtual power plants that are part of smart networks to finally make building stock more sustainable.

aedifion was spun out of the leading building technology research institute at RWTH Aachen University in 2017. The cloud platform uses AI to control heating systems in a predictive manner to reduce costs of energy and carbon consumption across the commercial property sector. Its IP assets are built upon 25 years of research, culminating in best-in-class software that is easy to implement and scale to drive value.

Commercial property owners and administrators can utilize aedifion’s platform which also integrates external data to provide real-time overviews of gas and electricity consumption across their estates. With aedifion’s platform they can not only monitor usage - but can also identify overspend and where efficiency gains can be made. Its AI can manage and control energy output, taking into account weather factors (changeability, seasonality, localized forecasting) as well as the thermal capacities of a building. It benchmarks and cross-compares with other buildings of the same size and usage to determine appropriate energy usage levels.

For instance, the platform can identify when empty rooms are being heated or lights are left on and even if areas require increased insulation. It can also adjust energy purchasing across a built environment so that energy is purchased at low price-point periods (such as preheating at 4am rather than 8am), which also reduces the carbon intensity. By bundling up energy purchasing across the platform, aedifion can maximize price and carbon efficiency for all users.  

Through its sensitive monitoring of building parameters, the platform further can be used for predictive maintenance of building equipment.  Costly damages can be prevented and manual inspections reduced.

The impact of aedifion’s tech

aedifion’s platform is the most impactful and scalable solution we’ve come across that is driving carbon dioxide emission (CO2e) savings by helping companies to reduce energy consumption, by up to 40%. In Germany, there are 2.7 million commercial buildings with around 1.35 billion square meters of net floor space. Based on efficiency savings seen across its current customer base, aedifion predicts that it could save more than 10 million tons of CO2e each year through its cloud platform in Germany alone. This impact could be immense and this is only in one country.

Our calculations confirm this and show: aedifion can save more than 100 megatonnes of CO2 emissions by 2040 - what we term Climate Performance Potential (CPP). In fact, our analysis predicts the company should smash through this target.

Building virtual power plants of the future

With asset owners under pressure to reduce energy to save costs as well as meet European building regulations, aedifion is emerging as a clear winner in BEMS. We co-led aedifion’s $12M Series A round with Beyond Build, which will finance the further development of the platform and drive its expansion. With their platform, buildings cannot only reduce carbon emissions, but also become one of our largest energy storage. Buildings could serve as virtual power plants in neighbourhoods, helping to balance grid loads from fluctuating renewables and increase grid capacity.

World Fund Investment Manager Mark Windeknecht will join aedifion’s advisory board. We agree with him when he says: "Office buildings are responsible for 6.6% of global CO2 emissions - an astounding figure. If you can solve energy inefficiencies for commercial buildings, then there is huge potential to reduce the climate impact of this sector at the same time. aedifion is an excellent deep-tech example of how climate mitigation and cost savings can be scaled via software, in a way that suits customers and the planet."

We’re excited to be working closely with aedifion as they further develop the platform and expand beyond their local market of Germany to enable more cost savings for customers as well as combat the climate impact of commercial buildings.