From Install to Impact

In truth, the market is significantly fragmented and ripe with growth opportunities. Over 97% of the German market consists of local companies that operate on a small scale with limited expertise in heat pumps and their optimisation potential. This is why the timing for specialised players such as Vamo to enter and consolidate this market — is now.

The Problem: Roughly half of residential heat pumps are not properly installed and more than 90% are not running efficiently

Buildings account for almost 40% of Europe’s energy consumption and over a third of its greenhouse gas emissions, largely due to residential heating. While heat pumps promise a greener solution, they’re not yet living up to their potential.

The problem is twofold. First, proper installation remains a significant challenge. In Germany, roughly half are poorly installed, which can drastically reduce their efficiency and performance. Issues like incorrect sizing, faulty ductwork, or inadequate insulation lead to higher energy bills, system failures, and reduced lifespans. Even though heat pumps are designed for efficiency, a poorly installed unit struggles to maintain temperatures and wears out faster. Over 90% of the installed heat pumps are not running at their efficient optimum in Germany. To fully realise the energy savings and environmental benefits, ensuring professional, high-quality installation is essential.

The industry’s second major challenge is the critical shortage of skilled installers or rather the existing installer’s occupancy rate with burdensome non-installation tasks. In Germany alone, an estimated 60,000 additional professionals are required to meet the ambitious targets for heat pump installations set by regulators. At Extantia, we believe the key to winning in this market lies in offering the most compelling value proposition to skilled installers. Whichever player succeeds in making the most attractive offering to the qualified labour force will gain a critical edge.

The Solution: High-quality installations and an attractive value proposition to the skilled labour force

That’s where Vamo comes in. Founded in 2023, Vamo addresses poorly installed heat pumps and the tight labour market with a high-quality “green heating swap,” enabling customers to transition from oil and gas heating to heat pumps within 30 days. How do they do that? First, Vamo has built a trusted network of highly skilled installers. Secondly, Vamo uses remote monitoring technology, which ensures smooth operation and gathers currently untapped data for system optimisation leading to cost savings.

Collaborating with Vamo offers substantial benefits for heat pump installers by removing burdensome tasks not directly related to installations. Vamo has developed a unique software solution called HeatOS™, which streamlines the customer journey from “lead to heat” and efficiently manages the intricate supply chain, thus reducing time spent on “non-installation tasks” for installers and freeing up valuable resources. While Vamo has started with 100% in-house installations in the first six months, they have now built up a Germany-wide partner network, which currently covers roughly 50% of Vamo’s installations and enables the company to execute an asset-light business. We believe that Vamo’s approach to growth through a partner network of small, local installation companies is ideal, as it enables them to scale more quickly. Think of it like a fast-food restaurant chain: They build their operational knowledge by running their restaurants — but the real scale comes from their franchise-like model.

Vamo’s vision goes beyond just fast installations and high-quality maintenance, it also focuses on cutting-edge technological innovation. Vamo is rapidly expanding its network of interconnected heat pumps, known as the Heat Fleet™. This network lays the groundwork for a decentralised energy system that adapts to fluctuating energy demands and optimises consumption. By facilitating intelligent energy dispatching, the Heat Fleet™ has the potential to save billions of euros by diminishing the need for costly grid expansions and infrastructure investments.

Vamo is EPIC: How the Carbon Math adds up

The political context of this investment is also worth mentioning. Germany’s heat pump installations currently lag behind the ambitious targets set by Minister Robert Habeck. However, the long-term potential of this market is undeniable. As Germany accelerates its efforts to decarbonise residential heating, heat pumps will continue to be a cornerstone technology — one with no viable alternatives for achieving our climate goals. Assuming that heat pumps will gradually replace natural gas use for heating, we calculated Vamo’s potential to cut emissions by 169.6 Mt CO2e annually by 2050. Globally, heat pumps could save between 0.9 to 4.8 Gt CO2e per year by 2050 based on McKinsey’s Global Energy Perspective scenarios, which highlights the immense impact of this market.

Driven by Vamo’s exceptional product-market fit and its promising impact on carbon reduction, we are excited to announce our lead role in a €7M oversubscribed seed extension round alongside the Munich-based GET Fund. This round also welcomed participation from previous pre-seed investors, including Caesar VC, Realyze Ventures, and Neosfer. The capital raised will fuel the expansion of Vamo’s partner network and accelerate the development of their Heat Fleet™. Vamo is not just installing heat pumps — they’re pioneering the future of sustainable heating. We’re proud to partner with them as they lead the way in reducing emissions and reshaping the industry!