Weatherization coupled with electrification is one of the best mechanisms for reducing a home’s carbon footprint, decreasing cost of ownership, and lowering total energy demand on the grid. The Inflation Reduction Act significantly incentivizes households to improve their energy efficiency. Sealed is an energy efficiency startup that works directly with contractors to provide them with the data, planning, and financing capabilities to optimize their operations in supporting this transition to a carbon-less future. While the Inflation Reduction Act provides billions in incentives, navigating the complexities of the rebate process is a challenge and presents risk, dissuading participation. The company has recently launched Sealed Pro which streamlines the process of applying for all eligible and applicable rebate opportunities. Sealed also provides an upfront incentive to contractors before the receipt of rebate proceeds, freeing up cash flow and resources for contractors, allowing them to take on more projects. The decision to launch Sealed Pro marks a pivot for the company, going from a B2C marketplace for homeowners to work with vetted contractors to a B2B solution for contractors. With an expected boon in demand, as the Inflation Reduction Act begins to roll out, the company expects to be able to work with contractors nationwide by the end of the year; Sealed is currently operational in the New York metro area and California.
AlleyWatch caught up with Sealed CEO and Cofounder Lauren Salz to learn more about the business, the company’s strategic plans, latest round of funding, and much, much more…
Who were your investors and how much did you raise?
Sealed raised $30M in funding, led by Keyframe Capital and joined by Cyrus Capital, CityRock, Fifth Wall, and others.
This is a Series B extension with all existing investors participating.
Tell us about the product or service that Sealed offers.
Our new offering for contractors is Sealed Pro. It’s an easy-to-use platform that massively reduces the administrative and financial burden of applying for and receiving incentives from government energy efficiency and electrification programs at the federal, state, and utility levels. We use a simple interface that allows contractors to get a rebate estimate in less than 3 minutes and we front the incentive so contractors don’t have to wait for up to a year to collect it.
What inspired the start of Sealed?
Sealed remains committed to our mission of stopping home energy waste and electrifying all homes, the founding philosophy of our business. With this pivot, we can impact more homes faster and at a greater scale than our old model of working directly with homeowners.
How is Sealed different?
Sealed is the only one in the residential energy efficiency space that combines the three things needed to succeed:
- Deep experience in residential energy efficiency – After ten years, we know what it takes to do this work and understand our customers.
- Bringing software to the problem—Many rebate programs require applicants to perform burdensome manual data entry and other tasks; we’re hard at automating the steps that software can tackle to streamline and simplify the process.
- We take on the risk for contractors and homeowners by predicting energy savings. We aren’t afraid to put our money where our mouth is. With measured programs, we pay contractors upfront and get paid back by the program – ultimately helping things move along and getting energy-efficient projects up and running faster.
By combining our experience, software, attractive financing, and ability to predict energy savings, we can offer a pretty interesting product to our customers.
What market does Sealed target and how big is it?
We currently reach – 4.5 million single family homes and are prepared to scale quickly as HOMES and IRA begin to roll out.
Starting with New York and expanding across counties in California, we expect to make Sealed Pro available across a handful of states in Q3 of 2024, leading to a national rollout by the end of 2024.
What’s your business model?
Sealed makes money when projects get done and energy is saved.
- Sealed makes up-front payments to contractors, allowing them to lock in revenue and profitability from their projects with zero risk. Contractors usually receive payments within two weeks of submitting their work to Sealed.
- Sealed funds are then paid back over time by the program.
Contractors today incur tremendous costs for participating in rebate programs, both hard (administrative, cash flow variability, etc.) and soft (wasted time, etc.). Due to these costs, many contractors do not participate in rebate programs and are hesitant to take on the associated risk. Sealed Pro enables these contractors to participate in these programs and offer more efficient options to their customers.
Contractors today incur tremendous costs for participating in rebate programs, both hard (administrative, cash flow variability, etc.) and soft (wasted time, etc.). Due to these costs, many contractors do not participate in rebate programs and are hesitant to take on the associated risk. Sealed Pro enables these contractors to participate in these programs and offer more efficient options to their customers.
What was the funding process like?
With the ongoing economic downturn and recent confidence losses brought on by the SVB collapse in 2023, this funding round was more difficult than most.
Sealed was fortunate to have key existing investors who believe in our mission and support our decision to pivot to an entirely new business model.
What are the biggest challenges that you faced while raising capital?
I gave birth to twins in the middle of raising, so it was hard to juggle my personal life with the dedication and effort I always desire to give to Sealed.
Other challenges include the uncertainty associated with the IRA and the HOMES program rollout. We were well-positioned to take advantage of the programs when they went live but some investors were nervous to take on policy timeline risk. That’s why the success of our program for 3C-REN in California was so important.
What factors about your business led your investors to write the check?
The success of our program in California has validated the work we are doing and the shift we took on. In just a few months, we’ve submitted $1M in rebates for our contractors as part of 3C-REN, and if HOMES programs launch this year, we will transform more homes in 2024 than we did in the first ten years of our business.
80% of the contractors we are working with weren’t working in the program previously, and we had overwhelmingly positive feedback from all the participants.
Our ability to scale quickly. We have ten years of experience in the space, are well-connected across the country in many states, and can easily implement the current model wherever we see an opportunity.
Our ability to scale quickly. We have ten years of experience in the space, are well-connected across the country in many states, and can easily implement the current model wherever we see an opportunity.
What are the milestones you plan to achieve in the next six months?
We plan to expand into several more states in the next six months.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
I have two pieces of advice, keep pushing and take the chance to ask yourself hard questions. By the way, these aren’t easy things to do at the same time! Fundraising is longer and harder than it has been in years but it can be done, expect a lot of no’s before you get to that yes. At the same time, hard moments can force hard decisions. We built a successful D2C business and then shut it down to focus the entire company on Sealed Pro. It wasn’t an easy decision, but our business is in a much stronger place because of it.
Where do you see the company going now over the near term?
For now, Sealed is excited to work with contractors, energy utilities, and policymakers nationwide to get more money into the hands of people electrifying their homes.
What’s your favorite restaurant in the city?
Whole Foods.
