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Founded by Simon Phelan in 2016, Hometree will announce its biggest funding round and the purchase of a green home improvement financing platform this week, Sky News understands.
By Mark Kleinman, City editor @MarkKleinmanSky
Hometree, a residential energy services provider backed by leading City investors, is tapping an arm of the insurance giant Legal & General (L&G) for fresh funding after sealing the purchase of a green home improvement platform.
Sky News has learnt that Hometree, which was founded by Simon Phelan in 2016, will announce a $46m equity-raise on Wednesday.
The capital injection – Hometree’s largest to date – will be jointly led by L&G Capital, 2150 and Energy Impact Partners, the latter two of which are specialist energy and sustainability investors.
Hometree will announce alongside the equity-raise that it has agreed to acquire BeWarm, a green home improvement financing platform offering products such as green loans and leases.
The deal, which requires formal approval from the City watchdog, will represent a step towards Mr Phelan’s ambition of becoming the leading provider of residential energy services in the UK and elsewhere in Europe.
A source close to Hometree said it had seen more than threefold growth in its core home services business over the last 12 months.
Its latest fundraising has also been backed by existing investors including Inven Capital, the energy fund backed by Czech Utility CEZ Group, Oxford Capital and FJ Labs.
The company describes itself as one of the biggest challengers in the UK home cover market, behind British Gas and HomeServe, which was bought last year by the Canadian infrastructure investor Brookfield in a £4bn deal.
In a statement issued in response to an enquiry from Sky News, Mr Phelan said the funding round and BeWarm acquisition marked “a significant new chapter for Hometree, enabling us to deliver on our long-held vision of building the leading residential energy efficiency platform across Europe”.
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“The recent energy crisis has shown that we can’t remain reliant on foreign gas to heat and power our homes, and Hometree has a key role to play in helping homeowners transition to a more safe, stable and affordable energy system.”
Hometree’s expansion comes at a time when many governments are setting binding targets for decarbonising stocks of housing, with domestic energy sources including heat pumps and green batteries becoming increasingly popular because of their cost.
The company has until now operated solely in the home emergency insurance market, but has now diversified into three divisions focused on home, energy and financial services.
Hometree had previously raised more than £25m from investors, managing to weather the pandemic’s impact during a period when many start-ups and scale-ups have struggled to raise capital.
“The company is supporting the full lifecycle of sustainable homeownership, helping homeowners to install, manage and finance renewable energy solutions and enabling them to run their homes in a carbon neutral way,” said one investor.
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