A British startup using technology to prevent tenants from living in cold, damp homes has raised new funding to expand as landlords belatedly try to tackle mould outbreaks in crumbling social housing.
Switchee has raised £5m, split equally between an existing investor, Axa IM Alts, and Octopus Ventures, part of the group that includes home gas and electricity provider Octopus Energy.
The company hopes to use the funding, which follows a £6.5m investment round led by Axa in May 2023, to help achieve a long-term goal of installing its technology in 1 million social housing properties in the UK.
Switchee’s technology, used by over 130 social housing providers, measures humidity, temperature and pressure and analyses the data with the aim of preventing mould and reducing heating bills, as well as improving communications between tenants and landlords.
The quality of social housing has been in the spotlight since the death of Awaab Ishak, a two-year-old boy who died in 2020 after being exposed to mould in the rented flat where he lived in Rochdale.
Tom Robins, chief executive of Switchee, said the boy’s death was an “absolute tragedy”. “There is a continuing trend here to set a much higher bar of expectations in housing standards, and we are seeing landlords adopting that attitude and looking at technological solutions that will enable them to offer a more efficient and effective service,” he said.
Robins said the investment represented a “really important” moment. “We see a moment in social housing in the UK moving from a reactive to a proactive model. There is clearly demand and challenges, so we wanted to make the most of it.”
The company hopes to correct an “injustice” that “people who can pay their heating bills had access to technology to reduce the cost… while people who couldn’t pay their bills didn’t have access to that technology.”
Robins said that in one of the worst situations he had seen, a Switchee device had helped identify a damp house where a single mother and her daughter were living in the lounge and kitchen because the bedroom ceiling had collapsed. “They had been evicted for complaints in the past so were scared to tell their new landlord. The property was then gutted and completely refurbished,” he said.
Technology can also help reduce the impact of home heating on the environment, and Switchee’s devices have been deployed through government-funded initiatives such as Social Housing Decarbonisation Fund.
Robins said revenue had doubled in the past three years, reaching £10m in its last financial year. “We are a profit-driven business, but we focus on scale rather than profit,” he said.
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Edward Keelan, a partner at Octopus Ventures, said he had been drawn to the company. B Corp Status and focuses on social housing and the environment. Axa is the company’s largest individual shareholder.
Switchee was founded by Adam Fudakowski and Ian Napier in 2015 and has so far connected 35,000 devices in homes. Robins said he hoped to reach the goal of reaching one million homes “in the next five to ten years.”
Robins paid tribute to Napier, who took his own life in 2019“His belief that this is about change is a very important part of the company’s DNA. We wouldn’t be here today without him,” he said.