Toronto-based cleantech startup Parity has secured $26.1 million CAD ($19 million USD) in Series B financing to scale the adoption of its software solution aimed at reducing greenhouse gas emissions in urban buildings.
The round was led by Montréal-based climate impact fund Idealist Capital, which recently received a $50-million injection from the federal government’s Canada Growth Fund. This round brings Parity’s total funding to date to over $34 million CAD.
“No building will be net zero without a comprehensive system in place to stop excess energy waste.”
Pierre Larochelle, Idealist Capital
Parity was founded in 2016 by Brian Macleod, who now works as Parity’s director of data innovation, and CEO Brad Pilgrim. The startup claims it uses artificial intelligence (AI) to monitor and limit energy waste by remotely operating existing heating, ventilation, and cooling systems (HVAC) in real-time. Pilgrim has previously likened the software to a “smart thermostat” for an entire HVAC system.
The platform uses machine learning for features such as predictive weather control, which allows buildings to better control the heat in a building using weather forecasts.
The startup’s goal is to not only reduce the carbon footprint of urban buildings, but also autonomously optimize the system controls, relieving building managers of the daily burden of managing HVAC performance. At the time of its $5-million fundraise in 2019, Parity claimed its software could save buildings 25 to 35 percent on heating and cooling bills.
Nearly 40 percent of carbon emissions are generated from the real estate sector alone, with Parity claiming that half of those emissions stem from inefficient HVAC systems. In a statement on the recent fundraise, the startup said multifamily buildings are especially guilty, wasting on average nearly a third of the energy they use.
Parity is betting that as energy grids move towards decarbonization, buildings will have a strong incentive to develop more dynamic control over their electricity consumption. In the statement, Pilgrim said that environmental regulations and rising bills have pushed the real estate sector to an “inflection point.”
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“Utility rates continue to rise and so do demands for buildings to interact with the grid in new and more complex ways,” Pilgrim added. “HVAC systems consume over half of the energy used in multifamily buildings, making them a necessary component to solving these issues.”
Parity has focused on the multifamily and hospitality markets, and the startup claimed to have achieved energy savings in over 65 million square feet of real estate in these sectors to date. On its website, the startup also claims it has delivered $7.5 million in energy savings to buildings, and reduced carbon emissions by 18,361 tons.
With the new funding, Parity plans to target new verticals, including senior and student housing. According to a report from The Globe and Mail, the startup’s platform is currently available in Toronto, New York, Boston, Philadelphia, and Washington. With this fresh funding, Parity plans to roll out its service to new US states, including California, Florida, Colorado, and Illinois.
Some of these new markets are implementing their own climate regulations, which could provide opportunities for companies like Parity. California, for example, recently signed new regulations into law that require large companies to report their total greenhouse gas emissions and the impacts of climate change on their financial performance.
“No building will be net zero without a comprehensive system in place to stop excess energy waste,” Pierre Larochelle, co-managing partner at Idealist Capital, said in a statement. “Idealist Capital is excited to partner with an innovative company pushing an outcome-based approach to sustainability.”
UPDATE (06/11/2024): A previous version of this story incorrectly stated that Idealist was joining returning investors.
Feature image courtesy Parity.
