Heat Pump Startup Aira Raises $174 Million to Scale Residential Clean Heating

Stockholm-based heat pump company Aira has raised €150 million ($174 million) in equity financing to expand its operations and product portfolio across Europe, targeting the decarbonisation of residential heating. The company says switching from a gas boiler to its air source heat pump can cut household heating costs by up to 40% and eliminate CO2 emissions if powered by renewable energy.

Founded in 2023 by impact company builder Vargas, Aira provides air source heat pumps that absorb outdoor thermal energy to heat homes and water. The company has expanded into Germany, Italy, and the UK, employs 1,200 people, operates 18 hubs and four Aira Academies training heat pump installers, and reports a revenue run-rate of €200 million. The new capital — raised from existing investors including Altor, Kinnevik, Lingotto, and Temasek — will be used to invest in its Swedish R&D centre and increase production capacity at its factory in Wroclaw, Poland.

Heat pumps are increasingly recognised as a key climate solution in the residential sector, producing significantly fewer greenhouse gas emissions than gas boilers and reducing household dependence on fossil fuels. Residential heating accounts for a substantial portion of buildings-sector emissions globally. Aira's business model targets mass-market adoption by simplifying installation and bundling clean energy products, positioning itself to benefit from European mandates phasing out fossil fuel heating systems over the coming decade.

Aira plans to launch into additional European markets over the next decade and to deepen strategic partnerships in the home and energy sectors. The Temasek participation in the financing round is notable given Temasek's active climate investment strategy in Asia, where similar residential electrification opportunities are emerging. For India, where air conditioning and heating demand is growing rapidly, the Aira model of integrated clean energy home products is a relevant case study for domestic clean energy entrepreneurs.

Key figure — €150 million ($174 million) equity financing raised