14th April 2024

Let There Be Warmth

Let There Be Warmth

Daniel Helcl is proof that a billion-dollar startup can be launched even in one's forties, moreover in a field one has never professionally pursued. His project, which digitizes heating systems, grows fourfold every year and has only a little competition worldwide. After five years of operation, he is considering expansion into America.

When you go for an interview at a company whose core business revolves around heat pumps, it's no surprise that it feels warm inside. You silently acknowledge the demonstration of what it could be like at your own home on freezing days if you were to utilize their services.

However, soon enough, the founder himself dispels that notion when he spontaneously asks his assistants if the room might be too warm. Daniel Helcl, the founder of the Czech company Woltair, sits in the Cimrman meeting room at their headquarters in Zlicin, wearing a vivid red sweater. He may have perspired a little, but certainly not as much as in the past five years. During that time, he built a billion-dollar startup from scratch in a not-so-sexy industry—heating systems. He introduced digitization to this field and now his project finds it difficult to find competition in the world. He attracts not only prominent Czech investors but also global ones. After installing thousands of heat pumps in the Czech Republic, Poland, Germany, and Italy, he contemplates expanding to other countries, including the United States.

"This is my life project," says the forty-six-year-old entrepreneur, proving that a global success story can be achieved even after the age of forty. "I read statistics that founders between the ages of 40 and 45 are more successful. Their projects have the lowest mortality rate, probably due to their accumulated experience," says the former marketer, café owner, real estate broker, developer, and advertising agency owner. He also considers himself somewhat of a masochist, given his "hobby," which he shares with his wife and which is at the beginning of this incredible startup story. Despite all he has accomplished, the story is just beginning.

There was nothing in Daniel Helcl's life that hinted he would one day make a breakthrough in the heating industry. Over two meters tall, with a firm handshake, the entrepreneur entered the sales and subsequently the marketing department of Eurotel (now O2) in the 1990s. In the early 2000s, he imported electronics from China, renovated properties for profitable sales, operated a café, and even founded an advertising agency specializing in promotional items. However, none of these ventures had the potential to grow into a big business. As it often happens, Daniel found his calling through a completely different door—due to his desire to make his life easier or, more accurately, to reduce his suffering. Moreover, as an entrepreneur, he quickly realized that billions could be made in the heating business. "If Woltair had come about 10 to 15 years earlier, it might not have turned out so well because I wouldn't have had 18 years of entrepreneurial experience behind me."

If you have lived in the same house for decades, you probably won't understand. "My wife and I have this masochistic hobby where we consider our family home worn out after about six years, so we sell it at a profit and buy or build a new house. Sometimes we start from scratch, other times we only renovate the interiors," Daniel begins to describe how he first encountered heating, which he considers the royal craft and technical heart of family homes.

At that time, he was just a customer who hired various craftsmen himself. Anyone who has had recent experiences with craftsmen knows that one such experience is more than enough.

For many customers, the reasons behind their dissatisfaction stem from hidden factors such as poor communication, complicated appointment scheduling, long waiting times, the risk of shoddy workmanship, and, not least, cost. On the other hand, Daniel saw significant potential for improvement through digitization. He witnessed individual orders worth hundreds of thousands and also recognized the subsidies flowing to households as part of the transition to green and energy-efficient solutions. Little did he know that an energy crisis would soon emerge, further increasing the demand for heat pumps. "I saw that these were orders in the range of hundreds of thousands and that heating systems and heat pumps could be economically viable," he reflects on the time six years ago.

However, since Daniel had only basic technical experience in the field and saw his contribution primarily in digitization, he began searching for craftsmen who could help him with his new company. Choosing a business partner from among craftsmen, however, proved to be an almost superhuman task. It felt like a déjà vu. "It always turned out disastrously. I contacted dozens of them; they couldn't introduce themselves properly on the phone, arrived late for meetings, and were even dirty. I told myself that I couldn't start a company with such material," he laughs when recalling his beginnings. That's why the duo of Karel Náprstek and Jiří Švéda was like a balm for his soul. As two university graduates with ten years of field experience, they appeared on the market as a revelation in the most positive sense of the word. The trio immediately clicked and, from today's perspective, made the best possible decision.

"They didn't hesitate or take a day to think. They had been thinking about something similar themselves, to make the entire industry work better for both customers and heating engineers."

The idea behind Woltair is fundamentally simple and revolves around digitization. Its brainchild is the Superfix application, where customers on one side and Woltair's business partners and contracted craftsmen on the other side sign in. The application provides a clear overview of everything related to each individual order, including its various stages—from the initial order to the arrival of the coordinator, who inspects the site in advance and identifies the suitable location for the heat pump, complete with proper photographic documentation, as well as the delivery of necessary materials and the subsequent arrival of craftsmen who install and connect everything and then document it with photos. The customer knows exactly what to expect, when, and what the final outcome will be, and the employees of Woltair across various departments, which are integral parts of the entire process, have access to the same information. Moreover, the application serves as a dataset detailing how the specific installation was connected and distributed throughout the house, which provides valuable data for potential future repairs or system replacement. "Starting this summer, customers will be able to remotely control and monitor their energy consumption and subsequently optimize the heating in their homes through the application, and we are planning additional features," Daniel Helcl announces, emphasizing his intention to open up the application to all people, not just his clients.

Superfix is also the reason why craftsmen are willing to forgo margins from the sale of heat pumps and related goods. They can earn more through their work alone. Woltair handles all the materials and heat pumps itself, with warehouses covering thousands of square meters in the Zličín industrial zone. Therefore, the craftsmen are solely responsible for the actual work, which they can dedicate more time to with Woltair. "We save them up to fifty percent of their time by taking on tasks they dislike and are not paid for. These tasks include administrative work, marketing, invoicing, preparing price quotes, purchasing materials, and so on. We hand them the customer on a silver platter, providing them with all the information they need about what they have to do, where, and for how much. Additionally, we can pay them immediately after completing the order," explains Helcl from the adjacent Woltair Academy. The academy serves as a regular training facility for technicians and also functions as a showroom, as it displays almost all types of heat pumps from twenty brands worldwide, all of which the company has in stock. Today, one of the co-founders, Jiří Švéda, helps develop the Woltair Academy, while the other co-founder, Karel Náprstek, with his technical expertise in heating, serves as the product manager. Over time, the company has expanded beyond heat pumps and entered the segment of popular photovoltaic power plant installations, which the Czechs have embraced due to both their enthusiasm and the energy crisis. From a five-person project in its first year, the company now has 250 employees, including 40 in Poland. Last year, Daniel Helcl handed over its management to a professional team, with the former Mall Group director, Jan Hanuš, assuming the position of CEO since autumn. Daniel has taken on the role of Head of Procurement and is involved in making strategic decisions as part of the board.

Together, the trio of co-founders currently holds roughly a one-fifth stake in Woltair, with Karel and Jiří holding approximately five percent each, while Daniel holds ten percent.

The remaining shares are divided among investors, including funds such as Kaya (formerly Enern), Presto Ventures, Inven Capital, Movens Capital, the Canadian Westly, and the sustainable development support fund ArcTern Ventures. All of them have invested half a billion Czech korunas into the thriving Woltair. "I don't cling to a specific number. Whether we have a sixty or forty percent stake doesn't matter to me. If things continue this way, that number will decrease to single digits. But for me, it has always been about the rapid growth of the company and its value," explains Daniel. And the company's performance, along with its value, is indeed expanding rapidly. Since its inception in 2018, Woltair has been experiencing significant year-on-year growth in reserved orders and actual revenues, which materialize with a delay of a few months until the final installation of the equipment. Last year, orders closed just below one billion korunas, but this year they are expected to significantly surpass that mark, pushing revenues beyond one billion korunas for the first time. It is worth mentioning that half of the mentioned performance is now attributed to photovoltaics. However, Daniel Helcl still considers Woltair primarily as a heating company. "We want to achieve four times the growth of the previous two years. We are equipped for it—our technicians are ready, and we have the necessary materials," Helcl touches on last year's sore point regarding the shortage of components related to supply chain issues. At that time, Woltair's customers, like its competitors, had to wait for installation for six months. Today, the Czech startup is so well-established that it offers a 30-day installation guarantee, with customers receiving a 50% discount if it is not met. "I negotiated direct supplies with manufacturers of individual heat pump brands. It helps us even when entering foreign markets because we are already known there, and they can provide us with the necessary quantity," praises Helcl, referring to the newly established connections that allow the company to further scale. "We are scaling up," I repeatedly hear this phrase in its past, present, and future forms during our conversation.

The rocketing growth of Woltair, symbolized by the letter G (or perhaps it should be expressed with the letter W, which Daniel has embroidered on his red sweater), shows no signs of slowing down. And there is no sign of deceleration even in the longer-term horizon. "It quickly became clear that this was a global project. Today, the biggest global investors are interested in us, and everyone, including funds from the USA, reinforces the fact that there is no one like Woltair in the world. There are companies that digitize individual aspects but do not address the long-standing pains of the industry. We are fixing the entire sector," highlights the competitive advantage. After entering foreign markets such as Poland, Italy, and Germany, the company discovered that the situation with craftsmen is equally challenging everywhere. This year, the company will expand into additional European markets. Given that it already has American investors and the heating industry situation there is not ideal either, Woltair is considering crossing the Atlantic, where Daniel frequently flies to visit his daughter, who is studying at a university in Florida. "It definitely interests us, and we are discussing it with investors in some way," confirms the global intentions. However, all of this requires funds, so Woltair is already preparing for another round of investment, which should follow the autumn round when they raised nearly 400 million korunas. The deal should be signed during the spring months. However, Daniel Helcl's thoughts are already focused on the following year when Woltair will enter the next phase. "In that year, we should have a more substantial Series B investment, which will primarily go towards international expansion and marketing," he predicts. As a prominent entrepreneur, he has figuratively raised his third child. And precisely because he founded his startup at the age of 42, he has more room to drive its steep trajectory to a successful conclusion and does not have to deal with the typical career dilemma of choosing between a startup and family. "My daughter is an adult, and my son is approaching adulthood. I have never felt that I neglect my family. That's the advantage of older founders," he smiles just before our farewell.


Translated from the Czech original publish on 27/2/2023 in Forbes