Slower summer, but the big boys are innovating, and smaller startups are too

Smart Building Insight - Fundraising and Product Launches - July 2025 from Aamidor Consulting

Letter from the Editor

Another summertime issue, with quite a bit of news to report. We also have a few special pieces, so let’s get right to it.

A number of key items in this issue:

• The “tragedy of the commons” as a good reference for our industry (unlocked to all subscribers!)

• Product launches from OEMs: JCI, Schneider Electric, Carrier, Trane, Lynxspring, and more.

• Many early stage funding rounds, including from aedifion and WattCarbon, along with a number of innovators in Europe. Also, MaintainX raises a massive funding round. And, a $9M+ seed round for energy/utility management (which is pretty large).

• A deeper look at the “Sell the tech” firms in our capital efficiency analysis. These firms have a number of options in the market, which we unpack below.

• Update of our light commercial HVAC + controls market map, now including some of the controls innovators: Gridpoint, Entouch, Phoenix Energy Technologies, and more.

Check out our podcast! Lewis Martin and Joe Aamidor host the “Down Low with Joe”, focuses on market developments and includes interviews with RE decarb/digitization innovators. Check out our YouTube channel or Spotify.

Also, conference season is upon us, and we’ll be attending a few events in the coming months:

• Blueprint: Joe will be leading a panel - stay tuned for details. Readers of Smart Building Insight can get a discount on tickets. (Las Vegas, September 16-18)

• NexusCon: Back again this year. Joe was there for the inaugural event and we wouldn't miss it this year. We can offer $75 discount code for readers: JOENEXUS75. Everyone who uses this promo code will be put into Joe’s pod. What's a pod? Think summer camp meets sports team. We'll be a group of ~20 others and will get together at the conference. Register here. (October 6-8th in Denver)

• 3rd Annual Smart Data for Energy Summit: Joe has been invited to provide a plenary session: “Emerging Technologies and Capabilities Across the Smart Buildings Market and The Evolving Customer / Vendor Relationship”. Readers of Smart Building Insight can get a discount on tickets: 10% Discount to attend with code “JA10” - Register here. (National Harbor, Maryland October 15 – 16 2025).

Also, we are happy to announce a webinar next month, focused on smart buildings and digital twin technology, hosted by our friends at Autodesk - learn more and register here.

A housekeeping item - we are starting to book projects into the fall - please reach out if you think you will need our help. We’d be happy to talk, but please get in touch soon!

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Aamidor Consulting Client Spotlight (Podcast Spotlight)

You may have missed it, as we published right before July 4th - but Lewis and Joe recorded a new market update podcast episode, taking through a few of the key deals over the past few months. This provides a bit of color beyond our newsletter. Enjoy!

This newsletter is a market wrap up and analysis of the smart buildings industry. If the email was forwarded to you, sign up to receive it directly.

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Market Analysis:

We’re opening this post to all subscribers - enjoy!

Is our industry facing a “tragedy of the commons”? Nexus Labs, one of the key resources in the market, has 800+ vendors in its marketplace. Our capital efficiency research found that many firms are not performant and may be worth less than they have raised - but they aren’t (generally) at risk of going out of business. This promotes continued fragmentation, creating an interesting dynamic: while buyers and users would be better off with fewer, more obvious vendor options, each individual firm has no reason to shut down (or merge or sell).

Before getting into more - this is a hypothesis that is on our mind - we welcome pushback and other critical feedback!

The “tragedy of the commons” is a term that originated in the 1960s, regarding environmental quality. To share from a good overview paper:

“This theory explains individuals’ tendency to make decisions based on their personal needs, regardless of the negative impact it may have on others. In some cases, an individual’s belief that others won’t act in the best interest of the group can lead them to justify selfish behavior. Potential overuse of a common-pool resource—a hybrid between a public and private good—can also influence individuals to act with their short-term interest in mind, resulting in the use of an unsustainable product and disregard of the harm it could cause to the environment or the general public.”

Of course, our industry doesn’t have a natural environment as a shared resource, but we all have time and professional resources (budget, responsibilities, etc) that are finite resources. And are used for procurement/RFPs, events, and publications/resources (along with the other normal job functions). And, much of the vendor-facing activities are being taken up by a very fragmented vendor marketplace. On the flip side, each vendor is rightly focused on scaling its product, delivering value to end users, and providing a return to investors. New entrant vendors may also view the market as being in need of innovation and disruptors, while that may not be the root problem for the buyers (instead, fragmentation may just mean they aren’t finding what they want to buy - yet it is out there).

We think the ‘tragedy of the commons” example might be one best ways to explain the smart buildings market. Now, let’s look at how the tragedy of the commons impacts each key stakeholder groups in the market:

• OEMs: On one hand, these are traditional hardware/service business, supported by robust and well-entrenched channels, which may make it hard to scale centrally deployed software (these firms don’t always touch the end user), but at the same time, public investors see that “software is eating the world” and want more recurring revenue. It is hard to reconcile these things. And, that’s why we see 3-5 year innovation and retrenchment cycles at most of the major OEMs. And, why these firms will remain significant players in the market.

• National/integrated facility management firms: These firms have strong relationships with end building owners and operators (and unlike OEMs, touch them directly in many/all cases) but they also are not experts in building and deploying software. They are less impacted by the tragedy of the commons dynamic, and they may help consolidate by partnering with best-of-breed technology firms. But, they may struggle to form firm-wide technology strategies, as different end customers seek support for the large, fragmented array of solution vendors.

• Startups: This group is full of innovators that bring compelling technology to market, but there are hundreds of them, with point solution capabilities, and generally are very small. In general, each firm has no reason to stop building and operating, but in doing so, they make it hard for the market itself to mature and scale. (It is this stakeholder cohort in which the ‘tragedy of the commons’ seems particularly apt).

• Local integrators: These firms are typically back of mind for deployment or development of smart building solutions, but might be the MOST compelling deployment mechanism for these solutions. Startups typically don’t want to sell through them, as it is viewed as high CAC with a minimal potential LTV per account: each integrator probably just services a single metro area (or a few). But, the penetration rate and revenue potential per lead may be better here, and crucially, there may be less competition and fewer distractions from other vendors in this channel.

So, what can be done? Well, as we said, this is a hypothesis, so we welcome any feedback that might disprove what we’re sharing. But, assuming this is a good way to think about the market, more of a focus should be placed on the end owners/operators (the buyers and user of the technology).

To start, this is a problem across the market, not with any individual company. As we noted in our capital efficiency research, It is possible that a consolidator begins to acquire smaller firms - and those firms that are left out of this consolidation are simply not able to compete in the future. This would address the core point about the ‘tragedy of the commons’, to some degree, but it is not a certainty, either.

Second , recognizing this dynamic may lead some vendors to begin to think more about value differentiation, not just product feature differentiation. That may help them stand out from the larger vendor set (so, the ‘tragedy of the commons’ continues to exist, but some firms learn to work around it).

Third, firms that have robust services business within real estate and facilities may be well positioned to focus on partnering with other solution providers instead of developing their own solutions. While, again, this may not appear to be in the interest of an individual solution or service provider it is better for the market holistically. Firms with market traction and scale are able to reach and sell to customers, and may have a quicker time to value. Startups should also think more about indirect, partner-driven go to market (which we can help with!).

Finally, we don’t see a cliff event or other inflection point in this dynamic, but we do think that understanding it may be the first step to operating more successfully in a market like this.

And now, back to our regular scheduled programming.

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Smart building product launches and related announcements:

• Measurabl launched a free sustainability software solution that onboarded 1 billion square feet of real estate across 32 countries within weeks, marking the fastest adoption in the company’s history.

  • 1B square feet is impressive, and a number that very few smart building vendors crack. Of course, if based on utility bills, not physical meters, it is easier to scale rapidly. This an other moves all seem to be providing a hedge in case Energy Star loses funding - however, the algorithm used by EStar is not public, making a complete and full replacement potentially difficult.

• Carbon Lighthouse rebranded as Centinel to better reflect its mission of delivering profitable energy savings for building owners while protecting the environment. The firm was an early innovator in energy efficiency as a service (EEAAS) for commercial real estate.

• Deepki announced plans to expand its U.S. team from about 12 to 100 employees to support the growing demand for energy-efficient and climate-resilient real estate solutions.