The most overlooked energy leak and the infrastructure to fix it
Why we invested in VARM
Rising electricity prices, the “Dunkelflaute”, and massive power cuts in Europe are not the only reasons many people and governments have refocused on making houses more energy-efficient over the last few years. These energy inefficiencies are a financial burden on residents and place a huge chunk of load on the electricity grid along with significant carbon emissions. Buildings take a bigger slice of total global energy consumption than sectors like transport. But the infrastructure to fix one of their biggest energy leaks is missing.
Our homes are leaking energy
Most of us spend time in our homes almost every day, year-round. And most of the time, we use energy: the lights are on, the laptop is being charged, the kettle is boiling; we run the heaters to feel warm in winter, and a fan to cool off in summer. Each year Europe spends around €400B on importing oil and gas to ensure consistent energy supply, which is not only taking a toll on emissions, but also on energy resilience. Heating and cooling are by far the biggest energy suckers here, making up about 70 percent of building energy use in advanced economies.
This high share means that even small inefficiencies add up quickly. Many businesses have focused on generating this heat energy more sustainably, pushing for the expansion of solar and heat pumps. And while these technologies are necessary, there is a low-hanging fruit that is often overlooked: Insulation.
Through walls, roofs, windows, and air leaks, buildings lose heat. The physics is simple: without proper insulation and sealing, the thermal energy supplied by heating or cooling systems, no matter how sustainably generated, simply escapes the building. The professional insulation of a single-family home can cut energy consumption in half.
From low margins to high impact
When the co-founders of VARM first looked into the sector, they saw the opportunity to provide a cheaper first step toward energy-efficient homes. Compared to high-CAPEX solar or heat pump installations, insulation improvements are a more realistic investment for the majority of homeowners and pay for themselves much faster.
But despite the affordability and massive potential for impact, the insulation market remains surprisingly underserved, with only 1% of buildings being renovated to become more efficient each year. With a €10B German market alone, the issue isn’t demand, but the lack of infrastructure to deliver at scale.
Insulation is a physical, hands-on industry that has traditionally been local, manual, and fragmented. This works well at a small scale. But as soon as volume increases, administrative work piles up. Planning site visits, coordinating teams, ordering materials, handling customer communication, and ensuring quality across many small projects eats into margins and limits growth.
What’s missing is an infrastructure layer that allows insulation to be delivered repeatedly, reliably, and at much higher volume.
Building the operating system for mass insulation
Building that layer does not mean replacing installers or changing the craft. It means rethinking how projects are planned, how teams are trained and scheduled, how quality is ensured, and how demand is matched with capacity. It means managing a lot of moving parts across thousands of small projects. At the core of it, this is an operations problem.
Christian and Sebastian were up for the challenge. With their backgrounds in operations, they have mastered running a tight ship in their previous ventures and know how to maximize revenue with tech-enabled optimization. So on top of adding their own in-house insulation teams to the market, the founders of VARM decided to build the digital infrastructure that helps new insulation businesses grow.
Their “cloud installer” functions as a reverse franchise: they train and kickstart insulation teams all across Germany that become part of VARM network, performing insulations under the brand, and benefiting from their operating system. These local teams do the work on site along with VARM’s own in-house teams. The company ensures all cloud installers are trained and equipped to get going, and takes responsibility for making the system around that manual work function at scale.
Aiming to steer 1000 insulation projects daily, coordination becomes a critical challenge. Site visits, schedules, materials, quality checks, and customer communication all have to line up across many small jobs. VARM uses their AI-powered and context-aware software to handle this coordination centrally. Clear processes and visibility take over scattered notes, reducing chaos and improving the experience for both workers and customers.
Luckily, many of the installers that VARM trains already have strong local networks and a solid reputation worth keeping. As installers gain capacity to take on more jobs than word-of-mouth can get them, the VARM network gives them access to more projects without them having to expand their own sales or admin setup. The more houses get insulated, the better – for the partners, for the homeowners, and for the planet.
One major bottleneck remains: people. At the end of the day, more insulation jobs require more skilled teams, yet the skilled workforce in Europe is around 3 million craftsmen short. For small businesses, training people is expensive and takes time. Such an investment is hard to swallow. VARM uses its network and scale to make adding more insulation teams profitable, with teams reaching payback in five months. In the end, this means better business for insulation partners and more attractive jobs in a severely understaffed sector.
How quickly can we insulate 1 million homes?
By solving these problems for individual businesses, VARM is building the infrastructure that lets the whole industry scale. The model also allows the business to grow across the global market smoothly, simply adding international partners to the insulation network. The goals of the VARM team are ambitious: In the next 10 years, VARM wants to insulate 1 million houses.
We invested in the team around Christian and Sebastian in 2024, and since then we have witnessed impressive growth and operational maturity of their “cloud installer” model. As they are already adding over 130 projects each month, expanding in line with their ambition is within reach.
The impact is already measurable: VARM’s current installations save more than 2,250 tonnes of CO2 each year, along with saved electricity costs for residents. We are excited to support the team in the next steps of the journey, as they continue to address the insulation skills gap and reduce household emissions across Europe.
They seem very focused on Germany.
I wonder if we have a similar gap in Sweden.
As an immigrant living in Sweden, I actually think Sweden has done a pretty good job incentivizing energy upgrades in houses and keeping buildings efficient over time.
When I think about my life in Turkey, insulation was usually the first thing we did if we wanted to reduce heating costs. Not because of global warming awareness, but simply because energy was expensive. If you had an old building, you insulated it. That was the practical solution.
Maybe I’m oversimplifying things. These are just observations from an energy-enthusiastic engineer, not a policy expert.
But I need to read more about them to really understand the value they offer. Or I need to ask my friends living in Germany :)