Kylie Davis

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Kylie Davis

Welcome to the Proptech podcast. It's Kylie Davis here and I'm delighted to be your host as we explore the brave new world where technology, real estate, property ownership, design and construction all collide. It's so great to have you here and to share stories with you of innovation, opportunity and challenges. The aim of each episode is to introduce listeners to a proptech innovator who is pushing the boundaries of what's possible across how we design, build, buy, sell, rent and invest in property and all of the associated behaviors and activities around that. And there's a lot now, none of this would be possible without our sponsors. So a very big shout out to Hid digital identification and building access solutions.

Kylie Davis

Easypay making collecting payments easy for proptex dynamic methods the innovators behind forms live, REI forms live, and Realworks direct connect making moving easy and the Proptech association of Australia thank you for your support of the podcast. Now, have you heard about the push to electrify Australia's residential sector? It's a concerted campaign driven by the australian government to meet a target where 82% of our energy is generated through renewable resources rather than by coal and gas by 2030. And to hit this target, the vast majority of Australia's 12 million existing homes need to switch off fossil fuels and onto solar or wind power. But where on earth do you start?

Kylie Davis

Now?

Kylie Davis

This is something I'm personally looking for at my home, and the options and the adulting required is absolutely exhausting. But my next guest is changing all that. Alex Houlston is the CEO and co founder of Boom, also known as Boom Power, which is an Aussie climate tech business that delivers building electrification needs all in one platform to simplify electrifying homes, help with the decisions, and get access to reliable suppliers while verifying the emission impacts. It's being used by the banking sector to help their customers plan upgrades to homes. And Alex has had an extensive career in the renewable energy sector before starting boom in 2018 and I don't think his timing could have been any better. So here to tell us all about it, Alex Houlston, welcome to the Proptech podcast.

Alex Houlston

Thanks, Kylie. Thanks for having us.

Kylie Davis

It's great to have you here. Now, first question is always the hardest, Alex, what is the boom? Power elevator pitch.

Alex Houlston

So boom is Australia's leading building electrification platform. We make it easy to make the switch.

Kylie Davis

Awesome. So really want to pull this apart because I know energy efficiency in homes is such a big issue right now. Tell us a little bit more detail about how you do what you're doing.

Alex Houlston

Yeah, so Boom is a climate tech business, delivers on electrification needs all within one platform. So it's purpose built software that simplifies that building electrification process, eliminates all the complexity and uncertainty, makes a seamless and effortless decision making process, and able to find reliable suppliers, assess and track your environmental and financial impacts.

Kylie Davis

Okay, so is it for existing homes or is it for new homes or both?

Alex Houlston

It's for existing buildings.

Kylie Davis

Excellent. Okay, so it might not just be homes, it could also be office blocks or anything. Richard, industrial.

Alex Houlston

Yeah, we focus on the hard to reach markets. So homes are the first because households are what we know best. But increasingly, SMEs in particular, where it's really hard to actually get traction with building business owners who just don't have the time or energy to understand what they should be doing.

Kylie Davis

Okay, awesome. So why is this a problem? How big is the problem? Why do we need to electrify our homes and our SMEs?

Alex Houlston

Well, if we go to reach zero emissions, and we'd hope to do it, everyone's saying 2050, but I would have thought 2030 was a better goal.

Kylie Davis

Much better goal. We do not need to be old. Government promises kicking the can down that road.

Alex Houlston

If we assumed that it was going to happen by 2050, let's say, then the grid is increasingly renewable, which means that we're going to end up with most of our emissions coming from the gas appliances within our homes and businesses. And if we just look at the household market, that would mean retrofitting 50 homes every hour, every working hour to say 8 hours a day between now and 2050. So you can imagine if we crunch that then for ten years. Yes. It becomes a much bigger goal. A much bigger problem.

Kylie Davis

50 homes an hour, did you say?

Alex Houlston

It's just a thrilling.

Kylie Davis

Wow, so this is getting people off gas and converting over to electricity?

Alex Houlston

Yes.

Kylie Davis

Wow. So what's our rate at the moment? How good or bad are we at this right now?

Alex Houlston

Do we know that's a good question, actually. I don't know that.

Kylie Davis

One of the great joys of australian property ownership, it's one of the invisible pieces of data that nobody knows just yet. Right?

Alex Houlston

Yes. Even the banks, for example, valuation companies, that sort of thing. We don't really have a handle on what's happening out there because there's no one single repository for that kind of information. It's mainly done by Brady's contractors out there, replacing appliances within homes. And that's the way it's done.

Kylie Davis

Okay. Wow. Okay. And this is something that there's this weird coincidence that happens in the prop tech podcast. Maybe it's not a coincidence, maybe it is because I'm talking to you guys and you inspire me so much. But we are currently looking at introducing solar power to our house because the reason why is because I want to change all our appliances off gas to so. But it is hard. It's hard. It's a hard thing to do. And I interviewed recently Alice Todd from Val AI and then also Sonia Markovich from Evertat, and Sonia explained it beautifully by saying, trying to do this stuff feels like doing a PhD sometimes. And I was like, all the boom power, is it boom power or just boom or what are we calling boom? Okay, so how do you guys make that easy?

Kylie Davis

And what do I need to do?

Alex Houlston

So for a household, our business is b to c. So it's a white label platform. So for a household, you'd use consumer facing calculators to really easily work out what's the best cost benefit in your house. For me, for example, I've been in this house for three years. We've done the solar. You're right, you should do the solar first because then you can replace those electric appliances and use the power from your roof. We've done the heating and cooling and EV charger and the stovetop now still got instant hot water left. Now I'm three years in and I'm pretty passionate about it. So you can imagine if you're a consumer using that calculator, the boom front end, that you're probably not going to do everything at once, particularly if you're living in Victoria, for example, where there is predominantly gas appliances.

Alex Houlston

So you can always go back to that calculator to work out what's next. But how you'd use it is. So there are about 32 different combinations of appliances. And for example, Carly, if you do solar plus hot water to start with, that's going to have a very different cost benefit for you compared to doing solar with your heating and cooling, or just doing solar on its own, because you can use those two things together. So there are about 32 different combinations of products that the platform calculates. Sounds very complicated, but what we do is turn really sophisticated energy modeling into something simple that you can then go, okay, well, what if I don't do that? What impact does that have on my cost benefit? You then make a decision. It links you to suppliers through our marketplace. That boom is a marketplace platform.

Alex Houlston

And so you can then select which suppliers you want to install the products. And then we gather data from devices like solar inverters or metering devices to support you throughout that journey of electrification, which, as I say, I'm three years in, it could be ten years for a lot of households. And when you get to the end of ten years, that hot water system may stop working. That's true.

Kylie Davis

It might be time for it to be replaced anyway. But there is so much in this. So we know from the conversations we've been having with Valai and with Evitat, there's what, 12 million properties in Australia, and about 78% to 80% are existing homes that are older than, what, 1980 or 85 or something like that. So these are the properties in our property ecosystem that need to be upgraded in terms of energy efficiency because they're probably a two star out of seven star rating. How big a challenge is this? How much does a typical, I mean, 32 variations that you could have.

Kylie Davis

But what are the savings that you're going to be making or what's the cost that you're looking at, or the investment that you're looking at in moving a typical two star family home over from gas, heating, gas, hot water and maybe a gas stove over to being electric.

Alex Houlston

So it depends.

Kylie Davis

Yeah, of course it does.

Alex Houlston

Every household is different.

Kylie Davis

But if we ignore ev, let's assume a nuclear family. So mum and dad and two kids.

Alex Houlston

At the moment, because we're a bootstraps company until this year. And so we've always built out what customers want and what they're asking for. And what people are asking for so far is electrification, whereas the star rating to date is mainly influenced by the building envelope, as in windows and the outside. So for us, you're looking at somewhere between ten and 20,000 for full electrification of the building aligns with where the banks are looking at, I think is CBA with their green loan, that's about 30,000 available, which is probably at the higher end for what would be at the higher end for most households.

Kylie Davis

Yeah. Okay, so electrification and energy efficiency, not the same thing, but obviously I feel a ven diagram coming on. Right? Yes, there's definitely quite a big overlap in mean, I want it because I want an induction stove, because I have a stovetop coffee pot and it's just so much faster than doing this. Is the Kylie Davis complete? I vested in.

Alex Houlston

The cost. You'll pay for the hot water, which is what you want, is far less for electric than gas for the heat.

Kylie Davis

Alex, tell me the story. How did you guys. Now your co founders are Tosh and David Perry and Tosh Chateau. How did you guys get into this?

Alex Houlston

Well, Tosh and I met about eleven years ago and I was working for the state government on big housing redevelopments, mainly focused on the sustainability aspects. So I was also working on energy performance contracts in the high rise buildings for public housing. And I'd spent three years setting up an energy services company, which we just signed the heads of agreement. It was focused on three precincts in Carlton and it'd taken three years when for me it probably should have been twelve months. So to be honest, I'd got to the point where I was feeling a little frustrated after five years of action. But yeah, it should have been a lot quicker. And so I met Tosh at a point where I was thinking, well, maybe we're better off going out and doing this in the private sector or helping community housing.

Alex Houlston

It was my first thought because I'd worked in the public private redevelopment and Tosh was at CSIRO. He's been there about two years from memory and was feeling equally frustrated about the fact that he was having to do business development and bring in research dollars when he felt like those research dollars might better off spent on putting solar on rooftops. So he was writing a report called the intelligent Grid, which was all about the business models for distributed energy across the country. He could do, still can, a business case using a spreadsheet within half an hour that would take most people a week or like days.

Alex Houlston

And given that I'd done the procurement of large scale projects and then project management and he'd done that upfront modeling, we thought, well, collectively we could go out and replace all of those shiny consulting reports that end up stuck on shelves because people don't know what to do with them or time to actually implement and help them to actually implement projects based on really good insights. So we set up a consulting firm and yeah, it became really quickly to us that. Sorry, quicker. Became very obvious to us quite quickly that the best way to scale up that impact was through software. Took us a few years to find David Perry. To be honest, I still haven't met anybody else that has David's in depth knowledge of energy in terms of the financials, but also a very technical point of view.

Alex Houlston

He's an electrical engineer with a phd in neuroscience. Taught himself to code. So someone who has that deep energy knowledge, who knows how to build software, I'm still looking, Carly, if you know anyone.

Kylie Davis

Yeah, I love that he's got a background in both engineering and neuroscience. That's pretty unexpected, right?

Alex Houlston

Yeah, it is.

Kylie Davis

But also kind of helpful in your brain is made up of electrical impulses. Maybe it's not.

Alex Houlston

I thought about it after I've thought about it. We've been working together for six years now, I think, and there's quite a lot of coding and electrical engineering, apparently.

Kylie Davis

Yes. Who knew?

Alex Houlston

So that kind of translates into coding for neuroscience. And he has explained a few things to me over the years, and I think it was. I think it's Richard Branson that says, always employ people who are more intelligent than you. I managed to find business partners who are more intelligent than me, which is a great thing.

Kylie Davis

Fantastic. I want to stick him and Sarah Bell on a panel and just let them go. That would be fabulous. Mental note to self and to sarah.

Kylie Davis

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Kylie Davis

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Kylie Davis

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Kylie Davis

You mentioned before, how long have you guys been around for now? How long has it take you? Six years did you say? Or how long?

Alex Houlston

Yeah, technically we incorporated, boom, six years ago as a separate company. We cannibalized all of the consulting customers we had back then. But with COVID realistically the platform has been live for about two and a half to three years.

Kylie Davis

Right, okay, and you mentioned before that you've just got a seed round or you're in the process of locking your seed round in?

Alex Houlston

Yes, this week we're getting final offers.

Kylie Davis

Yes. Fabulous. And so what will that let you do?

Alex Houlston

It's still focused for the time being at least next twelve years, twelve months on the australian market. What it's allowing us to do is actually, sorry, I should go back. So we actually signed a safe with boundless earth towards the end of last year that was focused on them providing catalytic funding to focus the platform on the banking. We're now we're launching with Bank Australia in three weeks time. So they will have that consumer facing calculator that will allow their mortgage loan book customers to electrify their homes. So the investment that's coming is also focused on boom being utilized by the banking sector. We're in the very late stages of a partnership that will give us direct access in there.

Alex Houlston

The funding that will come alongside it is very much focused on enabling the banks or the mortgage, I should say mortgage lenders to help their mortgage loan book customers to effectively dealing with their financed emissions scope. Three emissions.

Kylie Davis

Yeah. So we're seeing this all across the funding or the finance sector, aren't we, that banks and I guess insurance companies too are kind of desperate to understand what's the climate risk sitting inside their portfolios and carbon risk. So you said before that your model was b to c. Is this a kind of example of that model? So Bank Australia is going to have a boom powered calculator available for its customers?

Alex Houlston

Yes, in a way. Ironically, simply because of their own approach to risk and governance, it will actually be boom branded in this. So it is what it is.

Kylie Davis

Who are we to question the banking sector?

Alex Houlston

And they're an awesome organization. We're really excited to work with Bank Australia because they actually probably pretty unique in that they have a very public target for their 2035 net zero emissions target for them. The risk mainly is around these recommending particular suppliers. We have a long history of property and procurement, competitive procurement built into the platform. We've had about, I think around $12 million worth of projects procured directly through boom. They were very comfortable with our approach to competitive procurement and property. So we can recommend the suppliers as a boom branded version. But yes, the idea would always be in future. There's been a need to see and it may well be for Bank Australia in future.

Kylie Davis

And so if I am not a bank Australia customer and or how can I use the boom platform? Is there just a b at the moment I can't. Oh no. Electrification. I have coffee that needs urchin boiling. Help me out here.

Alex Houlston

I'm sure I can help you. You want to set up half an hour with it? 10 minutes? Yes, you can be a beta customer. We've been doing some pretty stringent beta testing over the last couple of months. You've just missed it. But I'm sure I can get my own developers to go through it with you.

Kylie Davis

Yeah. Okay, so I need to be banking with someone or I need to be using one of your b to c?

Alex Houlston

You will need to. Yes, in future I will need to. Okay, sorry, go.

Kylie Davis

Is Bank Australia the first one to come on board or are there others out there?

Alex Houlston

Bank Australia is the first bank. We cover about 80% of the social housing market in Victoria, for example. So they were our first customer type. So yeah. The two largest housing associations in the country, for example, use boom to assess their portfolios for electrification opportunities. They then procure products through the platform and then they gather data from metering devices and solar inverters where their tenants allow to give them an aggregated picture of the portfolio, which is similar to banks. I guess it took us probably longer than we realized, longer than it should have to realize that a mortgage loan book is a property portfolio, just like a residential landlord. So for a bank, they want to treat it as a property portfolio and get those insights on the impacts they've had to avoid greenwashing.

Alex Houlston

So boom gives them that transparency over the impacts from a financial and environmental point of view.

Kylie Davis

Okay, so you're in the process of securing your sort of seed funding. You've got a big customer about to come on board. What else is on your roadmap? How are you guys rolling out?

Alex Houlston

We will be focused on the banking sector over the next twelve to 18 months. It's become our sort of beachhead. That term is quite new to me. In the last couple of months I heard it through climate kick, the beachhead customer segment.