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Report: Sensing, Control Startups Poised to Disrupt HVAC Sector

Nov. 17, 2015
As developers of core HVAC struggle, new companies offer novel sensors and controls to improve efficiencies in heating and cooling, Lux Research says.

Sensing and control startups are threatening incumbents in the HVAC world, as core equipment developers struggle with innovation and finances, independent research and advisory firm Lux Research says.

According to Lux Research, just as in the building-energy-management-systems software space, startups are innovating faster and challenging large building-controls companies by installing their own connected devices and offering services.

“Large building companies are coming under siege by nimble startups,” Alex Herceg, P.Eng., Lux Research analyst and lead author of the report “Identifying Disruption in Advanced HVAC Technologies for Commercial Buildings,” said.

“In the emerging landscape, large building-equipment controls companies must proactively partner with or acquire HVAC tech developers, while utilities and telecom companies can leverage sensors and controls companies to cross-sell services,” Herceg added.

Lux Research analysts evaluated and rated emerging HVAC technologies and startups. Among their findings:

  • Ventilation technologies set for strong growth. Companies with enhanced ventilation technologies will see robust growth in the near term. Regulatory pushes are helping generate market pull—third-party certifications are growing at a 13-percent compound annual growth rate globally.
  • Hardware-heavy offerings are becoming “servitized.” Many startups have begun to bundle hardware into a service, ending outdated energy-performance contracting. Companies such as Daintree Networks and Entic are driving growth rates as high as 300 percent year over year using this "servitized" approach.
  • Comprehensive offerings have an edge. Cyclon Controls, Distech Controls, Enlighted, and Entic are among the “dominant” HVAC sensors and controls companies on the Lux Innovation Grid. All four offer a full suite of sensing and controls products.

To view the research, go to