Updated: Dec 2, 2022
BETHESDA, Md. — Service 1st Financial LLC, a financial technology, innovation, and training company serving residential home service contractors, announced the initial close of its Series B funding co-led by S2G Ventures. The company simultaneously closed on a subordinated debt facility also led by S2G Ventures. In total, Service 1st secured new capital commitments of over $20 million. In 2019, Service 1st was incubated by founder and CEO, Anuj Khanna, and Thayer Street Partners with the goal of transforming the way home comfort is purchased and sold in the United States.
With heating, cooling, and plumbing system replacements continually rising in cost, Service 1st's Premier Program offers homeowners a service to replace and upgrade their home comfort systems. For a monthly payment, homeowners receive the latest energy-efficient equipment, while eliminating the common pain points associated with owning, maintaining, and repairing such systems. The Premier Program aligns with the company's commitment to advancing sustainability by fostering more rapid replacement of older, inefficient systems, incentivizing consumers to opt for high-efficiency systems and ensuring that such systems are properly maintained.
The company has formed strategic partnerships with sustainability-focused HVAC and plumbing original equipment manufacturers (OEMs), contractor success groups and best practice training organizations, as well as home services contractors who play an essential role in driving accessibility to climate-smart, energy-efficient home comfort solutions.
"Advancing sustainability in the home comfort sector requires both new technologies and new business models that can deploy these technologies at scale. While the vast majority of sector resources are dedicated to technological innovation, Service 1st is addressing the need to catalyze business model innovation to make these technologies more widely available for consumer use," said Khanna. "We have established ourselves as the only independent provider of comprehensive residential Home Comfort-as-a-Service leasing programs in the market and look forward to playing our part in helping to decarbonize the home comfort industry in the years to come."
Service 1st will leverage this funding to rapidly scale the company through geographic expansion domestically, new product innovation, and investments in sales training. In addition, the company intends to develop and deploy technology-based tools to improve customers' home comfort user experience and equip contractors to sell the Premier Program through new channels, including, but not limited to, utility partnerships which can drive greater access for homeowners.
The recent passing of the Inflation Reduction Act also provides the company the opportunity to promote, alone or in conjunction with its OEM partners, the selection of high-efficiency heat pump technology products by consumers. Today, more than 30% of Service 1st's Premier Program portfolio is comprised of electrified heat pumps.
"S2G Ventures' investment in Service 1st reflects our belief that a shift to a service-based consumption model is a critical step in advancing sustainability within the home comfort industry," said Andrea Woodside, vice president, real assets at S2G Ventures. "Service 1st is effectively meeting the need for transformative business models that make energy-efficient products more accessible and we look forward to partnering with them to continue scaling their business."