The owners of 19 million rented residential properties will need to spend £570B making their properties more energy efficient and cutting carbon over the next two decades, according to the UK government.
But how best to spend their money and how that affects asset values is something of an unknown.
With those questions in mind, startup firm Domna has just raised £70M from private equity firm Leon Capital to scale up its business, which aims to provide the technology and services landlords need to profitably retrofit their assets.
It is the largest initial fund-raise for a female founding team ever in Europe, smashing the previous record of £2.9M in 2024 from wealth-building platform Belong, the company said.
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“The retrofit supply chain is woeful,” CEO Anna Moore told Bisnow. “Even when landlords want to do the right thing, it’s hard. We need to make it easier for them to cut carbon.”
In addition to Moore, a former McKinsey partner, the company is led by Chief Technology Officer Khalim Conn-Kowlessar, formerly of Exii. Former British Land and Essensys leader Chenai Gondo was the company’s chief operating officer and left in December.
Domna is the largest residential retrofit company in the UK, helping about 15,000 socially rented households a year decarbonise. On an annual basis, it claims to abate 20 kilotons of carbon dioxide, cut £7M in fuel poverty and add £114M to property values. Its clients include social housing owners and private equity firms investing in the private rented sector.
In addition to its existing tech platform, it has used some of the funds raised from Leon to buy two property services firms: The Warmfront Team and Osmosis ACD.
Warmfront specialises in energy-efficiency surveying services and works with more than 60 social housing associations in the UK, including seven of the 10 largest social housing providers in the UK, representing more than 900,000 homes.
Osmosis ACD is a retrofit consultancy specialising in providing Publicly Available Specifications 2035-compliant retrofit assessment, coordination and design to housing associations and local authorities.
The software developed by Domna predicts where owners can best spend their money to improve energy efficiency and cut carbon. It uses information from multiple sources, including historical data from previous retrofits it has undertaken and national UK government datasets on housing, and applies them to individual properties. The company says its software has a 97% accuracy rate.
But rather than just providing the software and analytics, Moore said, Domna also wants to offer the services property owners need to make the physical retrofit required. Offering everything they need in one place is simpler for the property owner, but it also provides a better return for Domna.
“There’s more value in providing services as well, rather than just the software model,” Moore said, adding that undertaking the retrofit work allows it to gather more data, in turn improving the quality of the software.
With that in mind, Domna is looking to acquire more services businesses.
The aim is to improve the energy performance certificate ratings of rented residential properties. As of 2024, rented residential properties needed an EPC rating of E or better. By 2030, that EPC rating will need to rise to C or above under current regulations.
Domna’s software and services can help a property to improve its rating, Moore said. Common interventions include replacing older insulation or energy-inefficient gas boilers.
That improvement leads to both a reduction in bills and value improvement. Value improvements on properties where interventions are made average 20% per property, or just under £60K based on the average UK house price of £292K.
If interventions move an asset from a low EPC band in which fines would be levied to a higher band, value increases can be as high as 60%.
“That’s the payback,” Moore said. “The green premium is clear.”
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