Most homeowners can’t remember the last time they changed the air filters for their heating and air conditioning units. Startup FilterEasy wants to make sure homeowners never have to remember again.
FilterEasy sells air filters through an online subscription service that sends filters to homeowners on a prescribed schedule. Thad Tarkington, CEO and co-founder of the Raleigh, NC-based company, says that by helping heating and air conditioning equipment run more efficiently, filter subscriptions help consumers save energy, time, and money. And as technology brings homeowners new energy-efficiency capabilities, the company expects its offering to find a place in so-called smart homes.
After winning over some consumers to the service, FilterEasy has now won over investors. The company plans to announce Friday that it has raised $1.2 million in seed funding, which Tarkington says will be used to boost marketing efforts and further develop its software. San Francisco-based Azure Capital Partners and Research Triangle Park, NC-based RTP Capital Associates led the round, joined by angel investors.
A dirty air filter makes a heating or cooling system work harder and use more energy. Over a three-month span, a clean air filter uses 90 kilowatt hours of electricity, Tarkington explains. Unchanged, the dirty air filter will cause a heating, ventilation, or cooling unit to more than double its power usage to 200 kWh by the end of the next three months. The company estimates that homeowners can save more than $100 a year in heating and cooling costs by regularly changing filters.
Consumers sign up with FilterEasy online and set up a schedule for how frequently they want replacement air filters sent to them. The recommended replacement schedule is every three months, but heavier use of heating and cooling systems could require more frequent filter changes. In Florida, where air conditioners run constantly, monthly changes may be necessary, Tarkington says. But in a milder part of the country, a 90-day schedule might be more appropriate.
FilterEasy stocks filters of different sizes and types, sold in the same $10-$20 price range as those sold by brick and mortar retailers—without the overhead costs that come from running a brick and mortar business. The company sells filters made by Flanders, a global manufacturer and distributor of air filters. Orders are fulfilled from FilterEasy’s warehouse south of Raleigh. Shipping is free and the company says it has customers throughout the United States, as well as a handful in Canada.
FilterEasy started at North Carolina State University, where Tarkington and company co-founder Kevin Barry were undergraduate students. One day, Barry went shopping for a replacement air filter for his apartment’s heating and cooling unit. The store had filters in 20 different sizes. Barry bought one, returned home, and then discovered he bought the wrong size. While he was able to find the proper size on a second trip, he realized he would have to do the same thing again three months later. He and Tarkington wanted to find a better way and they decided to form a company. In 2013, FilterEasy graduated from The Iron Yard, a Greenville, SC-based accelerator.
Selling air filters, even via online subscriptions, does not immediately jump to mind as a technology business. But Tarkington says air filter subscriptions fit with the concept of smart homes, where automated systems save energy by managing temperature and lighting. Once set, homeowners don’t think about the systems. Likewise, Tarkington says an air filter subscription spares homeowners from thinking about when to change filters while also helping equipment operate optimally.
“Right now, it’s a monthly schedule,” Tarkington says. “We’re really looking at how to get a smart schedule.”
FilterEasy is now researching ways to improve its offering by using data to determine exactly when a home’s filters should be changed. Tarkington won’t discuss potential industry partnerships, but he acknowledges that relationships with smart thermostat makers make sense for the company. Data from those thermostats could help FilterEasy make scheduling decisions. For now, FilterEasy analyzes its own customer data—such as customer locations and filter change frequency—to help homeowners determine filter-changing schedules. As FilterEasy gets more customers, it gets more data its software can crunch.
The company finds some of its customers through partnerships with companies that service heating and cooling equipment as well as energy audit companies, who can suggest FilterEasy’s service to homeowners. But Tarkington says most FilterEasy customers find the company through its online marketing. Though FilterEasy focuses on residential customers, Tarkington says expansion to commercial customers is a goal this year as the company develops more relationships with heating and cooling equipment-related businesses.
Tarkington concedes that FilterEasy has no monopoly on online filter sales. Large brick and mortar retailers already have relationships with filter-buying consumers. The Home Depot (NYSE: HD), for one, sells air filters in stores and online. Air filters are also among the thousands of items shoppers can buy from Amazon.com (NASDAQ: AMZN). But Tarkington says FilterEasy can distinguish itself with a targeted customer experience that makes the right filter change recommendations at the right time. In other words, he sees the future for filters in data.
“That’s what we’re looking at down the road,” Tarkington says. “How can we look at those [data] to pinpoint exactly when to change your filter.”