Reservoir raises $8M seed round for smarter, grid-friendly water heaters

Water heaters get little attention, but they account for about 18% of a household’s total energy budget and are a leading cause of residential water damage. Luke Winston-Almanzar, previously chief business officer at 3D-printing startup Formlabs, co-founded Reservoir with Gabriel Parisi-Amon and Jake Felser to build one he’d actually want to buy. “The typical water heater is devoid of intelligence, it’s using a god-awful amount of energy, and my air fryer is smarter than it,” he told TechCrunch.

Reservoir announced Wednesday that it raised $8 million in a seed round led by Asymmetric Capital Partners, with participation from Founder Collective and MCJ. The funding will help install more of its water heaters around Boston, its initial market. Reservoir has installed about 100 devices to date, and Winston-Almanzar said the company hopes to reach around 1,000 by the end of next year — “That’s when you start talking about a megawatt-scale in terms of capacity,” he said.

Storing megawatt-hours of energy as hot water could help stabilize the grid. Unlike typical water heaters, which react only to tank temperature, Reservoir predicts when a household will need hot water and heats the tank when electricity demand and prices are low. Its heat pump is nearly four times more efficient than an electric water heater and five times more efficient than a natural gas one, and the company says it has already shown it can relieve grid strain at the neighborhood level. Winston-Almanzar said Reservoir could eventually aggregate its fleet to join utility demand-response programs, using those payments to help keep prices down.

But energy storage alone won’t sell water heaters, since most people simply replace theirs with whatever their plumber has on hand — so Reservoir added features like an ultrasonic leak sensor with app alerts, and in its “Max” version, a recirculation valve for instant hot water and a “party mode” that can push a 50-gallon tank to deliver up to 150 gallons. The company also started its own plumbing arm to keep pricing simple, a move Winston-Almanzar credited to his time at Formlabs.

Pricing includes installation: the Max costs $6,500 and the Core $5,000, though a $1,050 rebate for Massachusetts residents brings the Core down to $3,950 — competitive with existing heat pump water heaters — with a 10-year warranty and up to $1,000 in annual energy savings for a typical Boston home, Winston-Almanzar said.

Why it matters

Heat pump water heaters have so far failed to gain real market share; if Reservoir can make grid-friendly hardware that also wins on price and convenience, it could be a rare case where climate tech sells itself.