In this Research Note, we examine the Smart Buildings business of ABB, based on their 2022 results, Factsheet and building technology-related acquisitions and partnerships throughout 2022.

The Smart Buildings division, one of 6 business units of the $14.1 billion Electrification segment of ABB, reported revenues in the range of $2,750 to $3,250 million for 2022. The division is primarily focused on electrical distribution products such as wiring devices and miniature breakers and claims to be #1-2 in distribution enclosures and DIN-Rail products.

The secondary focus of the division is on home and building automation solutions. ABB views its Smart Buildings division as a high-growth segment with a focus on expanding its portfolio for commercial buildings through innovation with digital building management systems and bolt-on acquisitions.

Their portfolio of building and energy management systems includes Cylon’s Active Energy solution, rebranded to ABB Ability Building Ecosystem, i-bus KNX intelligent building control systems and their Aspect IBMS (Integrated Building Management Solutions). While ABB only launched ABB Ability Building Ecosystem in the United States market in July 2021, the division anticipates high growth for the platform in the coming years.

ABB Acquisitions & Divestments

In February 2023 in the Q4 earning release, ABB confirmed that it would exit the emergency lighting business within the Smart Buildings division during 2023, as “the strategic fit with energy distribution and home and building automation is limited”. This business generated revenues of approximately $160 million.

In October 2022, they acquired Aski Energy, an Austrian firm, further expanding their digital energy management portfolio and accelerating the development of their ecosystem of digital energy services. ASKI Energy serves customers across Germany, Austria and Switzerland, has more than 30 years of experience in software and hardware development and has successfully scaled up its business model within load-management applications.

Its energy management platform and control hardware are used in more than 11,000 sites including manufacturing facilities, shopping malls, tourist hotels, commercial buildings, retail and restaurants, and smart homes. The firm has 16 employees and around $2 million in revenues.

ABB’s acquisition of ASKI Energy will enable it to bring to market new energy optimization and control features and technologies. The deal will also drive the introduction of more advanced energy management solutions for smart grids, solar, electric vehicle charging, battery energy storage systems (BESS), and demand-side management.

Partnerships with Startups

The division has been focusing on partnering with startups for several years, in line with ABB’s overall strategy and more recently has made a number of moves to expand their ecosystem of innovation partners.

In November 2022, ABB Technology Ventures closed a minority investment in Tallarna. The UK startup was a winner of ABB Electrification’s 2021 Startup Challenge.

Through the subsequent partnership, they created an assessment tool for ABB Ability Energy Manager users, which tracks actual consumption against energy targets and benchmarks performance against a set of relevant peers. The solution helps businesses to match their energy use with consumption and benchmark against other buildings to make informed decisions to achieve net-zero targets.

Formerly known as Pivot Energy Services, the company develops ML technology that analyses energy use of buildings in order to recommend where savings could be made. Tallarna uses an agent-based approach to energy modelling and their Kestrel decision-support solution to create financially viable retrofits. The result is a business case for building retrofits, with improved accuracy and greater confidence in project success.

MOOST, a Swiss startup, one of the winners of the 2022 ABB Electrification Startup Challenge will work closely with the Electrification Smart Building’s team to bring its SaaS Smart Home Recommender platform to the market. Their product is a user engagement platform that helps building technology companies yield more revenues through better user engagement. Based on real-time analysis of data from household’s connected devices (heating, cars, blinds, etc.), users receive proactive notifications that help them increase energy efficiency.

In August 2022, ABB announced an investment in a Stockholm-based startup, Mavenoid. The hardware support platform uses innovative artificial intelligence (AI) and machine learning (ML) to solve customer enquiries with high success rates. Already in use in selected markets with smart home solutions, the self-service and live support platform spans automation, workflow, escalation, and product intelligence feedback. Over the coming months, the partnership will expand from end users in homes into their installer network to cover commercial buildings.

In July 2022, ABB Technology Ventures was the lead investor in the $30 million Series A funding round of Canadian start-up company BrainBox AI which has developed predictive and self-adaptive artificial intelligence to optimize buildings’ energy usage, carbon footprint, and operational efficiency. The strategic partnership allows ABB’s Smart Buildings division to combine its existing portfolio of digital solutions, particularly the Ability Building Ecosystem, with BrainBox AI’s autonomous AI technology. A key part of the relationship between them included a global distribution agreement, announced in January 2022, to bring the AI-driven solution to ABB’s existing customer base.

ABB’s strategy to expand its smart building solutions beyond connected electrical distribution products is taking shape, through innovation with digital building management systems augmented by strategic partnerships with innovative startups.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.