In this Research Note, we examine Nuuka Solutions, a Finnish SaaS provider of a cloud-based building analytics platform to centrally monitor and manage the energy efficiency, indoor air quality and HVAC performance of real estate portfolios. This analysis covers their 2021 financial performance, 2022 revenue targets, stakeholder changes, growth strategy and recent projects.

This article, part of a series covering the activities of new entrants such as Spica Technologies, Flowscape, Uptick and PlanRadar, updates the information in our 2021 Startups Report and our 2022 Digital Workplace Report. 

Nuuka Solutions, established in Helsinki in 2013, has 33 employees on LinkedIn and a branch office in Stockholm, Sweden. The startup pivoted its offering in 2021 to focus on commercial and public buildings that drive higher deal size, growth and margin, withdrawing completely from the higher churn residential markets.

Nuuka AI Optimize software updates and optimizes a building’s HVAC systems in real-time, reducing energy costs and maintaining optimal indoor climate while Nuuka Diagnostics fault detection and diagnostic software monitors building systems remotely. Nuuka’s hardware-independent Connect platform is currently in use in around 3,000 buildings / 8 million square meters across ten countries. The platform is hosted on Microsoft Azure and has more than 100 integrations, covering all major building automation systems and sensors on the market.

Stakeholders in Nuuka Solutions include Finnish investment group Loudspring Oyj, with a 24.2% stake, a Boston based US investment company who acquired an 18.1% ownership in February 2022 for €2 million and a strategic investor, YIT, Finland’s largest construction company, who acquired a 20.2% share in November 2020. 

Customers include Edge Technologies, the Amsterdam-based trendsetter in smart offices, as well as the City of Helsinki, Finnish construction group Lapti and Nordic realestate fund manager Genesta.

YIT has been deploying Nuuka solutions and services in its lifecycle business for a while. Recent examples include the YIT Workery+, a flexible workspace hub located in Vallila, a neighbourhood of Helsinki, Finland. Opened in May 2021, the work hub is based on companies securing workspaces for the desired number of employees and paying for space according to use. Nuuka’s products are used to connect the property to the cloud to provide Building Management System (BMS) data to the hub’s different applications. In addition, Nuuka ensures and diagnoses the proper functioning of the building 24/7 and flags the relevant errors by notifying property management with relevant data and maintenance instructions. Nuuka uses AI to ensure indoor room temperatures and carbon dioxide levels stay optimal for the changing and flexible property usage. 

YIT is also using the Nuuka Diagnostics and AI-Optimize software to anticipate future maintenance, reduce the need for renovations and improve the indoor air and energy efficiency of the Jynkkäskolan school in Kuopio, Finland. 

Loudspring’s 2021 Annual Report highlighted the financial performance and targets of Nuuka. Despite the pivot and the pandemic, Nuuka’s total SaaS revenue in 2021 was estimated to have grown 25% to €1.01 million while total 2021 revenue was estimated to have grown to €1.37 million (+5%). This increase was slightly below target due to the pandemic and the pivot to the new offering, as substantial onboarding revenues from residential markets were no longer generated.

During Q4, Nuuka’s total quarterly revenue grew 50% to €460k compared to Q3. Growth was driven by new products and largely based on onboarding revenue growth which will secure further Monthly Recurring Revenue (MRR) growth in H1-2022 as onboarding precedes SaaS revenue. As a result, January 2022 MRR grew to €93k. During the last five months, Nuuka has signed and agreed 10 new customers, including e.g. signing a gross area of almost 200,000 m2 during the first days of 2022.

Full year 2022 targets for ARR (Annual Recurring Revenue) are forecast to reach over €1.6 million. Total revenue is targeted to grow to €2.5 million (+80%). Nuuka is confident of reaching this target as over 90% of the SaaS target will come from existing customer contracts, agreed current customer extensions and small planned upsell to current customers.

With the major shareholder, Loudspring focusing its strategy on the ownership and governance of its Eagle Filters subsidiary, an exit of Nuuka is likely in the not too distant future.

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