A building that regulates its own energy systems and automates rooms’ temperatures based on whether people are present or not via real-time data, to optimize energy consumption and save costs, might sound like something out of a sci-fi movie, but this is what Singapore-based startup SensorFlow is doing.
Through an AI-driven automated Heat, Ventilation, and Air-Conditioning (HVAC) platform, and Internet of Things (IoT) network, the startup aims to help property owners streamline energy-related decision-making processes and obtain data-driven insights to increase housekeeping productivity by optimizing the deployment of manpower throughout a building.
The firm was recently awarded a place on Cleantech Group’s new edition of #APAC25 2020, a selected list that recognizes companies engaged in sustainable innovation across the Asia Pacific region.
SensorFlow started in 2016 as the brainchild of co-founders Saikrishnan Ranganathan, chief executive officer, and Max Pagel, chief technology officer. The two met during Entrepreneur First, a company builder program, and joined forces to pursue their common goal of making smart buildings a reality. Ranganathan worked as a full-stack software engineer for IoT platforms, while Pagel had extensive research experience working on wireless sensor networks.
“What we saw is that it’s really hard [to] retrofit an existing building and make it easy enough to adopt new solutions and start saving money, becoming more productive, energy-efficient, and sustainable,” Ranganathan told KrASIA. The two biggest challenges, he explained, were upfront costs and the difficulty of retrofitting, or adding a new solution to an existing system.
To tackle the first obstacle, the two, who specialized in software and hardware respectively, built the technology in-house. “By doing that completely in-house, we were able to bring down the cost significantly,” Ranganathan said.
“We noticed that the second key obstacle to making things easily retrofittable is the wireless network itself,” Ranganathan noted. Many wireless networks still require a main power cable to power the sensors, and property owners would have to tear open walls just to install these solutions. However, SensorFlow’s network stack, powered by batteries, makes it easier to install their wire-free solutions to any new or existing systems.
SensorFlow’s products utilize wireless sensors to monitor and collect data on environmental changes in each room. Using AI-driven technology, the data is then sent to a system connected to the air-conditioning units or fan coil devices, which will adjust the temperature of the room.
SensorFlow found that hotels, their current target group, are likely to benefit the most from these solutions. Hotels suffer from energy inefficiency, Ranganathan said, due to guest behavior. “People are away from their rooms most of the time, and rooms are about 70% to 80% of your floor area, meaning that most of your building is actually not optimized.”
Furthermore, the ease of retrofitting provided by SensorFlow’s products is important for hotels, since they cannot afford to close down just to accommodate the new installation.
The process is simple: SensorFlow installs two sensors, an occupancy sensor, which detects whether people are present in the room, and a smart thermostat, which automates the air-conditioning system, measures temperature and humidity while collecting data about the air-conditioning system’s performance. The firm claims that the installation process takes only five minutes and helps hotels save up to 30% in energy expenses.
Helping the hotel industry stay afloat amidst COVID-19
The importance of energy-saving for hotels has become even more apparent during COVID-19. Travel restrictions have dealt a large blow to the hospitality industry, with hotels now plagued by high vacancy rates and a need to streamline processes just to survive. Hotels in the Asia-Pacific region experienced a drop in occupancy rates of up to 35%, according to global consulting firm HVS. In the region, 63.4 million jobs from the travel and tourism industry have been lost due to COVID-19.
Hotels have no choice but to adapt. “There have been a lot of trends around contactless [services] becoming more important. You have to [deliver a personalized experience] through contactless mechanisms,” Ranganathan described. “You are also looking at a different environment, where you can’t really project the revenue any more with certainty, so you start looking at, how do I reduce my operational expenses for running the hotel at a particular occupancy rate?”
SensorFlow’s competitors include companies like US-based industrial automation solution provider Honeywell, and Schneider Electric, which delivers IoT-enabled products. However, SensorFlow differentiates itself through its tight vertical integration and the ease of installation of its products, according to Ranganathan.
“This is what we are currently focused on,” Ranganathan shared. “What are the other products we can build for those working [at the forefront], like guest services, maintenance team, and housekeeping teams? How can they use the data we have to improve their productivity?”
Ranganathan acknowledged that 2020 has been a “very challenging” year. “Our customers are going through a bad time, which means we are going through a bad time.”
Adapting itself to the hard times, the firm has adjusted its contract mechanism to make it more “friendly” for hotels. Instead of a fixed price for installation and implementation of the platform, SensorFlow has switched to a “shared savings model”, in which it gets a monthly commission out of the amount of savings in electricity bills the hotel obtained by using the firm’s services.
“This means that hotels don’t need to worry about occupancy rates going up and down. They never pay out of pocket,” said Ranganathan, adding that this remuneration model also sets SensorFlow apart from competitors. They expect this model to increase both retention rates among existing clients and future demand for their solutions.
Smart buildings of the future
SensorFlow has seen a growing interest from existing clients as well as new customers during the COVID-19 period. “Everybody knows that they need to save costs wherever they can. Not just for staying alive, but also, when you come out of COVID-19, you want to be in a position where you have minimal operational expenses to make up for the losses that you had,” Ranganathan said.
SensorFlow intends to eventually extend its products to other verticals, such as offices, schools, and industrial buildings by 2023. However, they are “doubling down” on the hospitality industry for now, as Ranganathan said it is already familiar with its pain points and is well-positioned to help hotels come out of COVID-19 stronger.
As of now, the startup is also expanding into other markets such as the United Kingdom, Germany, the Netherlands, Denmark, and France, starting with the capital cities before branching out. It plans to have the first few properties in Europe equipped with a heating version of its HVAC solution by the first quarter of 2021.
Reducing the cost of utilization is what makes a building smarter, Ranganathan emphasized. “Everything that we build internally, we always ask ourselves if it actually helps lower costs or improves the occupant experience.” At its core, the firm wants to help buildings utilize their resources—which comprise labor, mechanical infrastructure, and occupants—in the most optimal way.
This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in South and Southeast Asia.