Crowdfunding / Funding / Hardware / Investing

With $400K from Ben Franklin, Kapsul gets to work on ‘smart’ air conditioner

Philly's biggest Indiegogo campaign just got some additional funding as it continues work on its first product, which has faced significant delays.

The Kapsul team at Techstars Demo Day in Boston. (Courtesy photo)

Kapsul Air, the Center City company behind Philly’s biggest biggest Indiegogo campaign — a whopping $2.3 million in 2016 for preorders of its smart air conditioner — says that after eight re-designs, they should start shipping the sleek product in the summer.

Of 2019.

Cofounder and CEO Kurt Swanson will be the first to tell you about the wide-ranging effort of research and development that has gone into Noria, an mobile-app-operated window unit that promises to be twice as quiet as regular air conditioners. Originally due for the summer of 2017, the company today says it underestimated the project’s engineering challenges.

“It took a huge a mount of iteration but the entire supply chain is now in place,” Swanson said. “I’m pleased to say we’re ready to manufacture today and we’re testing sample units right now.”

The company, which currently employs a team of seven out of its Center City offices, just announced some additional funding to the tune of $400,000 from Ben Franklin Technology Partners. The funds helped the company work on go-to-market strategy and bring aboard a community manager to communicate with the company’s backers.

(Don’t look for Kapsul in the latest round up of BFTP’s investments: This deal was stealthily mentioned in the investment group’s Q2 roundup, where Kapsul was listed as Premium Home Comfort, Inc.)

Kapsul Air COO Chris Myers, a startup veteran, early adviser to the company and backer of the company’s campaign said the lack of transparency some backers expressed had to do with limited hands on deck as the company focused on engineering. But now, transparency is a priority.

“Today, we issued our formal apology to backer community saying we were delayed,” said Myers. “We underestimated our engineering challenges. We’ve also just communicated that we’ll be the first company to give equity to our backers to be our first investors.”

So far, despite delays in production, Myers said 97 percent of the company’s 5,000-plus backers have stayed on, even though the company arranged a “backer swap” aimed at giving its backers an exit opportunity.

Swanson said the long lead times for the customization of the A/C’s components and the necessary testing and quality assurance pushed back the scaled production of the units to Q3 or Q4 of 2018 but, being very clear that winter time is not the ideal time to be selling air conditioners, Summer 2019 makes the most sense.

Beyond the long-awaited air conditioner, the company is also looking into other products in the climate control realm, like de-humidifiers.

“We’re going to address all of the problems with these climate products,” Swanson said. “This is just the first step.”


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