Boston-based startup raises $8M to give water heaters a brain: 'Everyone is chasing AI, but we see giant opportunities in overlooked places'

Your water heater uses nearly a quarter of your home's energy, according to the U.S. Energy Information Administration — and definitely more than that if you like taking long showers. 

All that energy translates into higher bills, which is why Boston-based startup Reservoir just raised $8 million with plans to turn water tanks into smarter, cheaper, and safer home appliances.

The company's broader pitch is simple: Lower utility bills for homeowners while helping prevent leaks and other costly home repairs — all while promoting renewable energy usage around the country.

What's the full story?

Reservoir launched in 2024 and started installing its predictive, aka "smart," heat pump water heaters in late 2025. So far, the company has installed systems in nearly 100 homes around the Boston metro area.

This seed funding (announced in early August) will be used to accelerate growth in Boston and expand into more cities around the country. The $8 million round was led by Asymmetric Capital Partners, with backing from Founder Collective and MCJ.

Why does this matter?

Hot water is a huge household energy drain, and any way to reduce that usage (while still ensuring hot water when you need it) is crucial for lowering bills and helping decrease pollution.

Reservoir's technology takes a traditional water heater with an on-off switch and basically gives it a "brain." It uses predictive technology to heat water ahead of demand, as well as figuring out when solar output is highest and/or the grid rates are lowest so it can boost water heating during those times. Then it stores that ultra-hot water in the tank like a giant AA battery, ready for usage whenever you need it. 

The startup also says its water heater doubles as a safety system by guarding against problems like leaks, frozen pipes, fumes, and bacteria. To that end, Reservoir reports that homeowners can save up to $800 a year on energy bills compared with conventional tanks, which is especially relevant in an area of the home linked to 24% of insurance claims for unexpected water damage.

Reservoir's systems are pricier than conventional water heaters, but the company says once installation and rebates are factored in, the pricing is comparable. For example, many Massachusetts households can get more than $1,050 in rebates, along with 0% financing through state and regional programs.

Luke Winston-Almanzar, Reservoir's co-founder and CEO, stated that the company "can offer more affordable pricing than traditional water heaters because we design, build, and install them ourselves."

Bigger picture thoughts

Reservoir said the fresh capital will help expand not just the product itself but also the installer base behind it. The company points to a plumbing labor shortage, saying only two new trade workers enter the field for every five who retire (the average master plumber is nearly 60 years old).

As a response, Reservoir said it's trying to make the trade more appealing to younger workers by training apprentices on connected plumbing systems, pairing that with newer software and hardware tools, and offering meaningful hands-on experience earlier.

The company also reports that its water heaters can play a broader energy role, because they can bank heat during periods of cheap electricity or strong renewable output and supply hot water later. If deployed widely, Reservoir said the roughly 120 million water heaters in U.S. homes could collectively act like a 6-billion-gallon thermal battery.

"Everyone is chasing AI, but we see giant opportunities in overlooked places like plumbing and home services," said Asymmetric Capital Partners managing partner Rob Biederman about the funding round. "Reservoir is meeting people's everyday needs with robust technology and great service. We are thrilled to help the team expand in Boston and across the country." 

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