Founder and CEO Sridhar Deivasigamani was a first mover in electric water heaters for the commercial market. Now his company is leading the way for the broader market.
An appliance failure in 2005 spurred Deivasigamani to found Intellihot.
“It started with an accident,” says Deivasigamani. “Our water heater broke and flooded my house. I wanted to build something that was more energy-efficient, with less resources and, obviously, a much better product.”
He spent two years tinkering on a tankless heater while working full-time for Caterpillar, then left to start Intellihot focused on the commercial and industrial markets. Once the first product was certified, the Intellihot factory commenced operations in 2011. “We only sold maybe 50, 100 units that year, but we have grown to be a much larger company,” says Deivasigamani.
Intellihot’s heaters now range from 200,000 to 3 million BTU. The catalog includes gas and electric products, including the Electron series of tankless heat pump systems with integrated thermal batteries.
Energy Efficiency and Reliability
“They all carry the same fundamental characteristics,” notes Deivasigamani. “All of our products are designed to be energy-efficient. They also produce good, clean, healthy water, and they’re also very reliable. The customers we serve depend on hot water to open their doors, and if they don’t have hot water, they start to lose hundreds of thousands of dollars.”
The market includes manufacturers, stadiums, hospitals, hotels, restaurants, and multifamily developments, “everywhere other than single-family homes,” says Deivasigamani.
Intellihot’s deionized water heaters are favored by food and beverage manufacturers, as well as manufacturers in the automotive, aerospace, and electronics industries. Customers include Culligan and SpaceX.
One customer, an egg-processing facility in Kentucky, replaced its residential-grade system comprised of nine tankless heaters with four of Intellihot’s commercial-grade units. The residential units would often fail to get hot enough so eggs were scrapped, and often broke down after just a year or two. Intellihot’s heaters solved both problems.
Vertical Integration for Success
Operating out of a company-owned 100,000-square-foot facility on 10 acres, the company “is very vertically integrated,” says Deivasigamani. “The product is built from there and shipped out to the U.S., Canada, and down to Mexico and even Puerto Rico.”
About 80 of the company’s 150 employees work in manufacturing. “Our production facility looks like a Tesla factory,” says Deivasigamani. “It doesn’t look like a crummy boiler factory with rust and grease all over the floor.”
Annual growth has exceeded 100 percent in recent years, and typically tops 40 percent. “For us, a normal year — even during the recession and now — is between 40 and 70 percent,” says Deivasigamani. “Typically, the water heating industry will grow maybe 6 percent.”
Challenges: Hiring. “Our biggest challenge probably is getting more people to come in and join us,” says Deivasigamani. “We are in a big recruiting phase. We are looking for high-performing, very talented people who can come and join the company.”
He adds, “Our challenge is mostly going to be expanding and supporting the growth.”
Opportunities: Deivasigamani says he sees strong demand with the push to decarbonize and electrify the U.S. economy, noting that in many cases, it’s simply good business.
“Anything that helps people operate a business more efficiently with lower risk, people gravitate to,” he explains. “Our products offer them that. They also lower their capex, their opex, and give them a more reliable way to operate their business. What we also bring to the table is a substantial reduction in greenhouse gases.”
Intellihot’s products have decreased greenhouse gas emissions by the same amount as “all the cars in Chicago,” he adds. “This whole decarbonization movement that’s happening, we were at the forefront of it.”
Needs: Employees in sales, marketing, and engineering in both Galesburg and at a Chicago-area office. “Pretty much every facet of the company has to grow,” says Deivasigamani.
He also says overseas demand for Intellihot’s tankless heat pump water heater could soon lead to the need for a second production facility in Europe or elsewhere.
