- Consumers are demanding better devices and appliances in the home as the "smart home" trend continues. They want to know they're making the best decisions, for the environment and their own pocketbook, and connected devices are giving them increased control. The popularity of Nest and Ring products (which were acquired for $3 and $1 billion each) are a testament to the power of the new consumer.
- There are few pure-play public market plays, but one of the hotter IPOs of 2018 was the popular Chinese device-maker Viomi Technology (VIOT). The company's shares have returned almost 40% since the IPO as investors have recognized the growth and potential for smart-home products of all kinds.
- Another newer company gaining sales traction to the tune of +160% is Trutankless (TKLS). The company is at the intersection of a few trends, including the smart home and the all-electric home that's now about 25% of the U.S. housing market. Their smart, electric tankless water heaters have been featured by industry publications including Consumer Reports, and they increased their number of wholesale distributors in 2018 by almost 7x.
- Over 8 million water heaters are installed each year in the U.S., and with what appears to be a superior product offering, TKLS' 160% growth could just be getting started.
NEW YORK, NY / ACCESSWIRE / March 25, 2019 / One of the hottest IPOs of 2018 operates in one of the least sexy industries - appliances. But their growing sales also reflect one of the top trends of the coming years: consumers demanding smart, connected technologies in the home.
Viomi Technology (VIOT) is a China-based maker of internet-connected home appliances, including smart refrigerators, ovens, dishwashers, robot vacuums, speakers and security devices. The ubiquitous Chinese consumer electronics maker Xiaomi is not only a major shareholder but also their biggest customer; Xiaomi basically acts as their primary distributor.
VIOT went public on the NASDAQ 6 months ago at $9.00, and since then the shares have rallied higher by about 40%. The company's revenue nearly tripled in 2018 compared to 2017 - 193% growth.
This whole industry is taking off as consumers demand more from modern technology. Increased efficiency and knowing how their energy is being used are top of mind, creating a new breed of consumer ready to spend on high-end technology.
The Smart Home Is Big Business
The smart home doesn't sound all that sexy, but M&A in this new industry suggests that the smart money knows where consumers are headed.
Amazon (AMZN) bought the doorbell-maker Ring for around $1 billion in 2018.
Google (GOOGL) paid $3.2 billion in 2014 to buy the thermostat and security cam company Nest.
Nokia bought Withing SA, which makes IoT health devices, for $191 million in 2016.
Markets and Markets expect the overall smart home market to grow from USD $76.6 billion in 2018 to USD $151.4 billion by 2024.  This is likely the beginning of a long-lasting trend.
Another Up-And-Comer With 160% Revenue Growth
Now another new company is making waves with a technology that hadn't seen much uptake ten or twenty years ago, but could be on the verge of a major explosion in demand.
Trutankless Inc (TKLS) is poised to fill a gap with their smart, connected tankless electric water heaters. The company has had impressive traction with installers and suppliers this year, leading to 167% year-over-year sales growth in the last quarter reported. Sales in Q3 of 2018 were $0.351 million, compared to $0.131 million in Q3 of 2017. Their $1.13 million in sales during the first nine months of 2018 were 190% higher than during the first nine months of 2017!
Trutankless is combining a few compelling trends: the smart home and a move towards an all-electric future in the U.S., especially as solar power comes to the average American. According to data from the U.S. Energy Information Administration in 2015, electricity is the primary water heating fuel for 54% of Americans, from 46% in 2009.  One in four homes is already all-electric, especially in the south and southwest.  That's only likely to increase as renewables generate more of the US' energy needs.
Trutankless believe their offering is superior to older water heating technologies, and independent accolades suggest they may be right. They had "Best Home Technology Product" at the 2014 International Builders Show, and four consecutive "Best of Houzz" nods for client satisfaction. Consumer Reports included Trutankless' TR Series water heater in their Top 5 Remodeling Trends for 2016 report , and in a comparison of gas, storage, and Trutankless' water heaters the publication highlighted the payback time for electric on-demand products. 
In 2018, over 8.5 million storage-type water heaters were shipped/installed in the U.S. according to The Air-Conditioning, Heating, and Refrigeration Institute (AHRI).  The company expanded their national active wholesaler footprint from 165 locations at the start of 2018 to over 1,000 wholesaler locations by year end, or almost 7X. They now have national homebuilder relationships, including Lennar Homes (Florida), DR Horton, Shea Homes, and the NAHB's 2019 Custom Builder of the Year, Cullum Homes. Combined this has significantly increased their sales channel, which bore fruit at the end of 2018 and could continue to in 2019.
The Path To Becoming A Giant?
Who are the giants in the gas tankless space? Today it's companies like Rinnai Corp. (RINIF)(JP:5947), which dominates with natural gas on-demand heaters and has grown to a market value of US$3.5 billion. But they weren't always that size, and Trutankless is making electric tankless compelling for many homeowners, especially the millions of homes that rely on electricity alone for their energy needs.
They appear to be capitalizing early on the move towards the smart home with a quality electric tankless product. Early mover advantage can be key as we see in so many industries, like for marijuana companies recently getting into hemp. The 2018 Farm Bill Trump signed last year allows for hemp cultivation, and the CBD extract falls into a bit of a grey area. Canopy Growth Corp (CGC) is already planning industrial hemp farms, and Curaleaf Holdings (CURLF) announced that its CBD products will soon be in CVS (CVS) stores in a few states - these quick movers are making headlines as a result.
They all start somewhere, and with demographic trends lining up TKLS' recent sales blitz may just be getting started.
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