Saving electricity: How Ukrainian start-up i3 Engineering branches out in Ukraine, Lithuania, Poland, Slovakia, the Netherlands, etc. during the war
And how it can help the state to spend electricity “wisely”
On November 1–4, the largest IT conference Web Summit took place in Lisbon, where 24 Ukrainian start-ups represented their country. Among 100 applications, i3 Engineering, which produces controllers for home automation, was selected to participate in the summit.
What challenges does the company overcome during the full-scale war? How can its automation systems help in overcoming the difficult winter? And what exactly will help save 30–50% of electricity? Pavlo Tsiupka, co-founder of i3 Engineering, dwells on these and many other interesting issues.
Earlier, Mind reported about another Ukrainian participant of the Web Summit – Releaf Paper, which produces eco-paper from fallen leaves
On the product and the team
i3 Engineering develops and manufactures home automation controllers that are configured from a mobile application. The development allows a person to combine ordinary electrical devices that are in the house into one ecosystem. One can control the smart home not only with the help of the app, but also with Alexa or Google Assistant voice assistants, as well as with ordinary switches.
The history of the company began in 2018 in one of the basements in Lviv, where the co-founder of the start-up Pavlo Tsiupka and his partner thought over the architecture of the devices. Now the team has its own “smart office” and several departments that provide a fully integrated production of devices in Ukraine: hardware development, low-level software development, backend development, mobile application development, quality assurance, marketing and sales.
On how the system operates
Devices are connected in a peer-to-peer network, which allows any of them to track what is happening on other devices connected to the ecosystem. In the app, the user or integrator creates an automation rule to be sent to the device.
The device processes the rule and sends a command to be executed. For example, if you turn on the switch – two lamps will turn off, if you double-click on the switch – the air temperature will rise by 1 degree Celsius, if you press it for a long time – the curtains will close
On the establishment of production
The devices are manufactured in Ukraine. Pavlo Tsiupka recalls that at the beginning they found five companies, ordered test samples, and looked at the results: quality, speed and price. They visited the factories and were surprised that Ukrainian enterprises were quite ready for mass production.
Now the company has three contractors in Ukraine, where the boards are manufactured. The body of the devices is produced in Chernigiv. And the start-up team focuses on assembling and testing devices.
On challenges in the course of the war
In the first months of war, several of the company's supplier factories suffered from russian missile strikes. The start-up began looking for additional production in neighbouring countries where the devices could be manufactured. Preliminarily, the businessmen found such production in Poland, signed a contract, but they have not been producing there yet: Ukrainian capacities are enough for now.
The war also slowed down the scaling of the company. “Everything had been going well before the full-scale war started. We thought we would use the earned money to move outside and become self-sufficient, but the war made its adjustments. We realised that a smart home is not the first need for Ukrainians. Therefore, the company directed the sales and the marketing department towards the European market,” recounts Mr. Tsiupka.
He adds that now the main direction of development is to enter the international market, and this requires funds, first of all, to produce a line of devices. The company is going to increase the production of devices to 200 items per month; now its own funds are enough for only 50 controllers per month.
On new markets
In December 2021, the company started pre-sales in the Ukrainian market. The interviewee says that i3 Engineering planned to appear in Europe gradually: first to enter Poland and Slovakia. However, due to the full-scale war, the plans had to be adjusted.
“We went where our product was expected – to Lithuania, Georgia, Kazakhstan. Then we began to promote sales through scouting. The marketing department conducted interviews with potential customers and as a result, several customers wanted to buy the product. Roughly speaking, out of 20 people we approached, two bought – this is a good conversion,” adds Mr. Tsiupka.
Now the company has 70 partners in eight countries: Ukraine, Lithuania, Poland, Slovakia, the Netherlands, Kazakhstan, Georgia, and Egypt.
On solutions for public institutions
Now Ukraine has to turn off all the lights in emergency mode in order to save electricity. Street lighting works according to the time relays, so the light turns on at a certain hour. And if something needs to be reconfigured, workers go and make changes in person.
Pavlo Tsiupka says that the company can offer to link the lighting system to the sun, so that the light is on exactly when it is needed – without manual adjustment. “We can also provide remote switching the light off and on as needed, when repairs are underway, or when the city needs additional intervention. This can be done with one click in our app,” he adds.
Another solution for energy saving is combined lighting of cities. In the evening, when there is traffic, the lights can shine at 100%, and at midnight the brightness may drop to 10%. The system can also perform dispatching: detect when there is a damaged lantern on the line and immediately signal it to the responsible person.
Pavlo Tsiupka reveals that the system can control the level of lighting and heating in schools, kindergartens, hospitals, and other public institutions. The combination of lighting with motion detectors will help save 50-60% of electricity when the corridors are empty. The system can also work with different types of heating, automatically turning it on to heat the school when needed.
In Ukraine, the company wants to join the reconstruction of social housing: the controller will make it more energy efficient. In a standard three-room apartment, a temperature increase of 1 degree is about a 9% increase in expenses. Therefore, you can automatically turn off the heating in rooms you do not live in or turn it on for an hour or two when you need them,” says Mr. Tsiupka. According to him, the company already has a department that searches for partners in this direction.
On monetisation
The company's business model is B2B sales of controllers through a network of dealers and partners: electricians and integrators. Now more than 40 objects in Ukraine have been provided with such equipment. As a rule, this is the private sector – houses and apartments.
However, there are also small businesses: restaurants, greenhouses, business centres. The system is also suitable for hotels. In the future, the company is considering a SaaS model. For example, connecting four cameras for free, and a larger number – by subscription. Or analytics for a week is free of charge, and if you need data for a month or a year, this function will be available for an additional fee.
On competitors
Now i3 Engineering’s competitors are wireless gadgets, such as Xiaomi, Legrand, Fibaro, Sonos, Philips Hue, as well as a variety of controlled sockets, motors for roller blinds, wireless sensors, and smart lamps. “People wrongly believe that interaction of numerous devices can be built on the basis of wireless devices. The main drawback is that batteries in such devices need to be changed, they work unstably. There are as many brands as are devices: you may need 15-20 applications to control everything in the house. If you need to make only one controlled lamp, a wireless device is what you need. But proper automation can only be built only on wired systems,” states Mr. Tsiupka.
The company also competes with other wired systems manufacturers that produce controllers – Loxone, Crestron, Grenton. There is a technical standard for wired home automation and KNX building automation. Nowadays more than 400 manufacturers all over the world manufacture products of this system: controllers, switches, sensors, cables. “All these systems are highly complex and expensive to install. You need to be a highly qualified engineer and have a lot of time to change something. All this complicates the work with the system and increases its cost,” says the speaker.
Pavlo Tsiupka explains that the i3 Engineering system is adjusted using a mobile application. After a few hours of training any electrician will be able to set up the correct operation of the system. If something needs to be reconfigured, the client can do it himself
On investment
The development of the product started in 2018. Pavlo wrote an article about the future of smart devices and posted it on a forum. Private investors read the article and offered to invest money. In total, more than $1 million was invested in the company.
Now the company is looking for more $1.5 million to produce devices and support the team. Moreover, money is needed to participate in European thematic exhibitions and attract partners – this will enable them to enlarge the presence of the product in other markets.
On intermediate achievements
i3 Engineering controllers received the WORLD SMART HOME AWARD 2022. The company was rewarded in the “Home control / Building control/BUS systems” category. The start-up is also among the 5 finalists of the IoT Innovation World Cup in the SMART BUILDING SMART CONSTRUCTION INNOVATORS 2022 category. The company was shortlisted at the European start-up competition, The Europas Awards 2022, in the PropTech category.
“In addition, thanks to the support of the Ukrainian Start-up Fund, we presented our solution for the first time in Scandinavia at the TechBBQ exhibition in Copenhagen, as well as went to the Web Summit and are going to Slush in Finland,” sums up Mr. Tsiupka.
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