Energy price volatility and uncertainty are making many manufacturers hesitate before replacing their heating systems. Marco Turchini of Algebris Climatech sees that uncertainty as the very reason to act now. Most industrial process heat, including steam, is still produced by burning gas, oil or coal, and in July the European Commission set out a plan to change that. Turchini, an industrial engineer turned investor, argues that delaying can be costly and explains why Algebris chose to back Upheat.
Less exposure to fossil fuel prices
For a manufacturer whose steam and process heat system is already paid off, it is tempting to wait. Holding off another year to see where energy prices go can feel like the safe choice.
Turchini would advise otherwise. “I would talk about the real uncertainty on the horizon. Energy prices are unpredictable. Relying less on fossil fuels for such an important part of production can be a winning move.”
A new heat system is a long-term investment, and the energy prices a company expects today will affect its costs for years. Unlike a boiler, a heat pump delivers more heat than the electricity it consumes, because much of that heat is drawn from its surroundings. In a factory, that is usually waste heat that is currently released into the air. By recovering waste heat and using electricity efficiently, heat pumps can reduce exposure to fossil fuel costs. The business case depends on electricity and gas prices, operating hours and site conditions.
For Turchini, this kind of innovation is also about safety, sustainability, and operational and supply predictability.
European policy points the same way. The European Commission’s Electrification Action Plan aims to move Europe from burning fossil fuels to running on electricity. One of its policy objectives is that by 2030, electricity prices for industry should stay below twice the price of gas. According to the Commission, electrification is already feasible for 60% of the industrial energy demand that currently relies on fuels. The plan names heat pumps as one of the main ways to do it.
Public funding is available in many countries to support the switch, Turchini adds. “Now is a good moment. Going electric can bring a greater sense of stability, especially in supply, and reduce exposure to fossil fuel price swings.”
Marco Turchini: engineer meets investor
Turchini came to venture capital through engineering. He holds an MSc in industrial engineering and management and a PhD in supply chain management, and has more than 15 years of experience in innovation across consulting, entrepreneurship and corporate management. At A2A, a large Italian energy company, he was Chief Innovation Officer and CEO of A2A Smart City.
He has also been a senior advisor to a European cleantech venture capital firm. In 2021, he joined Algebris to support its Green Strategy from a technology standpoint. He is now Managing Partner of Algebris Climatech.
He sees a gap in the European venture market. “Many venture capital investors in Europe come from a purely financial background, such as private equity, asset management or investment banking. That doesn’t fully match the needs of technology entrepreneurs.”
A technical background within the team helps Algebris see the two or three things that really make a technology different from its competitors. In his experience, it also helps win over founders.
“In Upheat’s case, it probably helped the team want us as investors. They felt they could speak a bit of their own technical language with us, more than with others.”
Why Upheat: a mature team among early-stage ideas
Upheat, based in Tampere, makes oil-free heat pumps that turn a factory’s own waste heat into process heat, including hot water and steam, at 100–200 °C, a range heat pumps have long struggled to reach. Algebris had been following industry’s move to electricity and had looked at many heat pump ventures designed to target industrial use before meeting the company.
“We found a lot of very early-stage ideas, a lot of change-the-world concepts and many scaled-down versions of existing machines. We were not convinced at all until we met the Upheat team. They clearly understood the problems of their own customers and were among the few already talking to customers about their specific issues.”
Turchini also points to the founders’ experience. They had previously brought new technology to industrial compressed air and chillers, and their personal backgrounds showed they could overcome difficulties.
“Many of the founders we meet are at the very beginning of their business journey. The Upheat team brought maturity and highly relevant experience.”
Algebris spent many months alongside the company before investing.
“We had the chance to see the team at work and delivering on its promises. That was really convincing for us.”
Established parts, unique combination
According to Turchini, each of Upheat’s components is established technology on its own. What makes Upheat stand out is how cleverly it has combined them.
“We loved how smartly the solution was designed. The combination of technologies solves long-standing problems and brings real benefits to the customer.”
What impressed Turchini most was the use of magnetic bearings, which remove contact friction and the need for oil. Oil-lubricated machines need regular maintenance stops and wear parts. The oil-free design can help the machine run more efficiently and reduce its maintenance needs, as there is no oil system to service and fewer parts that wear.
“That is probably the best way to describe what makes the technology unique,” he says.
Turchini is confident about where Upheat is heading.
“We see a strong combination of efficiency, operational simplicity and customer value in the applications Upheat is targeting.”
About Algebris Climatech
Algebris Investments is an independent global asset manager, founded by Davide Serra in 2006. On the private investments side, it supports the transition to a greener and more sustainable economy. Algebris Climatech, launched in January 2025, is its first venture capital strategy and invests in climate and deep tech startups in the energy, materials, industrials, and food sectors. It is part of Algebris’ green transition unit based in Milan.
