TORONTO — Montreal-based BrainBox AI will keep its R&D hub in the city following its acquisition by HVAC giant Trane Technologies, says Sam Ramadori, the startup’s CEO. The deal, which was announced in mid-December and closed Thursday, will also help get the firm’s energy efficiency systems into many more buildings around the world.

While neither firm is disclosing the acquisition price, Ramadori said all of BrainBox’s investors will make money on the deal. BrainBox will also keep its roughly 190 employees together, he added.

Founded in June 2019, BrainBox developed AI tools that property managers use to optimize heating, ventilation and air conditioning systems (HVAC), promising to save energy and reduce carbon emissions. 

The startup claims to have 14,000 commercial buildings on its technology, including customers like Sleep Country and Brisbane Airport. Last March, BrainBox launched a virtual assistant based on generative models that monitors and predicts property issues, and allows users to control their sites via text and voice commands.

Before the acquisition, the startup had raised about US$82.4 million, according to PitchBook data. Backers included Desjardins Capital and Investissement Québec, as well as federal government agencies Export Development Canada and Sustainable Development Technology Canada. BrainBox was in the process of raising another round when Dublin-headquartered Trane proposed acquiring the startup, Ramadori said.

The two firms have been working together for three years, with Trane already selling a version of the BrainBox technology under its own brand. But Ramadori said existing BrainBox customers will be able to keep using its products, whether or not they’re using Trane’s HVAC systems, and that his team will keep working with other equipment providers.

Venture investing in cleantech dropped last year, although AI firms had a blockbuster 2024. Ramadori has previously told The Logic that Canadian building operators have been more reluctant to buy BrainBox’s products than those in other countries, continuing the country’s longstanding trend of slow technology adoption.  

On Thursday, Ramadori said the firm did not decide to sell to Irish-American Trane because of fundraising challenges or slowing revenue growth.

The BrainBox team will now target Trane’s client base of 40,000 buildings, and use its new owner’s resources to expand internationally. “It’s just a way to go from the thousands of buildings today that we are integrated into, to many hundreds of thousands or millions,” said Ramadori. 

The energy needs of buildings accounted for 27 per cent of global emissions in 2022, and the real estate sector’s climate impact is growing rather than shrinking, according to the United Nations Environment Programme. 

“The built environment is not moving anywhere near fast enough,” said Ramadori, noting that real estate is greening slower than other major emitters like energy generation or auto sales. The BrainBox team’s desire to have an impact on the climate challenge was “an important motivator” for the deal, he said.

Foreign buyers have acquired several notable Canadian cleantech startups in recent years, including ones backed by government programs. Some AI startups have also sold to U.S. tech firms or relocated across the border for investors. Those moves have rekindled concerns in the innovation economy that Canada is once again losing promising firms. 

Federal and provincial policymakers have in the past lauded BrainBox as an example of Canada’s climate and AI innovation. Ramadori acknowledged concerns about the loss of homegrown firms departing, but emphasized that BrainBox isn’t leaving Montreal. “We don’t have enough scalable AI companies developed and grown in Canada,” he said, calling for governments to keep supporting the ecosystem.