Industry pioneers begin with a strong vision long before their disruptive idea materializes and gains traction – that’s the case for Toronto-based Diverso Energy.
Early purveyors of the Energy-as-a-Service (EaaS) model a decade ago, Diverso is redefining how geothermal energy is delivered to multi-residential buildings. By eliminating upfront capital costs and guaranteeing long-term system success for today’s developers, Diverso makes sustainable heating and cooling as easy as connecting to a utility.
It’s a simple concept, but years of detailed research, meticulous strategic planning, and seasoned expertise are integral to its execution – all driven by a dream-team collaboration that set the stage for a profound industry shift. As the company celebrates its 10th anniversary, Diverso Energy has grown from an industry pioneer to a leader in geothermal solutions, helping developers transition from traditional gas-based HVAC systems.
A Forward-Thinking Vision
Back in the early 2000s, when software as a service (SaaS) began changing how businesses access technology solutions, Tim Weber, Diverso’s co-founder and CEO, wondered if the model could be leveraged to replace traditional HVAC systems with geothermal systems in multi-unit residential buildings. His epiphany set him on a mission to create a building-agnostic and environmentally sustainable “fit-for-all” solution to heating and cooling.
Drawing on a decade of research and collaboration with engineers, contractors, and building owners across Ontario and the northwestern U.S., Weber set to work building a geothermal utility offering that could compete with traditional natural gas heating and cooling solutions. A few developers showed interest in the fixed-cost, low-carbon approach, but there were roadblocks – financial hurdles and operational risks posed major barriers to adoption.
Weber remained undaunted. “I knew the vision presented an unbelievable market opportunity; all that was missing was the business model,” says Weber.
A Uniquely Collaborative Model
Weber realized his passion and geothermal expertise alone weren’t enough to make his business market-ready. Turning vision into reality required the convergence of three distinct expertise areas: industry insight, engineering excellence, and financial innovation. Weber first turned to Sergio Almeida – Diverso Energy’s co-founder and CTO – a mechanical engineer and leading design innovator in multi-residential geothermal systems.
“I knew him and his reputation in the industry as probably the most experienced and respected geothermal engineer in North America,” says Weber. “He owned his own engineering firm so had the expertise to design, execute, manage and understand the technical nuances of geothermal in large buildings." Almeida’s company, Geo-Xergy Systems, became Diverso’s engineering arm, providing technical excellence in designing, engineering, constructing, and managing geothermal energy systems for multi-unit residential buildings.
The final piece fell into place when Weber engaged Jon Mesquita, Diverso’s co-founder and COO, a veteran in the Waterloo, Ontario tech scene. Mesquita brought extensive SaaS experience, strong business acumen, and a deep understanding of financial and legal structuring. His operational experience and financial acuity were game-changers, and his knack for seeing projects from a developer’s perspective made the model appealing to pioneering builders.
“When Tim approached me, I’d spent years building and scaling subscription-based businesses. The SaaS model succeeds when companies can’t find the expertise in-house, don’t want to sink capital into owning technology, and need a long-term, predictable solution,” says Mesquita. “I saw a lot of similarities in the challenge real estate developers faced – they knew geoexchange systems could save money and eliminate reliance on natural gas, but they weren’t equipped to design, finance, or maintain these systems. What they needed wasn’t a contractor – they needed a utility.”
Mesquita highlights the difference between the geothermal solution and traditional mechanical equipment, which requires regular annual maintenance and has a lifespan of 20 to 25 years. “Geothermal is more akin to the human body, where properly managing and maintaining a number of vital systems that serve the whole can ultimately lead to robust health and a long lifespan,” he explains. “Choosing the right partner to design, construct and operate the geothermal infrastructure means the system can last centuries, serving tenant needs over the entire lifespan of a building.”
From left: Sergio Almeida, Tim Weber, and Jon Mesquita, Diverso Energy/ Jon Mesquita/LinkedIn
Early Adopters
Like any disruptive technology, the EaaS model faced challenges in its early days. “Some Toronto real estate developers were resistant to change,” says Weber. But stricter new building standards signaled an industry-wide shift towards low-intensive solutions. “Business as usual status was no longer an option; the standard approach to designing mechanical systems using a gas boiler and cooling tower wasn’t good enough anymore,” he says. “The industry needed something different, and we had a ready zero-cost solution.”
Armed with Almeida’s extensive engineering expertise and Mesquita’s financial and legal acumen, Weber reached out to a handful of forward-thinking GTA developers – Camrost, Collecdev Markee, Windmill, and Branthaven Homes – with a novel plan for integrating geothermal energy into new residential developments.
“When we were approached by the team at Diverso, we heard how efficient the building would be with a geothermal system versus the conventional HVAC solution,” says Sean Wadsworth, Vice President, Homebuilder Operations, Branthaven Homes. “Our purchasers were looking for a premium product that let them cool or heat their individual units any time of the year and that was one of the first benefits we saw with the geothermal solution. The next questions were, ‘how much does it cost?’ and ‘how much more difficult will it be for us to build?’"
Wadsworth says he soon realized the risk and cost would be virtually non-existent. “With Diverso’s mechanical engineering expertise, we quickly figured out that it wasn’t that much more complicated or costly to build versus a traditional 4-pipe fan coil system," he says. "In fact, it gives our employees and purchasers something to feel good about, knowing they are on the leading edge of sustainability.”
A Game-Changing Investment
Driven by the proven success of the early adopters, the fledging geothermal industry quickly gained traction with developers. Diverso realized that a capital infusion was required to scale its growth. In May 2023, Diverso Energy was acquired by CVC DIF, a global infrastructure fund manager with over €18 billion of infrastructure assets under management. The acquisition armed Diverso’s founders with the capital to transform Diverso into Ontario’s first vertically integrated geothermal company. Consolidating engineering, drilling, construction, and project capital under one roof helped Diverso streamline its offering. Enabling developers to reduce financial and construction risk and stabilize long-term operating costs, Diverso’s used its new scale to transform geothermal from a niche sustainability initiative into a mainstream energy alternative for developers.
Mesquita explains how the CVC DIF investment will catalyze future growth. “With the downturn of the economy and higher interest rates, the building industry has really taken a hit. But we haven’t scaled back. CVC DIF’s investment has enabled us to double our size in the past couple years, develop a seasoned in-house construction team and add eight rigs to our fleet. When the market recovers, we’ll be well positioned to dominate the industry.”
For developers, Diverso’s strong capital position and EaaS model eliminates the cost and risk associated with integrating geothermal into projects. “Because we own the asset, we design, build, and operate it – we remove any work on their part altogether,” Mesquita says of the seamless experience. “It’s a differentiator for developers, one where they can go to market with a low- or no-carbon building in comparison to their peers at the same cost or less.”
The Pathway To The Future
A decade along, Diverso’s growing team has delivered on Tim Weber’s founding vision with more than 300 buildings benefitting from the company’s low carbon geothermal systems. Once an industry pioneer, now a leader in geothermal utility solutions, Diverso sees a bright future helping developers transition from traditional gas-based HVAC systems. As real estate developers navigate rising energy costs and stricter carbon reduction mandates, a strong sustainability focus is more than a nice idea – it’s increasingly expected.
“It depends on the market developers are building for as to when they make the switch to the Diverso’s EaaS geothermal model,” says Branthaven’s Wadsworth. “But it’s a solution that makes a lot of sense. If it doesn’t cost any more to build versus the traditional 4-pipe system, why wouldn’t you go down that road?”
Good question.
“Our developers understand our founding principle – a geothermal system isn’t simply a piece of equipment in the building," says Weber. "It's very nuanced, and they know having an experienced geothermal partner at the table from the outset — to properly design and integrate the system into a development — ensures its successful long-term operation.”
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This article was produced in partnership with STOREYS Custom Studio.
