Digital Water Heater Company Kickstarts Funding

Jerry Callahan, CEO of ISI Technology, has announced $2 million in seed money from existing investors, which will support production and commercialization of a digital water heater, the HEATWORKS MODEL 1, set to enter the marketplace later this year.

That announcement was a milestone for the innovative technology Callahan has developed. Yet it wasn't the most unusual marker on Callahan's roadmap to success. He also just finished a Kickstarter campaign that raised $436,594 -- more than 300 percent of his original goal of $125,000.

The campaign garnered 1,398 backers from the online crowdfunding resource. The funding period was from Jan. 2 to Feb. 16.

Kickstarter typically has been used as funding sources for film and game companies, and Callahan admits that it's unusual for a technology-based company to turn to crowdfunding for backers. Yet he did so with a goal in mind.

"Putting the project on Kickstarter allowed us to engage in one-on-one conversations with potential backers," he said. He received hundreds of emails a day during the campaign, which he said was "an incredibly valuable experience."

Callahan studied engineering at MIT and Stevens Institute of Technology and received an MBA from University of Chicago. He has led the HEATWORKS MODEL 1 project from its inception.

Referring to himself as "a serial entrepreneur" -- the Blue Rhino Propane Cylinder Exchange was one of the companies he grew to public stage several years ago -- Callahan believes the MODEL 1 can make a major impact on the market by reducing the amount of energy and water used to deliver hot water virtually anywhere, in virtually any application.

"We've been developing and testing this technology for several years," he said. "We're ready to go to market."

The MODEL 1 uses a patented direct electrical resistance (DER) heating process that heats water directly using electricity to heat the water molecules -- as opposed to the current methods of using heating elements to heat the overall container of water -- to deliver hot water immediately in a continuous flow. The digital temperature control uses a solid-state microprocessor and sensors to measures water temperature and auto-adjust power for precise, stable temperature.

The unit is also compact -- about the size of a shoebox -- and will come with wi-fi connectivity for the homes that use that technology.

According to Callahan, the unit's ability to deliver instant hot water eliminates the inefficiency of waiting for hot water, which will save up to 40 percent of energy and 10 percent of water.

"Water heaters, as most of us know them, have been around for more than 100 years, and rely on antiquated technology to deliver one of the most important amenities in the home," said Greg Tew, associate professor and director of professional and industry relations for the School of Architecture + Design at Virginia Tech. "ISI has developed a much needed technological overhaul to the water heater that delivers the benefits homeowners demand. By delivering impressive levels of comfort, savings, reliability and connectivity, the HEATWORKS MODEL 1 brings the water heater into the modern, connected home."

ISI Technology, which is currently located at the Charleston Digital Corridor's Flagship business incubator, current employs six people. Callahan said that number is expected to double in the next 90 days and will double again by year end.