Daybreak - Optimist wants to reinvent the AC. Daikin and LG don’t need to

Episode Date: July 6, 2026

Your AC is running longer this year and the machines responsible may have been designed for a different climate entirely. Optimist, a two-year-old Gurugram startup, has built what it says is India's most energy-efficient residential AC. It is recalibrated for Indian humidity, sourced almost entirely from local suppliers, and engineered with components the industry has long considered too expensive to bother with. But 70% of AC sales in India happen offline, shelf space belongs to brands with decades of dealer relationships, and Optimist is nowhere on the floor yet. How long can a better product afford to wait? Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

If you own an air conditioner in India, you are probably running it longer this year than you did last. And your electricity bill is also probably reflecting that. This is a new normal for Indian summers and it's only getting more expensive. AC ownership in India is rising fast and sales are set to nearly double to 28 million units by 2030. Power consumption from household cooling could more than treble to 100,000. 180 gigawatts by 2035. And by 2045, ACs alone, and listen to this clearly, could account for 35 to 45% of India's peak power demand. So the machines keeping us alive through Indian summers are also becoming one of the biggest drains on the country's energy infrastructure. And here is the

even more bitter truth about this whole scenario. Most ACs in our country are designed. designed wrong for us. You see, standard air conditioners run on cooling cycles that are calibrated for different climates, ones that drive out too much humidity from the air. And Indian bodies need slightly higher humidity to feel comfortable. And the result is that we overcool our rooms to compensate, which drives up energy consumption even further. A 2025 study by RMI, which is a US-based clean energy non-profit, flagged exactly this problem. And this is the market that a two-year-old startup called Optimist has stepped into. Its co-founders are Ashish Goel, who previously built Urban Ladder, and Renov Chopra,

who is a product designer who's worked across R&D consultancies in the UK and the US. They met in early 2024 and spent six months studying India's cooling market. And they concluded that the core problem, good cooling with the least energy consumption, had never actually been solved for Indian conditionals. Their answer launched late in May this year, an AC that currently holds the highest energy efficiency rating among household ACs sold across India, and it is built with components rarely used in residential cooling

and also manufactured with more than 90% local sourcing. So the product exists. The question is whether anyone will be able to buy. buy it. Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nigda Sharma, and I don't chase the news cycle. Instead, every day of the week, my colleague Rachel Vargheese and I will come to you with one business story that's worth understanding and worth your time.

Today is Tuesday, the 7th of July. The engineering decisions at the heart of optimists' product are worth understanding because they are the ones that incumbents have actively avoided. Now, things may get a little bit technical here, but hang on because these are also things that we should understand about our ACs anyway. You see, most major AC brands use a conventional fined tube heat exchanger. It is easy to maintain and durable. Optimus chose the microchannel heat exchanger instead. The component is lighter, more efficient and requires significantly less refrigerant.

It is also more expensive, harder to repair and requires the cooling system to be redesigned around it. Optimist spent 15 to 18 months working through that redesign. There is something called a dual rotary compressor which is typically found only in premium inverter ACs. It is more efficient and it reduces vibration and also delivers more stable cooling than conventional single rotary compressors. Optimist uses it as a baseline. There's also a less visible change that Chopra, who's also a product designer, considers equally important. Standard Aces in India run control cycles designed for a different context,

one that does not account for the fact that Indian bodies need slightly higher humidity. Optimist says that it has recalibrated its cooling logic to suit local conditions. So, the outcome of all this engineering, is a product that beats Dakin, the Japanese brand that is widely considered a benchmark, especially on energy efficiency. Most manufacturers, including Volta's Lloyd and Dakin, carry an ISEER rating between 5.2 and 8. Optimus rating is higher than all of them.

The product is manufactured at a contract facility in Haridwar Uttarakhand. And interestingly, of the 15 key components, Only one, which is the electronic expansion valve, is currently imported. Even the dual rotary compressor initially sourced from a supplier's Chinese facility has been manufactured in India since early 2026. For comparison, Dakin achieve nearly 70% localization through a partnership with Taiwan's Richi Precision, one of the few incumbents to make that investment. Goil is explicit that optimist's agenda goes even further.

Indigenization of a design, he says, is a longer-term goal. And manufacturing alone will not win that battle. The company is already preparing for its next product launches, which is a 1.5-ton unit. Another one is also planned for November. But here is the thing about building a better AC for India. The engineering is only half of the problem. The other is getting it in front of the person who actually needs to buy one. More on that in the next.

segment. On a hot June afternoon at Vijay Sales outlet in South Delhi, the AC section is full. Voltas, Diken, LG, Hitachi, Lloyd, Codridge, all of them are there with VSP tags, EMI offers and financing schemes on display. Sales executives are hovering nearby. But Optimist is nowhere on this floor. The company currently sells through its own website, Amazon, and a number of exclusive stores in Delhi-NCR and Bangalore. The founders describe this as deliberate. Their position is that entering retail

before the service network is properly established would be a risk that they do not wish to take. A week after sales experience would damage the brand at exactly the moment it is trying to build one. Fair enough. The constraint here is real. In India,

around 70% of AC sales happen offline. Shelf space is scarce. A senior executive at a large modern retail chain spoke to the ken and put it quite plainly. They said there is no room for one more brand unless it arrives

with genuine consumer pull or something that functions as a magnetic draw for buyers. Margins matter too. Large format chains expect 8 to 15% at the dealership level and 8 to 12% at the store level. But brand

recognition is what actually moves the product. Finance is also equally non-negotiable. A brand without aggressive EMI programs and no-cost financing tie-ups will struggle to sell at any price. Optimus current financing is limited to no-cost EMI on Amazon and a buy-now pay-later partnership with Snapment. It does not yet match what consumers expect at a Croma or a Reliance Digital. The company's first exclusive store is open in Gurgaon. The Bangalor outlet is planned for later this year and Goel is targeting broader retail presence within the next 18 months. Before launching, Optimus spent eight months training service technicians and claims a service network spanning more than 5,000 pincoats.

The exact size of the technician pool, which is a mix of permanent and contractual workers, has not been disclosed yet. The approach mirrors what Goel did at Urban Laddo, actually. That company launched online in 2012 and opened its first physical store only in 2017. It stayed limited to three cities in its early years, while competitors like Pepper Fry and Fab India expanded quickly. Urban Ladder eventually reached 50 stores before being folded into reliance. The deliberate pace has a logic. It also has a cost. Every month that Optimus spends building silently is a month that it's wrong.

rival spent consolidating their hold on the shelf space, the service networks and the customer trust that optimists still needs to earn. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of a subscriber-only offerings and a full subscription offers daily, long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the Ken.com and click on the red subscribe button on the top of the website.

Today's episode was hosted and produced by my colleagues Niktha Sharma and edited by Rajiv CN.