With Contractors In High Demand, A Lot of Funding Is Going To Home Services Startups – Crunchbase News
For many property owners, the homes we own are our most valuable assets. They are also a big pain and a constant flow of money.
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From large items like shaky foundations and burst sewer pipes to simpler repairs like scratched floors and chipped paint, our homes need regular repairs. Few of us have the tools and DIY skills to do it all. And lately it’s even been a challenge to find professionals to do the job.
Enter startups. Against a background of rising real estate values, an aging housing stock and labor shortages at home service providers, investors have poured money into start-up companies looking to help upgrade and maintain properties.
Crunchbase’s analysis of the funding of start-ups targeting home services in the US over the past year found at least $1.4 billion in 23 rounds (see list of funding rounds). We’ve put together a sample list of companies funded in the past year, shown below:
Where does the money go?
By far the largest recipient of funding is ServiceTitan, a provider of software for domestic service contractors in plumbing, HVAC, electrical and other specialties to generate leads and close sales. The Glendale, California-based company, founded by two sons of immigrants who built contract businesses, raised $500 million in a March Series F round, bringing total funding to more than $1 billion.
The next one is pushpin, an app for finding and hiring local professionals that is most popular for home services. The San Francisco-based company closed a $275 million late stage round last month, bringing its total known funding to nearly $700 million.
Neither ServiceTitan nor Thumbtack are new startups, founded in 2012 and 2008 respectively. However, there are also some newer players who raise significant rounds.
Super, provider of subscriptions to cover device and home system failures, raised $50 million Series C in May. And located in Chicago HomeX, a 4-year-old startup that provides virtual support for home repair troubleshooting, raised its first reported institutional round of $90 million in April.
Announcing the round, HomeX founder and CEO Michael Werner pointed to home services as a $500 billion market that “remains highly fragmented and in need of meaningful innovation.” He presents his startup as a player that can bring home services to some of the kinds of transformations that telemedicine has brought to healthcare, by reducing expensive in-person service calls.
HomeX isn’t the only company looking to turn home services into a more virtual business. Hovering in November raised a $60 million Series D to build its service, which allows smartphone users to create an interactive 3D model of any property to measure, design, and estimate home improvement projects.
Faster, cheaper, better…. or at least available
As with start-ups in other industries, home service startups typically market their offerings as a faster, cheaper, or better solution than incumbents. But in today’s market – with many contractors seeing more demand than they can meet – sometimes the great app is just having someone available to do the work.
With many sectors of the economy facing labor shortages, home care is no exception. Contractor operators in HVAC, plumbing, roofing and other fields report difficulties hiring and retaining employees in key markets across the country.
Repair and renovation costs at home have been peaking too, impacted by increased consumer demand and supply chain disruptions that began during the pandemic, in addition to labor shortages.
Public markets love the space too
Public markets also seem pretty confident that we will spend more on home repairs and renovations.
Shares of both The home depot and lowe’s – two companies seen as a barometer of consumer enthusiasm for home upgrades – are trading at record highs. That’s likely another factor driving corporate interest in home services, suggesting that public investors would be receptive to companies with innovative approaches to an already expanding space.
In addition, our houses do not support themselves. (Although it would be really nice if a really innovative startup could come up with a way to do just that.)
Illustration: Dom Guzman
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