Khosla Ventures and Pear VC Triple Down on Honey Homes, a Smart Way to Hire a Handyman | TechCrunch - Latest Global News

Khosla Ventures and Pear VC Triple Down on Honey Homes, a Smart Way to Hire a Handyman | TechCrunch

There seems to be a lot of demand for an on-demand handyman.

Khosla Ventures and Pear VC just tripled their investment in Honey Homes, which offers a dedicated handyman to take care of all the random tasks on a homeowner’s to-do list. The company raised $9 million in a Series A funding round last June.

Era Ventures led the startup’s most recent capital raise, a $9.25 million extension financing that CEO and co-founder Vishwas Prabhakara described as “an upside round.” (PitchBook’s valuation was estimated at $39 million last June, although the company said that was “not accurate.”) In total, Honey Homes has raised $21.35 million in venture funding since its inception.

So what was the trigger for the latest capital injection? An increase in member acceptance. Last fall, the company announced that it had doubled its membership to “well over 1,000 members” in three months. It also grew annual recurring revenue by 3.6x in 2023. While the company declined to provide specific revenue figures, Prabhakara said the company expects to “do the same and achieve eight-digit ARR in 2024.” to reach”. (Apparently eight digits is $10). Million.)

“Our team visited over 150 houses daily,” he added.

Husband and wife team Vishwas Prabhakara (first general manager of Yelp) and Avantika Prabhakara (former marketing director at Opendoor, Trulia and Zillow) teamed up with Katie Pham and Rory O’Connell in 2021 to create Honey Homes. The startup was founded in 2021. In August of the same year, with its first 10 beta customers, the company hired the craftsman as part of its staff. The handyman works as an employee to ensure that work in a person’s household is completed consistently.

Homeowners pay Honey Homes a flat fee for the convenience of an “end-to-end” membership-based service through the app. This fee ranges from $250 to $395 per month depending on your location, although there are annual plans that offer a discount.

The way it works is that members are assigned a dedicated handyman who comes by at least once a month to take care of home improvements and preventive maintenance. Because employees are employed, they also receive benefits, including parental leave and paid time off, a rarity in an industry that has historically relied on contractors. However, if someone wants to try different contractors for variety, they have that option too.

Honey Homes is currently available to single-family homeowners in the San Francisco Bay Area (including the city proper) and much of the Dallas-Fort Worth region. The company recently launched and is expanding in Los Angeles, with plans to expand more in Texas as well.

“We cover about five times more households in our coverage area than we did a year ago,” said Vishwas Prabhakara.

Honey Homes only launched in San Francisco earlier this year, but Vishwas Prabhakara says that market is now its fastest-growing market.

“The city is a different beast [than the suburbs],” he said. “There are parking questions, there are crime questions, there’s a lot to think about. But now it’s actually our crown jewel, our fastest growing market.”

The startup is also adding new features, such as AI, which aims to streamline workflow for its team of tradesmen and put more “maintenance requirements on autopilot.”

Interestingly, DoorDash co-founder Evan Moore sits on Honey Homes’ board, and another DoorDash veteran, Andrew Ladd, was tapped last year to lead Honey Homes’ product development.

Moore told TechCrunch last year that he believes Honey Homes is different from many other consumer home services startups that simply match homeowners with potential providers or “act as a concierge.” Competitors include Angi, TaskRabbit and Thumbtack.

According to Vishwas Prabhakara, the company opted for an extension instead of a Series B after deciding it needed less capital to reach profitability than previously expected. (The goal is to be profitable in the next few years.) In addition to making money through membership, the average homeowner spends over $750 per year on additional services, such as purchasing replacement parts.

Honey Homes currently employs 75 people and has doubled its team of tradesmen from 25 to over 50.

Clelia Peters of Era Ventures said she was drawn to investing in Honey Homes because “quality home maintenance services provided by a dedicated tradesman have typically been available only to the wealthiest homeowners or those in condos and apartments with on-site caretakers .”

She believes the need for Honey Homes’ offering will be even greater in a world where homeowners need to stay longer and keep their homes (due to the lock-in effect created by the rise in interest rates).”

“Furthermore, we expect the push to electrify homes will result in greater demand for reliable advice and installation services, which Honey Homes is well positioned to provide,” she added.

Sharing Is Caring:

Leave a Comment