If you’ve ever remodeled any part of your home, you know the headache that comes along with the process. It’s not nearly as glamorous when you don’t have the deep pockets (or expertise) that HGTV’s Chip and Joanna Gaines have to deal with unexpected problems.
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Kyle Zink, the first marketing hire at Square, found this out firsthand after purchasing a home in Southern California a few years ago. Zink hired a contractor through a trusted source and was excited about fixing up the house. But the process turned out to be a nightmare.
“Everything that could have gone wrong, went wrong,” he recalled.
Opportunity
The experience got Zink thinking. His time at Square taught him how much small business can benefit from technology. Zink was dismayed to discover his own contractor essentially relied on a legal pad and text messaging to communicate and for checks to get paid.
“I looked around in the marketplace and saw there were a lot of companies tackling really big commercial problems and projects,” Zink told me. “But on the residential side, there were no real tools for small, independent contractors.”
It was then Zink teamed up with Andy Vella to come up with the concept behind Punch List. The San Francisco-based startup has just closed a $4 million seed round, Zink told Crunchbase News exclusively. It also today launched a mobile app that aims to help independent contractors and homeowners more easily navigate the remodeling process. The digital platform gives contractors a way to provide real-time views on progress, get approval during different phases of a project and get paid as they go.
For Zink, Punch List is “the first modern tool for contractors to grow and run their business.” (In the construction world, a punch list is a list of items that need to be addressed before a project can be deemed complete.)
Bling Capital and Bedrock Capital led the seed financing. Ludlow Ventures and Mayfield Fund 1 also participated, as did a group of high-profile angel investors including Twitter and Square co-founder Jack Dorsey, Rippling COO Matt Macinnis, YouTube co-founder Steve Chen, and Opendoor co-founder and CEO Eric Wu.
How it works
Punch List is in its early stages, having built a core alpha and beta product that it’s been testing with some early customers. Today at the NAHB International Builders’ Show in Las Vegas, the company is publicly releasing its app which will be accessible within all 50 states.
The way it works is fairly straightforward, according to Zink. Once a contractor and a homeowner agree to work together on a remodel, they share the details (such as scope, timeline and budget) with a Punch List account executive. The information is then uploaded to the app for contractor and homeowner approval.
As the contractor completes work, he/she takes photos of the progress in real time and sends them to the homeowner, who can review and approve remotely if desired. When each significant milestone is complete, Punch List automatically generates invoices for homeowner approval. According to Zink, the pay-as-you-go model is designed to allow contractors to get paid faster while giving homeowners more visibility into the project. The whole process also aims to keep projects moving along smoothly. If a contractor can get approvals quickly, he/she can avoid delays.
Contractors will pay $49 a month per project, but the service is free to homeowners. Punch List operates on a SaaS platform.
Pain point
The demand is certainly there. According to a recent Ernst & Young survey, 98 percent of contractors globally agree that digital technology will be “critical to the future viability of their business.” Yet just less than 10 percent feel confident in how far along they are on the digital readiness spectrum. Also, according to the Joint Center for Housing Studies, Americans spend more than $400 billion a year on residential renovations and repairs.
In general, the construction tech space is hot, but it has largely focused on software helping with mostly commercial, and mostly big, projects. Yet millions of Americans at any given time are in the middle of some form of home renovation. Startups addressing this subsector, if they do it right, have the potential to garner impressive returns.
Illustration: Li-Anne Dias
Disclosure: Mayfield is an investor in Crunchbase, the parent company of Crunchbase News. Crunchbase’s investors are listed as part of its Crunchbase profile. For more about Crunchbase News’s editorial policies on disclosure, see the News team’s About page.↩
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