DIY home renovation projects aren’t for the faint of heart. That’s why general contractors exist.
But sometimes, the hassle of finding a contractor can be overwhelming. That’s where Pro.com comes in. The Seattle-based startup just raised a $33 million Series B, bringing its total raised to $60.5 million, to further its mission of taking its general contracting business to new markets.
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WestRiver Group, Goldman Sachs and Redfin led the latest round, which also included participation from existing investors DFJ, Madrona Venture Group, Maveron and Two Sigma Ventures. As part of the financing, Erik Anderson, WestRiver Group founder and CEO; Glenn Kelman, CEO of Redfin, and Charlotte Guyman, a former Microsoft executive and current Berkshire Hathaway board member, all joined Pro.com’s board.
Pro.com originally started out in 2013 as a marketplace connecting homeowners with contracting professionals. After about 18 months, the company pivoted to become a vertically integrated general contractor applying its software “to every step of the process,” according to co-founder and CEO Matt Williams.
Pro.com currently operates in Seattle, Denver, San Francisco, San Jose, and Phoenix with plans to expand expanding into Portland and at least four other cities in the western part of the United States over the next year. Bookings were up nearly 300 percent in 2018 compared to the year prior. Williams said Pro.com doubled its employees to 125 over the course of the past year, and has plans to double headcount again in 2019.
“We have built a pricing engine so we know what certain work should cost in a given market and can produce quotes relatively quickly in a mobile-friendly way,” Williams told Crunchbase News. “I believe that we’re the most technically-enabled GC and have captured significant market share in our home base of Seattle…. Over the course of the next two years, we hope to be operating in most major cities in the United States.”
In a blog post, Williams wrote that having a strategic investor such as Redfin would only help Pro.com in growing its business.
“Many of Redfin’s customers struggle to get professional renovation services, so we know firsthand that Pro.com’s market opportunity is massive,” Redfin CEO Kelman said in a written statement. “Pro.com and Redfin share a commitment to combining technology and local, direct services to best take care of customers.”
Meanwhile, WestRiver Group’s Anderson noted that his firm believes Pro.com “has the potential to be one of the most trusted brands in home improvement services.”
Pro.com’s offering is based on the premise that “the home remodeling industry is fraught with a lack of transparency, unhappy customers and limited use of the latest technologies,” according to Williams, who previously spent 12 years as an executive at Amazon.
“Software and technology are used so infrequently in the construction industry resulting in one of the lowest productivity improvement rates across all industries,” he wrote. “On top of that, homeowners experience anxiety, frustration and lose trust in most contractors they hire. In an industry where $400 billion is spent annually, it’s time for a change.”
Pro.com claims its technology allows it to provide detailed quotes faster than other contractors. Its app helps local project managers track and communicate progress on job sites, while a back-end office team helps provide support.
So far, the company has worked on projects ranging from kitchen and bath remodels to new additions, and ground-up new home construction.An example of a recent project is an accessory dwelling unit (ADU) that was built alongside a home on Lake Washington. Another project was full ground-up construction of a new 3,500 square-foot home on Mercer Island, WA. The company’s average job totals around $75,000to $80,000, according to Williams.
The company works with subcontractors in the markets it operates to provide its renovation services.
“When we build out network in each city, we bring on board industry veterans who have relationships with subs, or cull from our own previous network,” Williams said. “Subcontractors really like working with us since we pay consistently and on time, usually faster than they are used to.”
What makes Pro.com more unique, Williams believes, is its focus on the residential market.
“There’s been a fair amount of construction tech in the commercial space,” he said. “But almost zero in residential, outside of prefab construction or marketplaces. What we’re doing isn’t the same as building a bunch of homes that are similar. Every project is different.”
Indeed, I’ve written a fair amount about growing investment in the construction tech space in the past. Last time we checked, North American construction tech startups raised $220.7 million across 14 deals in the third quarter of 2018. That was up 348 percent from $49.3 million raised over 19 deals in the third quarter of 2017, and a staggering 5,865 percent higher than the $3.7 million raised in six transactions in the third quarter of 2013.
And, earlier this week, we covered another residential real estate-focused startup, Knock, raising $400 million. The company is viewed as a competitor to Opendoor, and wants to make trading in your home as easy as trading in your car.
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