After Dan Laufer sold his apartment rental platform RentLingo in 2021, he vowed never to found a startup again, but he couldn't ignore the potential to solve the problems he saw as Nextdoor's head of product and marketing.
“Nextdoor's biggest users are people looking for providers, especially HVAC,” Laufer told TechCrunch. “There was a gap on the consumer side and the satisfaction level of the experience wasn't modern. Another big trend I've seen is the silver tsunami. These baby boomers are owning these. But they don't necessarily have an exit plan.”
The result was PipeDreams. The startup will acquire his privately owned HVAC and plumbing companies and scale them with software that helps with scheduling and marketing. With PipeDreams, executives can choose to leave without losing their employees, name or brand, or join a larger company with more resources, Laufer told TechCrunch. Ta.
PipeDreams just raised $25.5 million in Series A led by Canvas Ventures and Plural Platform, with additional funding from DoorDash founder Tony Xu and former OpenTable CEO Thomas Layton. PipeDreams has acquired nine of his companies so far, and currently in San Francisco, he has operations in the Bay Area, Tucson, and Denver, and plans to expand.
“The advantage of this industry is its large scale. There are over 100,000 companies that handle plumbing and HVAC equipment,” Laufer said of the U.S. market. “We're going to maintain their brand. A lot of these people have their names on their trucks, and it's very personal.”
PipeDreams' strategy is a twist on the private equity rollup model, in which PE firms acquire small companies in niche sectors (private schools, dentistry, health care) and integrate them into larger operations. The aim is to sell the large company and make a profit. For investors.
PipeDreams also uses debt to acquire businesses outright, but it is not tied to the strict profit-or-exit lifecycle timeline of the four to six years expected in a PE. not. The company has a $15 million debt facility that it plans to use to acquire businesses and use the equity raised to improve its software. Laufer said he expects to raise more debt than equity in future rounds.
Rollup strategies are not common among venture-backed startups, and the closest comparisons are Amazon aggregator startups like Perch and Thrasio, which have struggled financially recently. But unlike these aggregators, the underlying businesses PipeDreams acquires are not at the mercy of companies like Amazon, which can change the rules at will, and the companies PipeDreams acquires are more focused on customers than the Amazon brand. There is a strong relationship between
That said, PipeDreams faces the same growth hurdles faced by Amazon's aggregators, whether new entrants win more business or local plumbers ramp up their SEO and digital marketing strategies. possible to face.
Laufer said wholly owning an HVAC company is what separates Pipe Dreams from other competitors like Angie and ThumbTack that aim only to connect consumers with professionals. He said the marketplace model, like many of its competitors, is non-obsessive because consumers can find professionals through the marketplace and then seek them out directly. At PipeDreams, we incorporate our technology into each provider's website, so it becomes part of the process whenever someone books that professional.
PipeDreams also addresses the skills shortage in the HVAC and plumbing industry, as Gen Z is less interested in learning a trade than previous generations. In the fourth quarter, the company launched an apprenticeship program to give employees on-the-job training. Five students have enrolled so far, with plans to expand further.
While the company has a long way to go to flesh out its HVAC-focused business, Laufer expects to expand into other categories, including electricians, in the future.
“We bought [a company] A few weeks ago, when the owner had a celebratory dinner, he said at the time, “It's my job to go to college,'' Laufer said. “'I've grown it, so I'm going to move on to the next chapter.' I love that explanation. That's how we do it.”