Apparently, on-demand handymen are in high demand.
Khosla Ventures and Pear VC triple their investment in Honey Homes. Honey Homes offers dedicated handymen to handle all the random tasks on a homeowner's to-do list. The company raised $9 million in a Series A round last June.
Era Ventures led the startup's latest round of funding, a $9.25 million extension funding that CEO and co-founder Vishwas Prabhakara described as an “upround.” (Pitchbook was valued at $39 million as of last June, but the company says this is “not accurate.”) Honey Homes has raised a total of $21.35 million in venture funding since its inception. did.
So what drove the recent capital injection? Member recruitment is rapidly increasing. Last fall, the company announced that it had doubled its membership in three months to “well over 1,000 members.” Additionally, annual recurring revenue increased 3.6 times in 2023. The company declined to release specific revenue numbers, but Prabhakara said it expects to “do the same thing and reach eight-digit ARR” in 2024. (obviously, 8 digits equals 10 dollars) million. )
“Our team visits more than 150 homes every day,” he added.
Husband-and-wife team Vishwas Prabhakara (first general manager of Yelp) and Avantika Prabhakara (former head of marketing at Opendoor, Trulia, and Zillow) team up with Katie Pham and Rory O'Connell to launch Honey in 2021. – Launched Holmes. In his August of that year, his first 10 beta customers hired this handyman as part of their staff. A handyman works as a salaried employee and maintains consistency in who is responsible for tasks in the home.
Homeowners pay a flat fee to Honey Homes for the convenience of a membership-based “end-to-end” service using the app. Prices range from $250 to $395 per month depending on location, but there are also annual plans that offer discounts.
The way it works is that members are matched with a dedicated handyman who comes in at least once a month to perform home improvements and preventive maintenance. Because employees are paid, they also receive benefits such as parental leave and paid time off, which is unusual in an industry that has historically relied on contractors. However, if you want to try out different vendors, you have that option as well.
Honey Homes is currently available to single-family homeowners in most of the San Francisco Bay Area (including the city) and the Dallas-Fort Worth area. It recently launched in Los Angeles and is expanding there, with plans to expand further in Texas.
“We are covering about five times more homes in our service area than we did a year ago,” Vishwas Prabhakara said.
Vishwas Prabhakara said Honey Homes only launched in San Francisco earlier this year, and that's currently its fastest growing market.
“The city is a different beast. [than the suburbs],” he said. “There are parking issues, crime issues, a lot of things to consider. But now it's actually kind of our crown jewel and our most growing market. ”
The startup is also adding new features such as AI, which aims to streamline workflows for handyman teams and put more of their “maintenance needs” on autopilot.
Interestingly, DoorDash co-founder Evan Moore is a member of Honey Homes' board of directors, and fellow DoorDash veteran Andrew Ladd was named last year to lead Honey Homes' product development. .
Moore told TechCrunch last year that Honey Homes is different from many other consumer startups in the home services space that simply match homeowners with potential vendors or “act as a concierge.” He said he believed it. Competitors include Angi, TaskRabbit, Thumbtack, and more.
Vishwas Prabhakara said the company decided to raise an extension rather than a Series B after determining that it needed less capital to achieve profitability than previously expected. (The company aims to be profitable in the next few years.) In addition to earning money through membership, the average homeowner spends more than $750 a year on additional services through the service, such as purchasing parts. ing.
Today, Honey Homes has 75 employees and has doubled its handyman team from 25 to more than 50 people.
Era Ventures' Clelia Peters said she was drawn to invest in Honey Homes: “High-quality home maintenance services provided by a full-time handyman are typically reserved for the wealthiest homeowners or super This is because it was only available to residents of permanent condominiums and apartments.''
She believes that in a world where homeowners need to stay in and maintain their homes for long periods of time (due to the lock-in effect caused by rising interest rates), the need for Honey Homes' services will become even greater. . ”
“Furthermore, the rise in home electrification is expected to further increase the demand for trusted advice and installation services, which Honey Homes is well-positioned to provide,” she added.