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Tech

Khosla Ventures and Pear VC triple down on Honey Homes, a smart way to hire a handyman

There is apparently a high 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 last June in a Series A funding round.

Era Ventures led the startup’s latest fundraising, a $9.25 million expansion financing that CEO and co-founder Vishwas Prabhakara described as “a seed round.” (PitchBook was valued at $39 million last June, although the company said that was “not accurate.”) In total, since its founding, Honey Homes has raised $21.35 million in capital -risk.

So what prompted the latest capital injection? An increase in member adoption. The company announced last fall that it had doubled its membership in three months to “well over 1,000 members.” It also grew its annual recurring revenue by 3.6 times in 2023. Although the company declined to share specific revenue figures, Prabhakara said the company expects to “do the same and reach eight figures in ARR » in 2024. (Obviously, eight digits equals $10 million.)

“Our team visits more than 150 houses per day,” he added.

Husband-and-wife team Vishwas Prabhakara (first CEO of Yelp) and Avantika Prabhakara (former head of marketing at Opendoor, Trulia, and Zillow) partnered with Katie Pham and Rory O’Connell to launch Honey Homes in 2021. The startup , launched in August of the same year, with its first 10 beta customers, hired the handyman among its employees. The handyman works as a salaried employee to ensure consistency as to who handles the work in a person’s home.

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

The way it works is that members are paired with a dedicated handyman who comes in at least once a month to take care of home improvements and preventative maintenance. Because employees are salaried, they also receive benefits, including parental leave and paid vacation, a rarity in an industry that historically relies on contractors. However, if a person wants to try different contractors for variety, they have that option as well.

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

“We are covering about 5 times more households in our service area than a year ago,” said Vishwas Prabhakara.

Honey Homes only launched in San Francisco earlier this year, but that market now represents the fastest-growing, according to Vishwas Prabhakara.

“The city is a different beast (from the suburbs),” he said. “There are parking issues, crime issues, there are a lot of things to consider. But today it is like our jewel, our most dynamic market. »

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

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

Moore told TechCrunch last year that he thinks Honey Homes differs from many other consumer startups in the home services space that simply connect homeowners with potential sellers or “serve as a concierge.” Competitors include Angi, TaskRabbit, and Thumbtack, among others.

The company decided to raise an extension rather than a Series B, according to Vishwas Prabhakara, after deciding it needed less capital than expected to reach profitability. (The goal is to be profitable within the next two years.) In addition to making money through membership, the average owner spends more than $750 per year on additional services through the service, such as purchase of spare parts, for example.

Currently, Honey Homes has 75 employees and has doubled its handyman team from 25 to more than 50.

Clelia Peters of Era Ventures said she was attracted to investing in Honey Homes because “high-quality maintenance services provided by a dedicated handyman were typically only available to the most rich or those who lived in condos and apartments with super on site.”

She believes the need for Honey Homes’ offering will be even greater in a world where homeowners stay at home and need to maintain their homes for longer periods of time (due to the lock-in effect created by rising rates of interest).

“Additionally, we anticipate that the push toward home electrification will create increased demand for reliable consulting and installation services, which Honey Homes is well positioned to provide,” she added.

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