There’s apparently a lot of demand for an on-demand handyperson.
Khosla Ventures and Pear VC have just tripled down on their investment in Honey Homes, which offers up 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 round of funding.
Era Ventures led the startup’s latest raise, a $9.25 million extension financing that CEO and co-founder Vishwas Prabhakara described as “an up round.” (PitchBook has its valuation pegged at $39 million as of last June, although the company said that is “not accurate.”) In total, since inception, Honey Homes has raised $21.35 million in venture funding.
So what drove the latest capital infusion? A surge in member adoption. The company last fall announced it had doubled its member count in a three-month period to “well over 1,000 members.” It also increased annual recurring revenue by 3.6x in 2023. While the company declined to share hard revenue figures, Prabhakara said the company expects to “do the same and get to eight figures in ARR” in 2024. (Obviously, eight figures is $10 million.)
“Our team has been visiting over 150 homes a day,” he added.
Husband and wife team Vishwas Prabhakara (Yelp’s first general manager) and Avantika Prabhakara (a former marketing head at Opendoor, Trulia and Zillow) teamed up with Katie Pham and Rory O’Connell to start Honey Homes in 2021. The startup, which launched in August of that year with its first 10 beta customers, hires the handyman as part of its staff. The handyman works as a salaried employee to help ensure consistency in who’s taking care of the work in a person’s home.
Homeowners pay Honey Homes a flat fee for the convenience of a membership-based “end-to-end” service using its app. That fee ranges from $250 to $395 a month, based on location, although there are annual plans that offer a discount.
The way it works is that members are matched with a dedicated handyperson who comes by at least once a month to take care of home improvements and preventative maintenance. Because the employees are salaried, they also receive benefits, including parental leave and paid time off, a rarity in an industry that has historically relied on contractors. However, if a person wants to try out 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 in much of the Dallas-Fort Worth area. It recently launched in Los Angeles and is expanding there as well, with plans to also expand more in Texas.
“We’re covering about 5x more homes in our service area than we were a year ago,” Vishwas Prabhakara said.
Honey Homes only launched in San Francisco earlier this year, but now that market represents its fastest-growing, according to Vishwas Prabhakara.
“The city is a different beast [than the suburbs],” he said. “There’s parking questions, there’s crime questions, there’s a lot to consider. But now it is actually like our crown jewel, our best-growing market.”
The startup is also adding new features, such as AI that aims to streamline workflow for its handyperson team and put more of the “maintenance needs on autopilot.”
Interestingly, DoorDash co-founder Evan Moore sits on Honey Homes’ board and another DoorDash veteran, Andrew Ladd, was tapped last year to drive Honey Homes’ product development.
Moore told TechCrunch last year that he believes that Honey Homes differs from many other consumer startups in the home services space that simply match homeowners with potential vendors 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 it decided it needed less capital to get to profitability than previously expected. (It’s aiming to be profitable in the next couple of years.) Besides making money through its membership, the average homeowner spends over $750 a year through additional services through the service, such as buying parts, for example.
Presently, Honey Homes has 75 employees and has doubled its handyperson team from 25 to over 50.
Era Ventures’ Clelia Peters said she was drawn to invest in Honey Homes because “high-quality home maintenance services provided by a dedicated handyperson have typically only been available to the wealthiest homeowners or to those in condos and apartments with on-site supers.”
She believes that the need for Honey Homes’ offering will be even greater in a world where homeowners stay in and need to maintain their homes for longer periods (because of the lock-in effect created by the spike in interest rates).”
“Additionally, we anticipate that the push towards home electrification will create a greater demand for reliable advice and installation services, which Honey Homes is well-positioned to provide,” she added.
techcrunch.com
