Apparently, there is a high demand for an on-demand handyman.
Khosla Ventures and Pear VC just tripled their investments in Honey Houses, which offers a dedicated handyman to maintain all the random tasks on a homeowner’s to-do list. Last June, the company raised $9 million in a Series A funding round.
Era Ventures led the startup’s latest raise, a $9.25 million extension financing that CEO and co-founder Vishwas Prabhakara described as a “growth round.” (As of last June, PitchBook’s valuation was $39 million, although the company has said this is “inaccurate.”) In total, Honey Homes has raised $21.35 million in enterprise funding since its inception.
So what prompted the latest capital injection? Increase in member adoptions. Last fall, the company announced that it will doubled the variety of members in three months to “well over 1,000 members.” It also grew annual recurring revenue by 3.6x in 2023. While the company declined to share hard revenue numbers, Prabhakara said the company expects to “do the same and achieve eight-digit ARR” in 2024. (Of course, eight figures is $10 million .)
“Our team visits over 150 homes a day,” he added.
Husband and wife team Vishwas Prabhakara (first CEO of Yelp) and Avantika Prabhakara (former head of promoting at Opendoor, Trulia and Zillow) joined forces with Katie Pham and Rory O’Connell to launch Honey Homes in 2021. The startup, which launched in August this 12 months, and with its first 10 beta customers, employs a handyman as a part of its staff. A handyman works as a salaried worker to ensure consistency in who does the work in a person’s home.
Homeowners pay Honey Homes a flat fee for the convenience of using a comprehensive membership-based service through the app. This fee ranges from $250 to $395 per thirty days, depending on location, although there are annual plans that provide a discount.
The way it really works is that members are assigned a dedicated handyman who comes in at least once a month to handle home improvements and preventive maintenance. Because staff are paid, in addition they receive advantages, including parental leave and paid break day, which is rare in an industry that has historically relied on contractors. However, if someone wants to try different artists for variety, in addition they have this chance.
The Honey Homes program is currently available to single-family homeowners in the San Francisco Bay Area (including the city itself), in addition to much of the Dallas-Fort Worth area. It recently launched in Los Angeles and is expanding there as well, with plans to expand further into Texas as well.
“We are serving approximately 5 times as many homes in our service area as we did a year ago,” said Vishwas Prabhakara.
Honey Homes only launched in San Francisco earlier this 12 months, but Vishwas Prabhakar says it’s currently the fastest-growing market.
“The city is a different beast [than the suburbs],” he said. “There are questions about parking, there are questions about crime, there’s a lot to consider. But right now it’s actually our crown jewel, our top-growing market.”
The startup is also adding recent features resembling artificial intelligence, which goals to streamline the handyman team’s workflow and put more “maintenance needs on autopilot.”
Interestingly, DoorDash co-founder Evan Moore serves on Honey Homes’ board, and one other DoorDash veteran, Andrew Ladd, was tapped last 12 months to lead Honey Homes’ product development.
Last 12 months, Moore told TechCrunch that he believed Honey Homes was different from many other consumer startups in the home services space that simply match homeowners with potential suppliers or “act as a concierge.” Competitors include Angi, TaskRabbit and Thumbtack.
According to Vishwas Prabhakar, the company opted for an extension relatively than a Series B after it decided it needed less capital to achieve profitability than previously expected. (The goal is to achieve profitability inside the next few years). In addition to being profitable with a membership, the average homeowner spends greater than $750 a 12 months on additional services offered through the service, resembling purchasing parts.
Honey Homes currently employs 75 people and has doubled its staff from 25 to over 50.
Clelia Peters of Era Ventures said she was interested in investing in Honey Homes because “high-quality home maintenance services provided by a dedicated handyman are typically only available to the wealthiest homeowners or condo owners with on-site supervision.”
He believes that demand for Honey Homes’ offering can be even greater in a world where homeowners remain and need to maintain their homes for longer periods (due to the lock-in effect caused by rising rates of interest).”
“Additionally, we anticipate that the drive towards home electrification will create greater demand for reliable consulting and installation services, which Honey Homes is well-positioned to provide,” she added.