Obviously there is a lot of demand for an on-demand technician.
Khosla Ventures and Pear VC just tripled their investment Honey Homes, offering a dedicated handyman to take on 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 raise, a $9.25 million expansion in funding that CEO and co-founder Vishwas Prabhakara described as “a bullish round.” (PitchBook’s valuation was pegged at $39 million last June, though the company said that’s not “accurate.”) In total, since inception, Honey Homes has raised $21.35 million in venture funding.
So what drove the latest infusion of capital? Increase in membership adoption. The company last fall announced that it had doubled its membership in three months to “well over 1,000 members”. It also grew annual recurring revenue by 3.6x by 2023. While the company declined to share hard revenue figures, Prabhakara said the company expects to “do the same and reach eight figures in ARR” in 2024 (Obviously, the eight figures are $10 million.)
“Our team visits over 150 houses a day,” he added.
Husband and wife team Vishwas Prabhakara (Yelp’s first CEO) and Avantika Prabhakara (former chief marketing officer at Opendoor, Trulia and Zillow) partnered with Katie Pham and Rory O’Connell to launch Honey Homes in 2021. The startup , which launched in August of that year with its first 10 beta customers, is hiring the handyman as a member of its staff. The handyman works as a salaried employee to ensure consistency in who takes care of the work in a person’s home.
Homeowners pay Honey Homes a flat fee to facilitate an end-to-end subscription-based service using its app. This fee ranges from $250 to $395 per month, based on location, although there are annual plans that offer a discount.
The way it works is that members are paired with a dedicated technician who comes at least once a month to take care of home improvements and preventative maintenance. Because the workers are salaried, they also receive benefits, including parental leave and wages, a rarity in an industry that has historically relied 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 homeowners in the San Francisco Bay Area (including the city) as well as much of the Dallas-Fort Worth area. It recently launched in Los Angeles and is expanding there, with plans to expand to Texas as well.
“We are covering about 5 times more homes in our service area than we did a year ago,” said Vishwas Prabhakara.
Honey Homes only launched in San Francisco earlier this year, but now that market represents the fastest growing, according to Vishwas Prabhakara.
“The city is a different beast [than the suburbs],” he said. “There’s questions about parking, there’s questions about crime, there’s a lot to consider. But now it’s actually like our crown jewel, our best-growing market.”
The startup is also adding new features like artificial intelligence that aims to streamline workflow for its team of workers and put more of the “maintenance needs on autopilot.”
Interestingly, DoorDash co-founder Evan Moore joins Honey Homes’ board of directors, and another DoorDash veteran, Andrew Ladd, was tapped last year to lead Honey Homes’ product development.
Moore told TechCrunch last year that he believes Honey Homes is different from many other home services startups that simply match homeowners with potential sellers or “serve as a gatekeeper.” Competitors include Angi, TaskRabbit, and Thumbtack, among others.
The company decided to raise an expansion instead of a Series B, according to Vishwas Prabhakara, after deciding that it needed less capital to reach profitability than previously expected. (The goal is to be profitable in the next two years.) In addition to making money through their membership, the average homeowner spends more than $750 a year through additional services through the service, such as buying parts, for example.
Honey Homes currently has 75 employees and has doubled its workforce 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 craftsman were usually only available to wealthier homeowners or those in flats and apartments with on-site supers”.
He believes the need for Honey Homes’ offering will be even greater in a world where homeowners are living in and needing to maintain their homes for longer periods of time (due to the constraint created by soaring interest rates).
“Furthermore, we expect that the push towards home electrification will create greater demand for reliable advice and installation services, which Honey Homes is well placed to provide,” he added.
