Whoever has Anyone who has ever tried to build or renovate a house knows the pain of obtaining building permits. Challenges in obtaining permits not only add frustration, but also time and expense to any project.
It’s no surprise then that the startup world has seen a flurry of startups focused on streamlining the licensing process. The latest to receive venture funding is PermitFlowa Y Combinator alum that has developed “end-to-end” workflow and automation software that aims to “enable from soup to nuts,” according to its founders.
“We Think of it as TurboTax for a construction permit, as it handles everything from initial research, application, permit preparation, submission, tracking, joint response and coordination, to permit issuance,” said Co-Founder and CEO Francis Thumpasery. .
Today the company is announcing that it has raised $31 million in Series A funding led by Kleiner Perkins, according to TechCrunch exclusively. The funding comes just over a year later raised $5.5 million in seed funding led by Initialized Capital. Initialized also participated in the final round, along with Y Combinator, Felicis Ventures, Altos Ventures and several angel investors. eatfounded in fall 2021, PermitFlow joined Y Combinator in early 2022.
While the founders of the Milpitas, Calif.-based startup declined to disclose the valuation, Thumpasery said it was a “bullish” round. They also declined to disclose hard revenue figures, but said PermitFlow saw its ARR grow by “more than 20 times” in 2023 compared to the previous year.
More affordable housing
PermitFlow primarily works with general contractors to make the permitting process less arduous. He has dozens of clients including Red Tail, Urban Moment and Wright Construction using PermitFlow on a subscription basis. Its biggest footprints are in California, Florida and Texas, but it’s active in that municipalities throughout the country with a systematic expansion plan at national level.
“What we’re trying to do through our software is give them greater speed and consistency. So not only do they have a faster recovery, but also more predictability around it,” said Thumpasery. “It allows them to give their customers more precision in terms of what they can expect.”
PermitFlow doesn’t just focus on the residential real estate industry. It also works with commercial clients. However, one of its biggest goals is to help make housing more affordable by helping to reduce the time it takes to obtain permits.
“By making permitting faster and more reliable, it lowers the return profile you need to make a housing project work,” Thumpasery told TechCrunch. “And it also lowers direct costs because you have lower material handling costs and lower subcontractor handling costs.”
“This is good for the housebuilder because it allows them to operate more profitably, but it also lowers the overall market cost of building houses and that ultimately lowers the cost of housing and makes it more affordable,” he added.
So far, PermitFlow has helped permit more than 5,000 housing units, and the company plans to continue prioritizing its mission to make housing development more affordable, Thumpasery said. These efforts led to the company being priced as co-winner of the 2023 Ivory Coast Prize in Public Policy and Regulatory Reform.
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Covid and LLM
PermitFlow also works with different vendors that provide software to municipalities.
“A municipality today will have a digital licensing process. That was a big step and change from COVID, and that was a big catalyst for what allows companies like us to be successful,” Thumpasery told TechCrunch. “We’re interacting with these software platforms, rather than directly interacting with municipalities.”
The opportunity, PermitFlow believes, is huge. “Tit is very much a green field, an old-style market. When we deal with general contractors and developers, 99% of the time we deal with people who use really manual, error-prone, and transparent processes to get their permits. This is the world we live in… and the one we are trying to transform.”
The company is working to embed LLM (language learning models) throughout its product to decipher “fuzzy” requirements and help users understand what permits are needed depending on their specific project, how to best prepare and submit them and also monitor the process. It also plans to scale geographicallyy native software architecture, which the company claims co-founder Sam Lam did at Uber.
“There is no longer a need for construction professionals to try to decipher obscure websites/municipal requirements and suffer through the back-and-forth in the form of municipal office feedback,” said Kleiner Perkins partner Josh Coyne. “PermitFlow shoulders all of this complexity into a single, centralized platform.”
Other startups in the space that have recently raised capital include San Francisco-based Pulley, which raised $4.4 million in seed funding in June 2022 to help advance its goal of shortening the building permit process “from months to days.” In October, Austin-based GreenLite announced it had come out of stealth with $8 million in seed funding.
