London startup Weaver gets $4 million to create an approved home improvement marketplace – TechCrunch

Weaver, a London-based marketplace and SaaS contract trading platform to connect homeowners/architects planning major home improvement projects with approved contractors, has closed a $4 million funding round to develop nationally.

The round was led by European VC btov Partners, with participation from FJ Labs, Enterprise Fund (a syndicate of former Atlassian & Docker executives) and Dr. Stefan Heitmann (founder and CEO of MoneyPark and PriceHubble), among others .

The 2017-founded startup previously raised $1.5 million in pre-seed funding from a number of angels, bringing its total raised to date to $5.5 million.

Weaver’s platform matches owners and architects with the right contractors (using an algorithm), making it easy to get quotes and compare prices – without the usual friction of manual research and making contact with contractors.

It is also intended to host key communications around the negotiation/bidding process, with messaging, document exchange and on-site meeting scheduling functionality. Thus, the platform acts as a centralized pipeline that keeps all parties informed and can be used to track compliance.

“We started as two industry founders looking for product/market fit with no-code SaaS, seeding while minimizing capital investment. We then invited two technology founders to join us in 2020, and it took about a year and a half to achieve product/market fit on a proprietary platform,” says co-founder and CEO Greg Keane on why he’s raising a round now.

Contractors on Weaver’s platform are manually vetted by the startup before being allowed into the marketplace where they have the opportunity to bid on high-end projects.

They are also subject to continuous checks by Weaver to examine the quality of their work and detect any other problems, such as the first signs of insolvency. Weaver also takes on a troubleshooting role should problems arise during construction.

“Weaver solves a fundamental communication problem between homeowners and contractors in the following order: 1. find contractors they can trust, and; 2. build confidence in a retrofit award,” says Keane. “Then we will solve the problems of 3. understanding how to enter into a contract and 4. eliminating the risk of contractor bankruptcy with fully insured escrow payments.”

“Renovation projects are matched by an algorithm to contractors,” he confirms. “We also built the first SaaS bidding platform suitable for home renovations, where users today can exchange information via messaging, document sharing and hosting on-site meetings – we are working on a network effect to start here.”

Construction is a complex space for startups to disrupt, given that it is best viewed, not as a single cohesive market to grow rapidly, but rather as a series of distinct sub-markets that may have their own flows. and suppliers (as well as, often, specific regulatory requirements to be met).

But perhaps this multi-faceted landscape creates opportunities to lean into the necessary nuances and specialization by applying the specificity that a strong software-as-a-service offering can bring.

Notably, Weaver is also targeting its market at an upper tier of home improvement projects – where not only is the size of the project large enough to support monetization via a success fee on contractors, but the risk involved – for all parties – are likely to increase the demand for centralized control and accountability. Hence his plan to bolt on fully insured escrow payments for homeowners, for example.

Other plans the startup says it has for seed funding are to add an extra carrot for entrepreneurs in the form of quick payouts, as well as transitioning its platform from a cloud-first product to a mobile product first – to better align with where user engagement in this home improvement slice of the construction market is strongest.

It will also make greater use of the renovation pricing data it is able to capture to create more utility for homeowners – via “smart renovation pricing solutions”, as Keane puts it, that will aim to give those users better feedback on the position of their prices relative to the market.

“We are well on our way to becoming the leaders in renovation pricing in our market, which we believe will establish us as the go-to solution for renovation price escalation,” he suggests, adding, “We plan to use this data to build a machine learning algorithm that will accurately budget and price home renovations, solving one of the biggest frustrations in the industry today.

He says the problem is that owners are typically under-budgeted (by 10% to 30%) because they do back-of-envelope-type calculations “using standard multiples drawn from raw averages.” So if Weaver can provide “fast and accurate” pricing information for the specific project upfront, homeowners may be willing to pay for it – given that the data would allow them to save or borrow the right amount. before embarking on a major project (with all the risks and stress that entails), or even rethinking the purchase of a house if it is planned on some type of renovation.

According to Keane, only a minority (40%) of the owners call on a traditional architect for a renovation project. Moreover, he suggests that architects generally introduce only one contractor per project they design (“an architect’s word-of-mouth network just isn’t big enough”) – Weaver therefore aims to step in and help homeowners more easily obtain the three quotes most will want to be sure of getting the market price for their project.

The startup also partners with third-party firms that produce fixed-price architectural drawings so they can offer their services to the ~60% of homeowners who don’t use a traditional architect and therefore may seek this type of help to carry out their project.

Weaver’s business model has three components: a success fee paid by contractors who win a project in the marketplace; a right of access for owners (or it is paid for by architectural firms) – with tiered pricing based on increasing levels of support; and referral fees from home improvement loan providers who are able to recover Weaver customers.

As the UK grows increasingly worried about the worsening cost of living crisis – with energy bills, for example, set to soar next month as a price cap, in addition to rising inflation and broader economic concerns related to global trade and other – related events – Keane is not worried about this happening home improvement demand given that the startup primarily targets its service to the top 1% to 5% of earners who are likely to be offended by the challenges faced by low-income households.

“We are not concerned [about the impact of the cost of living crisis on demand for renovations] as our average project is £100-300,000, which are households with over £150,000 in income and savings accumulated over many years,” he told TechCrunch, suggesting that there are other factors at play that could incentivize wealthier households to spend on housing upgrades, for example due to climate concerns.

“We see the macro economy driving more households to retrofit to combat energy spikes with properly insulated homes, while reducing household emissions. In addition, we expect the UK government to increase additional subsidies on home insulation and green boilers to tackle 40% of UK emissions. »

Weaver’s marketplace, which has been online for more than four years at this point (although only alive in its current form as of March 2020), has processed over $120 million in builds to date, the startup noting that orders on the platform in 2021 grew 2.6 times in 2020. It has around 400 contracting companies, 300 architectural firms and around 900 registered individual owners/users at this point.

Weaver will use the start-up funds to expand its presence in the UK so that it can serve a larger part of the national home improvement market. (Currently the service covers Greater London, South East England, Birmingham, Manchester and Liverpool.)

Keane says he foresees future international expansion “eventually” – and on that front he has his eye on Germany and the US where he says his research suggests market dynamics are similar to those in the UK -United. (Although the Victorian home renovations that may be typical of many home projects undertaken through Weaver’s platform are unlikely to be the norm as they span countries with vastly different types of housing.)

“Our biggest investors are based in these two markets, which gives us the network to hire talent locally,” Keane notes, adding, “We thrive in metropolitan areas where there is a very fragmented market for entrepreneurs and where the potential value of our solution is the highest, so we will expand beyond the UK by the end of 2023.

“In the UK, our closest competitors are Resi and Houzz. In the United States, it would be Sweeten and Block Renovation. We are the only startup targeting architects and their clients.

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