Houzz, a US-based home improvement image and services platform that counts mass media group Comcast as an investor, has closed a $400m funding round, Bloomberg reported on Saturday.
The round, which valued Houzz at $4bn according to two people familiar with the matter, included investment manager Wellington Management Company and venture capital firms Sequoia Capital, Zeev Ventures and GGV Capital, and was led by family office Iconiq Capital, according to a subsequent press release. Most of the details had originally been reported by Recode earlier this month, prior to the round’s close.
Founded in 2008, Houzz primarily functions as an online repository where users can browse photos of homes in order to get design ideas. They can then access both places where they can buy featured products and home improvement professionals such as architects, designers, contractors or cleaners, who pay to advertise through the platform, in order to perform jobs.
The platform claims to have some 40 million people in its community, and its US marketplace has more than 9 million items available for purchase from a total of about 20,000 sellers. Houzz also recently launched an augmented reality tool that lets users upload photographs of their home to the platform in order to see how certain items would look.
The round increased Houzz’s overall equity financing to $613m, and the $4bn valuation is almost double that at which it closed its last funding in 2014, a $165m series D round led by Sequoia that included GGV, New Enterprise Associates (NEA), Kleiner Perkins Caufield & Byers (KPCB), DST Global, T. Rowe Price and Zeev Ventures founder Oren Zeev, who participated as a private investor.
Comcast invested in the company’s $35m series C round in 2013 through its corporate venturing vehicle, Comcast Ventures. The round was co-led by GGV and NEA, and inclused Sequoia, KPCB and individual investor David Sacks.
The success of Houzz echoes that of Pinterest, the visual-based social network that allows users to ‘pin’ images of things that interest them to a personal profile. Pinterest was founded in 2009 and spent years building up its user base, which now totals 175 million monthly active users, before delving into monetisation.
The company launched a buy function called Buyable Pins in 2015, about the same time as it closed a $553m series G round that valued it at $11bn. This month, it announced it will begin selling advertising related to the 2 billion searches its users conduct each month.
What links Houzz and Pinterest is of course the visual nature of their platforms, something that makes them ideal for mobile, and their success points the way forward for successors such as Fount, the recently launched app that connects brands with users through social media posts.
Perhaps even more importantly, Houzz draws a line between social media, goods and services, and indicates how they can all be connected through a single access point rather than fenced off through separate platforms.
Home renovation and furnishing is a rapidly growing space, but it isn’t hard to see how the same model could be applied to, say, food, clothing or cars – Spotify is already pursuing a similar function with music – and it will be interesting to see how thoroughly the idea is explored over the next two or three years.