US-based homebuilder Homebound has secured $75m in a series C round featuring GV, a corporate venturing vehicle for internet technology conglomerate Alphabet, TechCrunch reported yesterday.
Venture capital firm Khosla Ventures led the round, which included Forerunner Ventures, Thrive Capital, Irongrey, Fifth Wall and Deer Park Road as well as private investors Jeff Wilke and Stephen Ross.
The round increased the company’s total equity funding to $148m and the cash was raised alongside hundreds of millions of dollars in debt financing from investment banking firm Goldman Sachs.
Homebound was founded in 2018 to help the residents of northern California rebuild their houses after some 4,600 were destroyed in the Tubbs Fire. It has built a machine learning and big data-equipped software platform designed to simplify the entire homebuilding process from insurance claims to architectural blueprints.
The company’s client base grew in 2021 from wildfire victims to include future homeowners seeking bespoke, ready-to-build properties across the United States. It has opened branches in Austin and Dripping Springs and is in the process of expanding into other Texan cities such as Dallas and Houston as well as the states of Colorado and Florida.
Users can use the platform to find a location they want to live in, or identify an already constructed lot among Homebound’s inventory. The company also provides services such as interior design.
Nikki Pechet, co-founder and CEO of Homebound, told TechCrunch: “We realised what we were facing in Austin and other markets across the country was a different kind of disaster, which is a historic housing shortage being compounded by record migration to a bunch of cities around the country that had some of the worst shortages in the country already going into this migration.
“While we had a plan and knew roughly what we were going to do, we could never have imagined the insane acceleration of Austin or what we would be able to accomplish in what has definitively been the biggest 10 months in the history of the company.”
Although its valuation in the round was not disclosed, Pechet said that with a housing shortage of some 5.5 million units in the country, she anticipates Homebound to eventually become a multibillion-dollar company.
Pechet added that besides its expansion plans, the funding will help the company increase headcount and improve its technology in a bid to address the imbalance between supply and demand found in the real estate sector across large US cities.
End-to-end construction service providers have however had a mixed experience in recent years. Katerra shut down in mid-2021 having raised about $2bn from investors including corporates SoftBank, Foxconn and Divco West after bespoke workspace builder Knotel had filed for bankruptcy earlier the same year.
Fifth Wall had already led Homebound’s $35m series B round in 2019, participating together with GV, Forerunner Ventures, Thrive Capital, Khosla Ventures and Ashton Kutcher, reportedly valuing the company at $200m. Thrive Capital led its $18m series A round the previous year.
Image courtesy of Yanikap via iStock.
