Weaver, a London-based marketplace and SaaS contract negotiation platform for matching homeowners/architects planning major home renovation projects with vetted contractors, has closed a $4 million seed round to expand 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 & CEO of MoneyPark and PriceHubble) among others.
The 2017 founded startup had previously raised $1.5M in pre-seed financing from a number of angels — bringing its total raised to date to $5.5M.
Weaver’s platform matches homeowners and architects with appropriate contractors (using an algorithm), facilitating obtaining quotes and price comparison — without the usual friction from having to manually research and reach out to contractors.
It is also intended to house key comms around the contract negotiation/bid process, through baked in messaging, document exchange and on-site meeting scheduling features. So the platform acts as a centralized pipeline which keeps all parties in the loop and can be used to track compliance.
“We started off as two industry founders looking for product/market fit with no-code SaaS, bootstrapping whilst minimising investment. We then invited two tech founders to join us in 2020, and it took around one and a half years to reach product/market fit on a proprietary platform,” says co-founder and CEO Greg Keane on why it’s raising a seed round now.
Contractors on Weaver’s platform are manually vetted by the startup before being allowed into the marketplace where they have a chance to bid for high end projects.
They are also subject to ongoing checks by Weaver to review the quality of their work and spot any other concerns, such as early signs of insolvency. Weaver takes on a troubleshooting role in the case of problems during the build, too.
“Weaver is fixing a fundamental problem of communication between homeowners and contractors in the following order: 1. sourcing contractors they can trust, and; 2. building confidence in a renovation price,” says Keane. “Next, we will be solving the problems of 3. understanding how to get a contract agreed, and 4. removing the risk of contractor bankruptcy with fully insured escrow payments.”
“Renovation projects are matched by an algorithm to contractors,” he confirms. “We have also built the first proper SaaS tendering platform anywhere for home renovations, where users today can exchange information via messaging, document sharing, and site meeting organisation — we are working towards a network effect to kick in here.”
Construction is a complex space for startups to disrupt given it’s best thought of, not as a cohesive single market to rapidly scale across but rather as a series of distinct sub-markets which can have their own workflows and suppliers (as well as, oftentimes, specific regulatory requirements to meet).
But that multifaceted landscape does perhaps create opportunities to lean into necessary nuance and specialism by applying the specificity that a strong software as a service offering can bring.
Notably, Weaver is also targeting its marketplace at a top-slice of home renovation projects — where the size of the project is not only large enough to support monetizing via a success fee on contractors but the risks involved — for all parties — are likely to amp up demand for vetting and centralized accountability. Hence its plan to bolt on fully insured escrow payments for homeowners, for example.
Other plans the startup says it has for the seed funding are to add an extra carrot for contractors in the form of fast payments, as well as transitioning its platform from a desktop cloud-first to mobile-first product — to better align with where user engagement in this home renovation slice of the construction market is strongest.
It will also be making more use of renovations pricing data it’s able to capture to create more utility for homeowners — via “intelligent renovation pricing solutions”, as Keane puts it, which will aim to give these users better feedback on where their prices sit compared to the market.
“We are on our way to becoming the leaders in renovation pricing in our market, which we are confident will establish us as the go-to solution for renovation price indexing,” he suggests, adding: “We have plans to utilise this data to build a machine learning algorithm that will accurately budget and price home renovations, thereby solving one of the industry’s biggest frustrations today.”
He says the issue there is homeowners typically under-budget (by 10%-30%), as they’re doing back-of-an-envelope type calculations “using standard multiples taken from crude averages”. So if Weaver can provide “rapid and accurate” pricing info for the specific project from the outset homeowners may be willing to pay for it — given that data would allow them to save or borrow the right amount before embarking on a big project (with all the risks and stress that entails), or even rethink a house purchase if it’s predicted upon a certain type of renovation.
According to Keane, only a minority (40%) of homeowners use a traditional architect for a renovation project. Plus, he suggests that architects typically introduce only one contractor per project they design (“an architect’s word-of-mouth network is simply not large enough”) — so Weaver aims to step in and support homeowners to more easily get the three quotes most will want to be confident they’re getting market price for their project.
The startup is also partnering with third party firms that produce fixed-price architectural drawings so it can offer their services to the ~60% of homeowners who don’t use a traditional architect so may be after that kind of help to realize their project.
Weaver’s business model has three components: A success fee from contractors who win a project through the marketplace; an access fee for homeowners (or it’s paid by architects firms) — with tiered pricing based on increasing levels of support; and referral fees from renovation loan providers who’re able to pick up Weaver customers.
While there is growing concern in the UK over a deepening cost of living crisis — with energy bills, for example, set to soar next month when a price cap expires, on top of rising inflation and wider economic concerns linked to global and other trade-related events — Keane is not worried this will dent demand for home renovations since the startup is essentially targeting it’s service at the top 1%-5% of earners who are likely to be insulted from the challenges faces lower 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-£300k, which are households with more >£150k incomes, and savings built up over many years,” he tells TechCrunch, going on to suggest there are other factors at play that may drive wealthier households to spend on upgrading their homes, such as in relation to climate concerns.
“We are seeing macro economics pushing more households into renovating to combat energy hikes with properly insulated homes, whilst at the same time reducing household emissions. Furthermore, we anticipate the UK government to be increasing further subsidies on home insulations and eco-boilers to tackle 40% of UK emissions.”
Weaver’s marketplace, which has been live for over four years at this point (although only live in the current form since March 2020), has processed over $120M worth of construction to-date, With the startup noting that orders on the platform in 2021 grew 2.6x times over 2020. It has around 400 contractor companies, 300 architect firms and around 900 homeowners/individual users registered at this stage.
Weaver will be using the seed funds to expand its footprint within the UK to be able to serve more of the domestic home renovation market. (Currently the service covers Greater London, South East England, Birmingham, Manchester and Liverpool.)
Keane says it’s planning future international expansion “eventually” — and on that front it has an eye on Germany and the US where he says its research suggests the market dynamics are similar to the UK’s. (Although the Victorian house renovations that may be typical of many domestic projects undertaken via Weaver’s platform would, presumably, not be the norm as it expands into country’s with very different types of housing stock.)
“Our largest investors are based in these two markets which gives us the network to hire talent locally,” notes Keane, adding: “We thrive in metropolitan areas where there‘s a very fragmented market for contractors and the potential value for our solution is greatest, so we will be expanding beyond the UK by the end of 2023.
“In the UK, our closest competitors are Resi and Houzz. In the US, it would be Sweeten and Block Renovation. We are the only startup targeting architects and their clients.”
SOURCE: Techcrunch
IMAGE SOURCE:Pixabay
