Weaver, a London-based marketplace and SaaS contract negotiation platform for matching homeowners/architects planning major renovation projects with vetted contractors, has closed a $4 million seed round to expand nationally.
The round was led by European VC btov Partners, which included FJ Labs, Enterprise Fund (a syndicate of former Atlassian & Docker executives) and Dr. Stefan Heitmann (Founder & CEO of MoneyPark and PriceHubble).
The startup founded in 2017 had previously raised $1.5 million in pre-seed funding from a number of angels, bringing the total amount raised to date to $5.5 million.
Weaver’s platform matches homeowners and architects with suitable contractors (using an algorithm), making it easier to obtain quotes and price comparisons – without the usual friction of manual research and contacting contractors.
It is also intended to house key communications around the contract negotiation/bidding process, through built-in messaging, document exchange, and on-site meeting scheduling features. 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 a product/market fit with SaaS with no code, bootstrap, and minimal investment. We then invited two tech founders to join us in 2020, and it took about a year and a half to reach product/market fit on a proprietary platform,” said co-founder and CEO Greg Keane on why it’s now gets a seed round.
Contractors on Weaver’s platform are manually screened by the startup before being admitted to the market, where they are given the opportunity to bid on high-value projects.
They are also subject to ongoing audits by Weaver to assess the quality of their work and detect any other issues, such as early signs of insolvency. Weaver also takes on a problem-solving role in the event of problems during construction.
“Weaver solves a fundamental problem of communication between homeowners and contractors in the following order: 1. sourcing contractors they can trust, and; 2. build confidence in a renovation price,” says Keane. “We will then solve the problems of 3. understanding how to negotiate a contract and 4. eliminating the risk of contractor bankruptcy with fully insured escrow payments.”
“Renovation projects are matched with contractors via an algorithm,” he confirms. “We’ve also built the first true SaaS procurement platform for home renovations, where today users can exchange information through messaging, document sharing and organizing on-site meetings – we’re working on a network effect to get started here.”
Construction is a complex space for startups to disrupt, given that it’s best considered not as a cohesive single market to quickly scale, but rather as a series of separate sub-markets that can have their own workflows and vendors ( and, often, specific legal requirements that must be met).
But that multifaceted landscape may well create opportunities to lean on the necessary nuance and specialism by applying the specificity that a strong software-as-a-service offering can bring.
Notably, Weaver is also targeting a high-end home renovation project segment – where the project size is not only large enough to generate revenue through a contractor success fee, but the risks – for all parties – are likely to increase the demand for vetting and increase centralized accountability. Hence the plan to capture, for example, fully insured escrow payments for homeowners.
Other plans the startup says it has for the seed funding are to add an extra root for contractors in the form of fast payments, and to transition the platform from a desktop cloud-first to mobile-first product — to better align with where user involvement in this part of the home renovation construction market is strongest.
It will also make greater use of renovation pricing data it can capture to create more usability for homeowners – through “intelligent renovation pricing solutions,” as Keane puts it, which aim to give these users better feedback on where their prices compare to. the market.
“We are on track to become the refurbishment price leaders in our market, and we are confident that this will make us the go-to solution for refurbishment price indexing,” he suggests, adding: “We have plans to use this data to build a machine learning algorithm that will accurately calculate the budget and price of home renovations, solving one of the biggest frustrations in the industry today.”
He says the problem is that homeowners are typically under-budgeted (by 10%-30%), because they perform “back of an envelope” calculations “using standard multiples taken from rough averages.” So if Weaver can provide “quick and accurate” pricing information for the specific project from the get-go, homeowners may be willing to pay for it — as data would allow them to save or borrow the right amount before embarking on a major project ( with all the risks and stress that comes with it), or even reconsider a home purchase if it’s predicted to come with a particular type of renovation.
According to Keane, only a minority (40%) of the homeowners use a traditional architect for a renovation project. In addition, he proposes that architects typically introduce only one contractor per project they design (“an architect’s word of mouth network just isn’t big enough”) — so Weaver wants to step in and support homeowners to more easily match the three most common quotes. will want to make sure they get the market price for their project.
The startup is also partnering with third-party firms that create fixed-price architectural plans so that they can offer their services to the ~60% of homeowners who don’t use a traditional architect and so may be looking for that kind of help to make their project a reality. .
Weaver’s business model consists of three components: A success fee from contractors who win a project through the marketplace; a homeowners access fee (or it’s paid by architectural firms) – with tiered pricing based on increasing levels of support; and referral fees from renovation loan providers that Weaver customers can pick up.
While there are growing concerns in the UK about a deepening cost of living crisis – with energy bills set to rise next month when a price cap expires, for example, on top of rising inflation and wider economic concerns related to global and other trade-related events — Keane isn’t worried this will happen Demand for home renovations is slowing as the startup essentially targets its service to the top 1%-5% of earners likely to be offended by the challenges lower-income households face.
“We’re Not Worried” [about the impact of the cost of living crisis on demand for renovations] as our average project is £100-£300k, these are households with >£150,000 incomes and savings built up over many years,” he tells MovieUpdates, going on to suggest there are other factors at play that encourage wealthier households to spend on upgrading their homes, for example in connection with climate problems.
“We see macro-economics pushing more households to renovate to counteract energy gains with well-insulated homes while reducing household emissions. In addition, we expect the UK government to further increase subsidies for home insulation and eco-boilers. to tackle 40% of UK emissions.”
Weaver’s marketplace, which has been live for more than four years now (although has only been alive in its current form since March 2020), has so far processed more than $120 million in construction, with the startup noting that orders placed on the platform in 2021 will have increased by 2.6 times in 2020. About 400 contractors, 300 architectural firms and about 900 homeowners/individual users are registered at this stage.
Weaver will use the start-up funds to expand its footprint in the UK to serve a larger portion of the home renovation market. (Currently, the service covers Greater London, South East England, Birmingham, Manchester and Liverpool.)
Keane says it “ultimately” plans future international expansion — and on that front, it’s eyeing Germany and the US, where he says its research suggests market dynamics are similar to those in the UK. (Although the Victorian home renovations that can be typical of many domestic projects undertaken through Weaver’s platform are probably not the norm as it expands into countries with very different types of housing stock.)
“Our largest investors are based in these two markets, which gives us the network to hire local talent,” notes Keane, adding: “We thrive in metropolitan areas where there is a very fragmented market for contractors and the potential value for our solution is greatest, so we will be expanding outside 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 that focuses on architects and their clients.”