Khosla Ventures, Pear VC triple down on Honey Houses, a sensible strategy to rent a handyman

Apparently there is a great demand for on-call craftsmen.

Khosla Ventures and Pear VC just tripled their investment in Honey Homes, which provides a dedicated handyman to take care of all the tasks on a homeowner's to-do list. The company raised $9 million in a Series A funding round last June.

Era Ventures led the startup's most recent capital raise, an additional $9.25 million in funding that CEO and co-founder Vishwas Prabhakara called “an upside round.” (PitchBook estimated the startup's value at $39 million last June, though the company itself said that was “not accurate.”) In total, Honey Homes has raised $21.35 million in venture capital since its inception.

So what was the reason for the latest capital injection? A surge in member adoption. The company announced last fall that it had doubled its membership to “well over 1,000 members” in three months. It also grew annual recurring revenue by 3.6x by 2023. While the company declined to provide specific revenue numbers, Prabhakara said the company expects to “do the same and hit eight-digit ARR in 2024.” (Eight-digits is $10 million, of course.)

“Our team visits over 150 homes every day,” he added.

Husband and wife team Vishwas Prabhakara (Yelp's first CEO) and Avantika Prabhakara (former marketing director at Opendoor, Trulia, and Zillow) co-founded Honey Homes in 2021 with Katie Pham and Rory O'Connell. The startup, which launched with its first 10 beta customers in August of that year, hires the handyman as part of its staff. The handyman works as an employee to ensure that work is done consistently in a person's home.

Homeowners pay Honey Homes a flat fee for the convenience of an “end-to-end” membership-based service through the app. This fee ranges from $250 to $395 per month depending on location, although there are discounted annual plans available.

The way it works is that members are assigned a dedicated tradesman who comes by at least once a month to take care of renovations and preventative maintenance. Because employees are permanent, they also receive benefits like parental leave and paid vacation, a rarity in an industry that has traditionally relied on contract workers. However, if someone wants to try out different contract workers for variety, they have that option too.

Honey Homes is currently available to single-family homeowners in the San Francisco Bay Area (including the city itself) as well as much of the Dallas-Fort Worth region. It recently launched in Los Angeles and is currently expanding there as well, with plans to expand further in Texas as well.

“We cover about five times more households in our service area than we did a year ago,” said Vishwas Prabhakara.

Honey Homes only launched in San Francisco earlier this year, but according to Vishwas Prabhakara, this market is currently the fastest growing.

“The city is a different caliber [than the suburbs],” he said. “There are parking issues, there are crime issues, there's a lot to think about. But now it's actually kind of our crown jewel, our fastest growing market.”

The startup is also adding new features, such as AI, to streamline workflow for its team of tradesmen and provide more “maintenance requests on autopilot.”

Interestingly, DoorDash co-founder Evan Moore sits on Honey Homes' board of directors, and another DoorDash veteran, Andrew Ladd, was hired last year to spearhead Honey Homes' product development.

Moore told TechCrunch last year that he believes Honey Homes is different from many other consumer startups in the home services space that simply connect homeowners with potential providers or “act as a concierge.” Competitors include Angi, TaskRabbit and Thumbtack, among others.

According to Vishwas Prabhakara, the company decided to pursue an extension instead of a Series B after concluding that it needed less capital to become profitable than previously expected. (The company aims to be profitable in the next few years.) In addition to membership revenue, the average homeowner spends over $750 per year on additional services provided by the service, such as purchasing replacement parts.

Honey Homes currently employs 75 people and has doubled its team of craftsmen from 25 to over 50.

Clelia Peters of Era Ventures said she chose to invest in Honey Homes because “high-quality home maintenance services from a dedicated handyman were typically reserved for only the wealthiest homeowners or those who owned condos and apartments with on-site caretakers.”

She believes the need for Honey Homes' offering will be even greater in a world where homeowners are required to stay in and maintain their homes for longer periods of time (due to the lock-in effect caused by skyrocketing interest rates).”

“In addition, we expect the trend towards home electrification to lead to greater demand for reliable advice and installation services. Honey Homes is well positioned to provide these services,” she added.