Exclusive: Houzz Brings Home $11.6 Million in Series B Funding
Houzz, an online community for homeowners and home renovation professionals, has secured a fresh round of financing as it continues to expand amid an improving renovation market.
Houzz has brought home $11.6 million in a Series B round led by Sequoia Capital and other investors, including earlier-stage investors Don Katz, Gary Ginsberg, Oren Zeev and Amos Wilnai. Alfred Lin, a VC at Sequoia and former top executive at Zappos, will join Zeev and others on Houzz’s board of directors.
Co-founder Adi Tatarko said Houzz has increased its traffic tenfold since its last funding round of $2 million in 2010, the site has also introduced e-commerce features to drive purchases of home goods.
Houzz first launched in early 2009, a few years after Tatarko and her husband, Alon Cohen, purchased a home and had a hard time finding the right contractors for home renovations, even with friends’ referrals. (Despite the wealth of options now at their fingertips through their own site, Tatarko says they haven’t yet completed the renovation of their own home.)
Tatarko and Cohen eventually quit their full-time jobs and focused on building up the site to what it is today — a fast-growing (and slightly addictive) home renovation Web site that consumers can browse to create idea books and where designers, contractors and renovation experts can upload their portfolios to in order to attract more clients.
There are now 30,000 professional profiles on the site, Tatarko says, spanning 50 metro areas in the U.S.; Houzz sees more than 50 million page views a month and 2.5 million uniques. Users of the Houzz iPad app, which has been downloaded a million times, browse for one hour on average.
The site also now offers more options for sharing through social media, as well as virtual price tags on certain items — a lamp, for example, or a love seat in a living-room setting — that will direct a user to a place where those items can be purchased.
Houzz is currently free for consumers and professionals using the site; Tatarko says they plan to keep it that way, generating revenue through a direct-advertising model. Houzz, she adds, is on track to become profitable in the next year.
Houzz’s growth comes as the U.S. home remodeling market is seeing signs of recovery. This follows a 12 percent drop in spending between 2007 and 2009, due to the financial crisis, according to a report from the Joint Center for Housing Studies at Harvard University. Home remodeling fared relatively well compared to new construction in 2009, with remodeling climbing to more than two-thirds of total residential investment; the market for renovations in the U.S. was said to have approached $300 billion in 2010. (The Harvard report does note, though, that all homeowners aren’t kitchen-gutting and paint-slapping-happy: Housing prices are depressed, and a record number of home owners are late on mortgage payments.)
Tatarko says she and Cohen will use the funding to invest in more engineers to continue to build out Houzz.