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Made Renovation Raises $9M Seed For Tech-Enabled Bathroom Remodels






In hot real estate markets such as the Bay Area, finding a contractor who will do a small remodeling job at an affordable price can be a challenge.

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A new startup is emerging from stealth today with the goal of helping solve that problem.

Made Renovation, which manages bathroom remodeling projects on behalf of homeowners, has raised $9 million in a seed round led by Base10 Partners. Felicis Ventures, Founders Fund and some angel investors also participated in the financing.

Serial entrepreneurs Roger Dickey (who previously co-founded Gigster) and Sagar Shah (who previously founded Quad) founded San Francisco-based Made Renovation last year with the Bay Area’s construction talent shortage in mind. It’s been operating in “stealthy beta” since June. It’s up to now selling more than 10 projects a month with an average project price of around $30,000, according to Dickey. 

How it works

Made Renovation essentially handles a bathroom remodel project on behalf of a homeowner from start to finish. Eventually, the startup will expand to other markets with a supply-demand imbalance, but for now it’s only focused on the Bay Area.

“Not only do we handle everything for customers from design and architecture to procuring materials and pulling permits, we also match them with a contractor and then oversee the project to make sure it goes smoothly,” Dickey said in a phone interview.

Made Renovation also claims to perform a bathroom remodel more affordably than if a homeowner worked directly with a general contractor. Many contractors might be reluctant to take on a smaller project due to the lower profit margin.

Dickey himself said he called 30 to 40 contractors when working on a small bathroom remodel. But it was tough to find anyone considering that a higher cost of living has pushed out many contractors.

“People wouldn’t return my calls, or said they only would take projects with a $100,000 to $200,000 minimum,” he said. “We’ve also had customers who were quoted $75,000 for a 40-square-foot bathroom, which amounts to nearly $2,000 a square foot. We offer a guaranteed fixed price, which customers appreciate because they don’t have to worry about project overruns.”

Niche focus

Eventually, the 15-person startup may branch out, but for now it is “happy being bathroom experts.”

“Customers like knowing that we specialize in bathrooms,” Dickey told Crunchbase News.

In conjunction with the seed funding, Made Renovation also unveiled today a bathroom design showroom at 2108 Chestnut Street in San Francisco where “people can visualize their bathrooms with virtual reality.”

The company plans to use its new capital to grow its delivery and technology teams.

“For us, it’s mostly process automation,” Dickey said. “You can think of us a construction firm that churns out a high volume of relatively similar projects. Since the bathrooms we’re doing have similarities, our customers can save money.”

For TJ Nahigan, co-founder and managing director of Base10 Partners, Made Renovation “is creating a 10 times better solution to the status quo” in the multibillion-dollar renovation industry. He claims much of the industry is made up of “DIYers,” or homeowners doing the work themselves.

Sundeep Peechu, managing director at Felicis Ventures, previously worked with Dickey when his firm invested in Gigster.

“At this stage, a high percentage of conviction is usually about the team. We’re huge believers in Roger,” he wrote via email. Plus, “the renovation market in the US is 7 times larger than the ride-hailing market. A large portion of that is smaller renovation projects that Made is making more efficient.”

We’ve written plenty about startups focused on improving efficiencies and processes within the construction industry raising money, but they have mostly focused on larger projects. More recently, though, we also covered Homebound, which essentially serves as a tech-enabled general contractor. That startup has developed tools to track and manage 370 unique tasks associated with building a home, and recently raised $35 million in a round led by Fifth Wall Ventures.

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Source: Crunchbase News

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A look at Made Renovation, which just raised $9 million in seed funding to zero in on bathroom remodels

Made Renovation, a new, San Francisco-based company, thinks it has found a profitable way to help homeowners get done something that busy general contractors in the Bay Area won’t otherwise make time for, which is bathroom remodels.

Why they typically pass on these: they have too many entire homes, or, at least, entire floors, to build for affluent regional homeowners who’ve kept the construction industry buzzing for years.

It’s a problem that founders Roger Dickey, who previously co-founded Gigster, and Sagar Shah, who previously founded Quad, think they can solve through technology, naturally. Their big idea: create bathroom templates that customers can customize but whose scope and costs are generally understood, line up these customers, then hire general contractors who are willing to focus only on these bathrooms.

It’s an idea that’s picking up traction with these GCs, says Dickey, who explains it this way: “General contractors generally see net margin of 3%” no matter the size of the job, owing to unforeseen hurdles, like pipes that suddenly need to be rebuilt, drains that need to be dug and materials that don’t ship on schedule.

In addition to timing issues, GCs are also often dealing with frustrated building owners who might underestimate a project’s costs, particularly in California, where construction bills often cause sticker shock.

Made Renovation sees an opportunity to make both the lives of GCs and homeowners easier. Through pre-negotiated pricing, volume and materials handling (it right now rents part of a warehouse where it receives goods), it’s promising GCs a “reasonable margin” so they can not only pay their crews but live a higher quality of life themselves.

Meanwhile, per the plan, customers need only choose from the company’s “modern” collection, its more traditional “heritage”design or its “artisan” collection — all of which can be customized — then sit back while their long-neglected bathrooms are remade.

Whether Made Renovation can pull off its grand vision is a giant question mark. The construction industry is nothing if not messy, and in addition to convincing GCs of its merits, Made Renovation — like any marketplace company — has to strike the right balance between customer demand and supply as it gets off the ground.

In the meantime, investors clearly think it has promise. Led by Base10 Partners and with participation from Felicis Ventures, Founders Fund and some individual investors, the company has already raised $9 million in seed funding across two tranches.

Part of that capital is on display right now in San Francisco, where Made Renovation today opened its doors to customers who want to check out its design ideas and, if all goes as planned, will begin lining up their own home improvement projects. Customers simply pick a collection, Made Renovation then puts together a “mood board” of materials from that collection, sends out a 3D rendering of what to expect, then goes into build mode with its GC partners.

As for what happens when that build goes awry, Dickey says Made Renovation has it covered. Most notably, while it guarantees the work to its own customers, the GCs with whom it works guarantee their work to Made Renovation.

Dickey also notes that while the startup “may lose money on some projects,” he stresses there are caveats that customers agree to at the outset. Among these, he says, “We can’t X-ray their walls and see if they don’t have wiring up to code. We don’t cover dry rot in walls.” Technology, suggests Dickey, can only do so much.

If you’re in the Bay Area and want to check out its new storefront, it’s on Chestnut Street in SF, in the city’s Marina district. The company hopes to perfect its model in the Bay Area, says Dickey, then expand into other regions. As for why Made Renovation decided to tackle one of the most challenging U.S. markets first, he suggests it’s the best way to test its mettle. “I like the idea of starting a company here, because if we can make it work here, I think we can succeed anywhere.”

Source: TechCrunch