Palo Alto-based home remodeling and design startup Houzz Inc. said it closed a $400 million Series E funding round led by Iconiq Capital. Other new investors include Wellington Management Company, while existing investors Sequoia, Zeev Ventures and GGV Capital also participated in the financing.
Houzz Israeli co-founders Adi Tatarko and her husband Alon Cohen launched the site in 2009 at their kitchen table as a result of their own remodeling project. The Silicon Valley power couple grew their team by more than 50 percent in 2016 and now has more than 1,400 employees at 11 offices around the world. What started as a side project has become a community of more than 40 million homeowners, home design enthusiasts and home improvement professionals—across the country and around the world.
“Our focus on providing the best technology and user experience for home renovation and design enabled us to turn a side project into a global company and to determine, at each stage of our growth, the best path forward for Houzz,” said Houzz CEO Adi Tatarko. “We look forward to further expanding our community and our offering around the globe with support from great new partners and existing investors.”
Houzz Industry Solutions, the company’s local marketing subscription service, which helps tens of thousands of brands and home professionals connect to and do business with homeowners, scaled significantly in 2016. The program expanded to over 150 markets in six countries outside the U.S. last year due to demand from both service providers and brands. Houzz will expand its Industry Solutions offering to all countries where it operates.
The Houzz Marketplace also grew significantly in 2016 and the company will expand the service outside of North America. There are now over nine million products available for purchase on Houzz from over 20,000 sellers. Homeowners, renters and home professionals are buying a wide range of products — from items for major remodeling projects and custom home builds, such as vanities, bathtubs and tiles — to furniture and small decor items. To support its growing community of shoppers and vendors, Houzz opened a new customer experience center in Nashville, Tennessee in January 2017. The company also recently launched the Houzz Trade Program to provide industry professionals with multiple ways to profit from purchasing and recommending products in the Houzz Marketplace.
“Houzz’s authentic, product first, customer first focus has propelled them to become the undisputed innovator and leader in the global home renovation and design industry. No other company has the community, technology, breadth or depth that Houzz has created, as well as a substantial, high growth business that has been built based on demand from homeowners, home professionals, brands and vendors,” said Will Griffith, partner at Iconiq Capital. “We are thrilled to join the Houzz family and help the company transform how people around the world design, collaborate, renovate and shop for their homes.”
In 2016, Houzz introduced new technologies to enhance the home design and shopping experience: Sketch, a communication and collaboration tool; View in My Room, a visualization tool; and Visual Match, which applies deep learning to the 14 million photos on Houzz. In May 2017, the company launched View in My Room 3D within its app for iPhone and iPad, which enables people to see products in 3D, within their own homes, before they buy. Shoppers that use this tool are 11X more likely to purchase.
Photo: Houzz co-founders Adi Tatarko and Alon Cohen. (Courtesy, Houzz)