Block Renovation Secures $50M for National Expansion

Block Renovation Secures $50 Million to Revolutionize Home Improvement

Block Renovation aims to participate in every home renovation project across the United States, following a successful $50 million Series C funding round spearheaded by SoftBank Vision Fund 2.

Addressing a Fragmented Market

The New York-based firm is establishing a strong presence within the $450 billion U.S. home renovation sector. It provides a digital platform designed to streamline and simplify the renovation process for both homeowners and contractors – a process often fraught with challenges.

According to Block Renovation co-founder Koda Wang, a significant shift is occurring in the homebuying demographic, with half of all purchasers now under 36 years old. Furthermore, a substantial 87% of these buyers opt to engage professionals for their renovation needs rather than undertaking DIY projects.

Wang asserts that the current state of home renovation is significantly flawed. Homeowners frequently rely on informal arrangements, lacking clarity regarding project scope, cost, and timelines.

Challenges Faced by Contractors

The company’s research revealed similar difficulties on the contractor side. While contractors generally enjoy the construction work itself, they also bear the responsibilities of running a small business.

This necessitates expertise in areas such as sales, marketing, billing, and procurement – often requiring them to build these capabilities from the ground up for each individual project, Wang explained.

A Productized Renovation Experience

Recognizing evolving consumer expectations, Block Renovation “productizes” the home renovation experience. It packages all necessary components for both homeowners and contractors, facilitating clear communication throughout the project lifecycle.

Contractors can utilize the platform to share photographic updates on project progress, keeping homeowners informed at every stage. This transparency builds trust and manages expectations effectively.

Data-Driven Cost Estimation

Homeowners often lack accurate data regarding renovation costs, particularly when modifications are requested during the project, such as relocating fixtures or adding structural elements, Wang noted.

“We have addressed this by compiling extensive data points, enabling us to provide estimates with 5% to 10% accuracy,” he added.

Investment Details and Key Backers

SoftBank was joined in this funding round by existing investors including Giant Ventures, NEA, Morningside, and Lerer Hippeau. Additional investors included Obvious Ventures, Rainfall Ventures, Firstminute Capital, BoxGroup, SV Angel, and a diverse group of individual investors.

Notable individual investors include interior designer Kelly Wearstler, designer Ann Sacks, Opendoor co-founder and CEO Eric Wu, Angi CEO Oisin Hanrahan, and Zillow co-founder Spencer Rascoff.

This latest investment brings the company’s total venture funding to $104 million since its inception in 2018 by Wang and Luke Sherwin.

Rapid Growth and Future Plans

Block Renovation is experiencing substantial growth, with the company reporting metrics that are “doubling and tripling” year-over-year, according to Wang. This Series C round follows a $40 million Series B round announced just four months prior.

Recent expansion includes adding Los Angeles to its service areas and launching a kitchen remodeling feature, building upon its initial focus on bathroom renovations. The company also provides free software, services, and data resources for contractors.

Wang stated that the Series C funding wasn’t actively pursued, but the opportunity to collaborate with Lydia Jett, a partner at SoftBank Investment Advisors, was highly appealing. Jett has a proven track record of successful investments in companies like Coupang and Flipkart.

SoftBank’s Perspective

“The increasing prevalence of remote work has fueled greater interest in home improvement projects, yet many potential customers are deterred by the inherent complexity and expense,” stated Jett in a press release.

“Block Renovation is fundamentally changing this process with a user-friendly and transparent digital platform that covers all phases, from initial planning to final construction. We are excited to partner with Koda and Luke to make home renovations more predictable and accessible for everyone.”