Hover Raises $60M to Revolutionize Property Assessment with 3D Imaging

The U.S. housing market has demonstrated greater stability than many anticipated during the coronavirus pandemic, and a startup developing a computer vision solution to streamline property assessment and repairs is announcing a substantial funding injection as it experiences rapid growth in adoption.

Hover – the company behind a platform that utilizes just eight smartphone photos to generate a 3D model of a property, enabling contractors, insurance providers, and others to evaluate repairs, estimate costs, and order necessary materials – has secured $60 million in a new funding round.

This Series D investment values the company at $490 million post-money and notably includes several strategic investors. Leading the round are three of the largest insurance companies in the United States – Travelers, State Farm Ventures, and Nationwide – alongside building materials leader Standard Industries and other unnamed building technology companies. Existing investors Menlo Ventures, GV (formerly Google Ventures), and Alsop Louie Partners, as well as new investor Guidewire Software, also participated in this funding.

This latest funding brings Hover’s total raised capital to over $142 million. In comparison to its previous Series C round in 2019, when the company was valued at $280 million (according to PitchBook data), this represents a significant increase in valuation.

The current funding, the increased valuation, and the interest from insurance companies follow a period of substantial growth for Hover. Founder and CEO A.J. Altman shared that the startup generated approximately $1 million in revenue in 2016 and is now projecting an annual run rate “exceeding $70 million,” with insurance companies and large business partners driving the majority of this expansion.

Established in 2011, Hover initially gained recognition among homeowners and small contractors working on residential repairs, such as roofing and structural fixes. The company’s innovative contribution to the market was software that simplified the often-complex and fragmented home repair process by integrating it with smartphone capabilities – its camera, sensors, and app functionality.

Essentially, the platform empowers anyone with a standard smartphone camera to capture several images of a space (up to eight), which are then combined to create a detailed 3D representation for more accurate job assessment.

These 3D images are more than just visual representations; they are dynamically encoded with data regarding materials, dimensions, sizes, and other critical information needed for project completion. A contractor utilizing the Hover app can establish a system where these images automatically generate detailed, priced quotes, including material lists and project timelines, for potential clients. (Altman notes this is a significant improvement over the informal, “back of the business card” pricing common in many jobs.)

Currently, Hover also functions as an e-commerce platform, allowing builders to order the necessary parts for these projects.

The company’s success is partly attributable to its digitization of a traditionally offline and opaque process within a highly fragmented market, comprising approximately 100,000 home repair businesses in the U.S.

“The home improvement sector was largely untouched by online solutions,” Altman explained. “For instance, obtaining a cost estimate for a new roof wasn’t straightforward, as it required someone to take numerous measurements of the house, estimate labor time, and so on. Hover developed a system that transforms photos into all of these answers.” Altman also stated that the app currently has around 10,000 contractor users, indicating considerable potential for further growth.

Altman mentioned that in its early stages, the company encountered challenges in convincing people of the value of an app that allowed homeowners to take pictures of property issues to initiate the repair process.

This was because many builders and their partners considered it their responsibility to assess the situation, not their clients'.

However, this perception has shifted significantly, particularly over the past year, as the global health pandemic prompted many to minimize in-person interactions to curb the spread of the virus.

“Eliminating the need for on-site visits is a major benefit, but we spent considerable time persuading some stakeholders of this before COVID-19,” he said. “Providers – whether insurance companies or contractors – were hesitant to involve homeowners in this process.” He noted that this has changed considerably “with the COVID experience,” with many now actively requesting this option.

While smaller contractors currently contribute the majority of Hover’s revenue, the insurance segment is growing at a faster rate, with large firms integrating their apps with Hover’s, enabling customers to submit photos via the Hover app that are automatically sent to the insurance company’s app to initiate the claims process.

“It’s important to us that we provide our customers with the best possible experience, and Hover’s technology helps us to do that by creating a simpler, faster and more transparent claims process,” said Nick Seminara, executive vice president and chief claims officer of Travelers, in a statement. “We see a tremendous opportunity for Hover in the insurance industry, and we’re pleased to continue our partnership and invest in their future.”

Looking ahead, the company envisions numerous applications for its technology. Hover is already working on commercial buildings and plans to expand into interior projects, including home design and decoration.

The concept of digital “twinning” – creating digitized visualizations of physical spaces for analytics and process improvement – is utilized across various industries, including mapping and logistics, automotive, medicine, aerospace, defense, gaming, and more. This provides Hover, which has already secured 35 patents and continues to innovate, with a broad range of potential growth opportunities.

However, even focusing on the property market offers significant potential. For example, the technology could integrate with home sales companies, enabling them to market properties – including fixer-uppers – with detailed renovation plans. It could also connect with the extensive e-commerce landscape of home furnishings and electronics retailers.

Many of these companies, such as Ikea and Houzz, have already invested in technologies like Apple’s AR platform to enhance user experience, demonstrating an appetite for further innovation.