Home renovation is exciting. You can dream big and have fantasies of what the living room will look like, but at the end of the day it is not all fun and games. A lot of calls need to be made, a lot of money needs to be put aside, and most importantly, a lot of time will be used. For such an important decision, you want to find the best contractors so that you can actualize your dream home. The place to start? Sweeten. The self-proclaimed renovation matchmakers all have vast experience in the field and have recently been funded to keep doing a great job.
Founder and CEO Jean Brownhill Lauer tells AlleyWatch about the funding process as well as the company’s future plans.
Who were your investors and how much did you raise?
Sweeten closed $3.5 million in Series A funding led by Navitas Capital. Other prominent investors in the round include Overnight Capital and Gotham Gal Ventures.
Tell us about your product or service.
Sweeten is a marketplace that matches home renovators with the best general contractors for their project, using algorithms to provide highly personalized matches from Sweeten’s curated network.
We accomplish this by aggregating the best general contractors who have passed our 10 point inspection and interview, and then provide them with the best renovation deals that have been prequalified for budget and scope alignment, financing, and opportunity. Once our homeowners begin work with our contractors, we monitor their projects for quality and ask them to rate our contractors’ performance at the end. This is because we hold our contractors accountable and their rating affects their Sweeten deal flow.
What inspired you to start the company?
All of Sweeten’s founders are trained architects and have over 20 years of combined experience practicing architecture in New York City. It was hard for even us to find reliable general contractors to bid on our firms’ projects, let alone freelance projects we would do for our friends and realized that if it’s hard for us, it must be even harder for non-architects to find good contractors.
What market you are targeting and how big is it?
Sweeten is targeting a $300B home renovation market here in the United States. In New York City alone it’s $12B, and we’re set to expand to new cities along the east and west coasts. Similar to the company’s offering in New York, Sweeten will offer its industry expertise and execution tools to complement the local craftsmanship that contractors bring to each Sweeten renovation project. What is exciting is the top 5 major cities between each location have home renovation markets starting at $3 – 10B each.
What was the funding process like?
We learned early on that finding the right investor to partner with was more than just cachet, an investment thesis and portfolio. It was also about the personality of the people we would end up working with. We used this to filter many early conversations and quickly landed with our lead VC, Navitas Capital. Travis Putnam, the Managing Partner there, is the perfect fit for us as he understands the nuances of the general contractor industry and brings ideas on how to overcome the challenges to transform.
What are the biggest challenges that you faced while raising capital?
Often Sweeten was compared to other lead gen or shelter sites that feature general contractors and are more prominent. The biggest challenge was having investors understand that our model takes on the home renovation challenge by first focusing on the needs of general contractors – not homeowners – by providing highly pre-qualified renovation deals that are curated for them. These contractors are our repeat customers as they use our platform weekly (not homeowners who usually do major renovations only once every few years).
What factors about your business led your investors to write the check?
The unit economics of our model just work, and we have been the only platform to successfully aggregate the best general contractors and provide them with large deals. To date, the top 10% of Sweeten contractors have won over $500K in deals each, with the top contractors having won over $1M each. Because of this, we are proud of our 100% contractor retention rate since launch. With average deal sizes currently being won at the $70K mark, we’re the only platform actively providing deal flow of this size to contractors.
What are the milestones you plan to achieve in the next six months?
Over the coming months, the new funding will enable Sweeten to expand to new cities beyond New York, add a network of local project managers to help homeowners to manage their renovations and assist them with schedules and budgets, and offer general contractors even more opportunities to secure highly profitable business leads as our deals are beginning to average $100K each.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
When developing your business model, conduct as many tests as possible in analog format before going to code. So many resources and so much time can be saved by being scrappy and understanding what your users will actually use before committing it to code. Test, test, test.
Where is your favorite place to enjoy the fall weather in the area?
A nice walk along the Hudson River in the early evening, just before dusk.
