YC, Khosla-backed Atmos lands $12.5M to design customized dream houses • TechCrunch

Atmos, a startup which has constructed an internet market that groups up homebuyers with builders and land builders to design and construct customized houses, has emerged from stealth as we speak with $12.5 million raised in Sequence A funding spherical led by Khosla Ventures.

Based in 2018, San Francisco-based Atmos touts that with its tech, homebuyers are in a position to choose land, design a house inside their finances and approve the design utilizing 3D tech. It then groups up patrons with a “vetted builder associate.”

The startup goals to present patrons extra choices because the nation faces a persistent housing scarcity and through a time when mortgage rates of interest have greater than doubled since final yr. Atmos claims it might additionally assist builders by offering them with ready-to-go patrons versus constructing on spec (with out dedicated prospects) in an unsure market. It additionally says it might assist land builders by permitting them to go direct-to-consumer.

Present backers Bedrock, JLL Spark, YC and OpenAI CEO Sam Altman participated within the financing together with new traders actual property brokerage Keller Williams, Duke Angel Community, Bain Capital co-chairman Stephen Pagliuca and Figma CEO and co-founder Dylan Subject. The corporate beforehand raised practically $2 million in March 2020. It participated in Y Combinator’s summer time cohort that very same yr, after which raised a further $4 million led by Khosla.

“On Demo Day, we obtained a time period sheet from Khosla,” mentioned Nicholas Donahue, CEO and co-founder of Atmos. “Inside two weeks, we’d accepted it.”

Atmos says its know-how permits patrons to see “precisely what might be constructed on any particular lot relying on the dimensions, form and growth necessities.” First, it assists patrons with getting a survey and soil take a look at, after which designing a house based mostly on their particular person preferences. As soon as a builder is solidified, development can start.

“We’re attempting to place extra of the design course of on-line,” Donahue mentioned. “We additionally onboard companions in addition to collect sure native information reminiscent of zoning necessities and typography.”

It additionally checks to ensure development wouldn’t violate any HOA restrictions earlier than a purchaser wastes an excessive amount of time on a undertaking.

The typical value of constructing a house by means of Atmos is about $225/sq. foot. So for a 1,500-square-foot residence, that comes out to about $337,500. That’s low-cost or costly, relying on which market you’re constructing in. Sure choices reminiscent of whether or not a purchaser chooses to construct a one-story ranch residence or a two-story home can influence prices, Donahue provides.

To this point, the startup has constructed six houses and is “engaged on a couple of dozen extra,” he mentioned. It makes cash by charging a 5% service price on the price of development to homebuyers “for due diligence, design, and undertaking administration.” It additionally expenses a $20,000 flat price to builders for locating, vetting and servicing a shopper, in addition to dealing with any of the pre-construction providers they’d in any other case should deal with.

Finally, Atmos has its sights on what it describes as different rising tech markets reminiscent of Denver, Austin, Portland and Salt Lake Metropolis.

In contrast to fellow Khosla portfolio firm Homebound, which raised $70 million earlier this yr and describes itself as a “tech-enabled homebuilder,” Donahue says Atmos is concentrated extra on the pre-construction of a house.

“We’re extra design-oriented, and focus extra on the method that somebody goes by means of to create the home,” he advised TechCrunch. “My perception is that extra folks would construct if it was simply easier and fewer ambiguous, and so they had the power to design a house that’s distinctive to them.”

He believes Atmos’s greatest differentiator in comparison with different startups within the house like Welcome Houses is that it gives “extra flexibility” and freedom within the design section.

Curiously, not like most startups that elevate capital, 26-person Atmos doesn’t plan to make use of its new funds to rent on this market, in line with Donahue. It’s specializing in constructing out its market.

“You will have all of those, like builders and builders which can be functioning in a very popular atmosphere … that ended up buying tons of land on which they normally select to go spec as a substitute of working with a shopper to construct customized,” he mentioned. “We see alternative to assist them unload a few of their over-leveraged belongings.”

Khosla Ventures associate and DoorDash co-founder Evan Moore gained expertise in the true property house having helped the Opendoor crew pre-launch to guide product. He advised TechCrunch through e mail that in his prior work, he spoke with many households shopping for tract houses, that are “the large subdivisions of houses that each one look the identical.”

“Many wished to construct a house customized to their very own wants, however couldn’t work out the place to start out, and couldn’t get certainty of timeline or value,” Moore mentioned. “It was clear to me then that if somebody might present a reliable, clear course of, extra folks would construct customized houses… I feel within the coming years it’ll appear apparent that one ought to be capable of discover obtainable heaps, design houses that work on these heaps per native regulation, and begin your construct — all on-line.”

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