Houzz Raises $35 Million to Connect Architects and Homeowners

Courtesy Houzz

There are over a million home design photos to browse and save, to create your dream space.

Like so many entrepreneurs, Adi Tatarko and her husband, Alon Cohen, got into the startup game after they couldn’t find a solution to their problem.

The Israeli couple wanted to renovate their newly-purchased Palo Alto home, but picking the right contractor and architect proved difficult. Tatarko, who was working for an investment company at the time, said the team they hired came up with a plan that didn’t at all match what they wanted.

So in 2009, after that headache, she and Cohen, an engineer at EBay at the time, started a site to match homeowners with professional architects and interior designers. The company, Houzz, now employs 60 people and its website serves 12 million users a month with a database of 160,000 professionals across the U.S. and Canada.

The popular site has also caught the eye of high-profile Silicon Valley investors. Houzz announced today that it raised $35 million from New Enterprise Associates and GGV Capital, with participation from Sequoia Capital, Kleiner Perkins Caufield & Byers and Comcast Ventures. Additional investors include Yammer founder David Sacks, who discovered the site while renovating his own home, and longtime startup backer Oren Zeev. The company has raised a total of $48.6 million.

“Most of us are not designers or architects,” Tatarko, 40, said in an interview. “We don’t have all the information and don’t understand the terminology. With Houzz, the entire process became way easier for homeowners and a great tool for professionals.”

In addition to funding the startup’s expansion, the fresh capital may help Houzz fend off  future competitors. Recent fast-growing consumer web companies such as Airbnb, Pinterest and TaskRabbit have quickly attracted clones in the U.S. and abroad. A big balance sheet can ease that risk.

Along with the financing, Houzz announced the availability of a new premium marketing product that lets professionals promote their services to local homeowners. The subscription service was released in San Francisco, Los Angeles and Washington, D.C., late last year and will now start to roll out more broadly, Tatarko said. The premium tool adds to the brand advertising Houzz started about a year ago, which lets professionals target consumers based on their interests and needs. Tatarko said the company is unlikely to seek future funding and is on its way to profitability.

Houzz plans to use the capital to hire more engineers and designers as it at least doubles headcount in the next year to meet rising demand from its growing community. Whether homeowners want the top designer of eclectic kitchens in Atlanta or best wall painter of traditional home offices in Baltimore, Tatarko wants Houzz to be the single destination for photos, reviews and recommendations. All the things she wishes she had when she was remodelling.

 

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