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

Atmos, a startup which has constructed a web-based 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 capable of choose land, design a house inside their finances and approve the design utilizing 3D tech. It then groups up consumers with a “vetted builder associate.” 

The startup goals to provide consumers 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 12 months. Atmos claims it might additionally assist builders by offering them with ready-to-go consumers 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.

Current backers Bedrock, JLL Spark, YC and OpenAI CEO Sam Altman participated within the financing together with new buyers 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 almost $2 million in March 2020. It participated in Y Combinator’s summer season cohort that very same 12 months, after which raised an extra $4 million led by Khosla.

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

Atmos says its expertise permits consumers to see “precisely what might be constructed on any particular lot relying on the scale, form and growth necessities.” First, it assists consumers 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, building can start.

“We’re making an attempt to place extra of the design course of on-line,” Donahue stated. “We additionally onboard companions in addition to collect sure native knowledge akin to zoning necessities and typography.”

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

The typical price of constructing a house by way 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 alternatives akin to whether or not a purchaser chooses to construct a one-story ranch residence or a two-story home can impression prices, Donahue provides.

Thus far, the startup has constructed six houses and is “engaged on a couple of dozen extra,” he stated. It makes cash by charging a 5% service charge on the price of building to homebuyers “for due diligence, design, and venture administration.” It additionally fees a $20,000 flat charge to builders for locating, vetting and servicing a consumer, in addition to dealing with any of the pre-construction companies they might in any other case need to deal with.

Ultimately, Atmos has its sights on what it describes as different rising tech markets akin to Denver, Austin, Portland and Salt Lake Metropolis.

In contrast to fellow Khosla portfolio firm Homebound, which raised $70 million earlier this 12 months 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 way of to create the home,” he informed TechCrunch. “My perception is that extra individuals 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 largest differentiator in comparison with different startups within the area like Welcome Properties is that it affords “extra flexibility” and freedom within the design section.

Apparently, not like most startups that increase 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’ve all of those, like builders and builders which might be functioning in a highly regarded surroundings … that ended up buying tons of land on which they often select to go spec as an alternative of working with a consumer to construct customized,” he stated. “We see alternative to assist them unload a few of their over-leveraged property.”

Khosla Ventures associate and DoorDash co-founder Evan Moore gained expertise in the actual property area having helped the Opendoor workforce pre-launch to steer product. He informed TechCrunch by way of e mail that in his prior work, he spoke with many households shopping for tract houses, that are “the large subdivisions of houses that every one look the identical.”

“Many wished to construct a house customized to their very own wants, however couldn’t determine the place to begin, and couldn’t get certainty of timeline or value,” Moore stated. “It was clear to me then that if somebody may present a reliable, clear course of, extra individuals would construct customized houses… I believe within the coming years it’ll appear apparent that one ought to have the ability to discover out there tons, design houses that work on these tons per native regulation, and begin your construct — all on-line.”