ozonea startup that has built an online marketplace that combines homebuyers with builders and land developers to design and build custom homes, has emerged from the stealthy form of the day. today with $12.5 million raised in a Series A funding round led by Khosla Ventures.
Founded in 2018, San Francisco-based Atmos advertises that with its technology, homebuyers can select land, design homes within their budget, and approve designs using 3D technology. . It then groups buyers with a “moderated builder partner.”
The startup aims to give buyers more options as the nation faces a persistent housing shortage and at a time when mortgage rates have more than doubled since last year. Atmos claims it can also help builders by providing them with ready-to-go buyers instead of building to spec (no customer commitment) in an uncertain market. . It also says it can help land developers by giving them direct access to consumers.
Existing backers Bedrock, JLL Spark, YC and OpenAI CEO Sam Altman joined the funding along with new investors real estate brokerage Keller Williams, Duke Angel Network, Bain Capital co-chair Stephen Stephen Pagliuca and Figma CEO and co-founder Dylan Field. The company previously raised nearly $2 million in March 2020. The company joined Y Combinator’s summer team that same year and later raised another $4 million led by Khosla. head.
“On Referral Day, we received a terms sheet from Khosla,” Nicholas Donahue, CEO and co-founder of Atmos said. “Within two weeks, we accepted it.”
Atmos says its technology allows buyers to see “exactly what can be built on any given lot depending on size, shape and development requirements.” It first assists buyers in surveying and testing the land, then designing a home based on their personal preferences. Once a builder is solidified, construction can begin.
“We are trying to bring more design processes online,” says Donahue. “We also have partners on board as well as collect some local data such as zoning and typography requirements.”
It also checks to make sure construction won’t violate any HOA restrictions before buyers waste too much time on a project.
The average cost to build a home through Atmos is about $225/square foot. So, for a 1,500 square foot home, that costs about $337,500. That’s cheap or expensive, depending on the market you’re building in. Certain choices, such as whether a buyer chooses to build a single-story farmhouse or a two-story home, can affect costs, adds Donahue.
So far, the startup has built six homes and is “making a few dozen more,” he said. It makes money by charging 5% service charge on construction costs for homebuyers “for project appraisal, design and management.” It also charges a flat $20,000 fee to builders to find, inspect, and service customers, as well as handle any pre-construction services they will have to deal with.
Ultimately, Atmos has targeted what it describes as other emerging tech markets such as Denver, Austin, Portland, and Salt Lake City.
Unlike Khosla’s Homebound portfolio company, raised 70 million USD Earlier this year and describing itself as a “tech-enabled home builder,” Donahue said Atmos is more focused on pre-constructing a home.
“We’re more design-oriented and more focused on the process someone goes through to create a home,” he told TechCrunch. “I believe there would be more builders if it were simpler and less ambiguous, and at the same time they were able to design a unique home for themselves.”
He believes that Atmos’ biggest difference from other startups in the field like Welcome Homes is that it offers “more flexibility” and freedom in the design phase.
Interestingly, unlike most startups that raise capital, 26-person Atmos doesn’t plan to use its new money to hire in this market, according to Donahue. It is focusing on building its market.
“You have all these things like builders and developers operating in a very hot environment… they ended up buying tons of land that they normally choose to build on to specs instead. for working with clients to build on demand,” he said. “We see an opportunity to help them unload some of their overused assets.”
Khosla Ventures partner and DoorDash co-founder, Evan Moore, gained real estate experience helping the Opendoor team lead the product ahead of launch. He told TechCrunch via email that in his previous job, he talked to many families buying sugar homes, which are “large subdivisions that look alike.”
“Many people want to build a home custom-made for their own needs, but can’t know where to start and can’t be sure of the timing or the price,” says Moore. “Back then, it was clear to me that if someone could provide a transparent, trustworthy process, there would be more custom builders… I think in the years to come, it’s clear that people will. will be able to find available plots of land, design suitable houses. on those lots according to local regulations and start your construction — all online.”