With some of the red tape around accessory dwelling units — casually known as in-law or granny suites — cut away in California, a Los Angeles startup is making a go of designing, permitting, manufacturing and installing custom backyard studios at scale using technology from the automotive and aerospace industries.

  • Los Angeles-based Cover Technologies builds and designs accessory dwelling units.
  • Investment dollars will go toward hiring more software engineers.

With some of the red tape around accessory dwelling units — casually known as in-law or granny suites — cut away in California, a Los Angeles startup is making a go of designing, permitting, manufacturing and installing custom backyard studios at scale using technology from the automotive and aerospace industries.

Cover Technologies Inc. (Cover), a 2016 graduate from Y Combinator’s fellowship program, has just raised $1.6 million in seed funding from big name venture capital firms, including General Catalyst, Khosla Ventures, Fifty Years and Hyperspeed Ventures.

“The investors like the tech that we have built, and they like our approach to building pre-fabricated units,” said founder Alexis Rivas.

Many buyers are looking for homes with in-law suites or accessory dwelling units, whether it’s for family or for home office use, Rivas added, and real estate agents who understand their value can be a resource for clients.

There’s some evidence that homes with such suites are sold at a premium, and that they can add a lot more value than the outlay on a new unit, Rivas said.

One Cleveland homebuilder, James Yeager Homebuilders, said in a cleveland.com article that homes with mother-in-law suites sold faster.

According to Rivas, people are looking to build these units for a number of reasons, whether it be for ailing parents, kids coming back from college or the opportunity to capitalize on their backyard’s unused potential to generate income.

“It could be a guest house or a backyard office for people working from home who want to meet with clients separately rather than meeting with them in their houses,” said Rivas, who is a qualified architect.

How Cover operates

California Senate Bill 1069 made easier for homeowners to add a second dwelling to their property.

Cover’s software helps people determine what kind of space they are allowed to build on their properties, according to the local regulations.

Customers answer a survey of questions about the land they plan to build on and how they envisage using the new living space.

Then they are given design options for a $250 fee. The next step — which includes the permit, site survey and geo-technical analysis — requires a $20,000 commitment.

The units Cover design range from 100 square-foot to 12,000 square-foot homes. The pre-fabricated homes are made with sustainable materials such as bamboo with a steel structure. The emphasis is on sustainability and durability.

The units range from $100,000 to $300,000, which will build a studio or suite space from 250 square feet to up to 700 square feet, said Rivas.

Making a difference in California housing

General Catalyst’s Niko Bonatsos, who is an investor in Airbnb, told techcrunch that he also sees the potential for Cover to help expand the supply of non-hotel lodgings in high demand markets in the U.S.

“This team has architects who can code, and they’re building a serious end-to-end software solution for creating well-designed, custom homes that has the potential to remake the entire housing industry,” said Bonatsos.

Cover’s services are only available in Los Angeles at the moment; Rivas was reticent about where he would go next but agreed other parts of California had a real need.

The company says it is taking pre-orders worldwide.

The investment money will go toward hiring more software engineers with experience in the automotive and aerospace industry, Rivas said.

Email Gill South.

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