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A Silicon Valley company looking to remove the vagaries and hassle from sprucing up homes before they hit the market has earned the attention of venture capitalist firm QED Investors.
The company led a $19.5 million Series A for Freemodel to expand its approach to prepaid, fully managed market preparation renovations, according to an announcement sent exclusively to Inman. LL Funds also contributed, as did RWT Horizons, FJ Labs, 1984 Ventures, 1Sharpe Ventures and Crossbeam Venture Partners. Freemodel’s total raised to date is $23 million.
Freemodel, which launched in 2020, handles planning, on-site project management and funding of the construction project, collecting payments and its fees on the back end at closing. It sells only through agents and brokerages, referring any direct leads to regional real estate partners.
“With the increase in interest rates and the slowing real estate market, agents have to go the extra mile to get the best results for their sellers,” said Freemodel CEO and co-founder John Garner. “Freemodel empowers our agent partners to sell a client’s home more quickly and at a higher price without the hassle or upfront cost of managing the renovations themselves.”
New builds and additions are not under the company’s scope of services, according to its website. It tackles kitchens, bathrooms, flooring, painting, windows, roof repair, foundation work, HVAC installation and landscaping.
Freemodel is navigating this new niche of proptech that’s targeting the drastically disintermediated home renovation sector, especially as it relates to presale marketing.
Historically, listing agents would merely recommend updates, such as kitchen cabinets or primary bathroom re-dos to ensure a home is best presented to aspiring buyers. However, the time frame and overall friction of contractor selection, design decisions and cost made the process entirely too burdensome for a family already facing relocation.
Revive and Eano are Freemodel’s colleagues, while Plunk helps homeowners and agents cost model renovations. Other firms Welcome Homes and Ownly, are using technology to target the space at the homebuilder level. Welcome Homes secured a $29 million Series A round in December.
Freemodel’s pre-pay, on-site staffing approach has led to 500 percent revenue growth year over year, the announcement notes. It partners with real estate brokerages as a tech-forward renovation partner and claims to have earned clients $33 million in additional profit.
“Freemodel requires no credit checks and has no pre-determined project budget caps, allowing more flexibility for homeowners to reap the maximum possible profit from their investment,” the company said.
The company provides services in 90 percent of California’s real estate market and is aiming for Florida and Texas in the first quarter on the heels of the Series A. Software engineering will also be a priority as it uses a proprietary system to support its local project teams.
Partner at QED Lauren Morton called Freemodel’s construction “easy button.”
“It’s rare to find a business model in real estate that offers such clear value to its customers in a variety of market conditions,” she said in the statement.