Welcome Homes swapped custom builds for move-in-ready models — and sales sextupled

A New York company that lets buyers purchase new homes online, running a three-sided marketplace of buyers, builders and banks without owning land or unsold homes.

Nearly $35M raised since inception, including a $29M-plus Series A led by Era Ventures with Parker89, Montage Ventures, Foundamental, Global Founders Capital, Activant Capital and others, closed September 2022.

In May 2020 three DigitalOcean co-founders — Alec Hartman, Mitch Wainer and Ben Uretsky — started Welcome Homes to let people design and build new homes online, concluding homebuilding was not that different from their old business of educating customers and selling simplicity.

The first product was custom homes, but Hartman says potential customers actually wanted the opposite — fewer choices. The team revamped to a variety of pre-designed, move-in-ready model homes, going live in March 2021, and says home sales sextupled in 2022. In conjunction with the Series A, Era Ventures' Clelia Warburg Peters joined the board, calling the capital-light model a 'neo-builder' marketplace.

Custom homes were the original pitch, but Hartman says customers told the team they wanted the opposite — fewer choices — and the pivot was made quickly.

Move-in-ready homes with guaranteed pricing sit between production homebuilding (master-planned communities) and custom builds, which most consumers find inaccessible on price and timeline.

Carrying no land or unsold inventory, unlike traditional homebuilders, lets the company scale faster, according to investor Clelia Warburg Peters.

The US single-family homebuilding market is worth $250–400B a year with chronic undersupply, and technology can automate back-office work builders find burdensome.

More choice is not always the product: when buyers hesitate, cutting options can be the pivot that makes the marketplace move.

As of 12 January 2023 Welcome Homes operated in five states with 40 staff and planned to use the Series A to hire, develop its proprietary land technology, design new home models and expand across the US. Hartman described work on imaging to detect walk patterns and rules-based systems for municipal variances, saying 'we're really more of a tech company than a tech-enabled homebuilder'. Sales growth figures were self-reported; no third-party verification existed in the coverage.