Software Company Raises $53M to Further Digitize Homebuilding

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Originally Published by: Builder Online — February 15, 2024
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The startup behind the Homebuilding Cloud has raised $53 million in Series B funding, powered by over 18 construction, building products manufacturing, and distribution companies. Higharc, founded in 2018, is a connected platform that helps home builders transform how they design, sell, and build new homes and communities.

“Higharc exists to serve the hardworking teams who build homes across America—they’ve been stuck using 40-year-old software that wasn’t designed with their needs in mind, and they deserve better,” Marc Minor, CEO of Higharc, said in a release announcing the funding. “This additional capital reinforces Higharc’s long-term commitment to the success of our customers and to unlocking digital transformation for the entire home building industry.”

Minor told BUILDER Higharc was born out of the idea of applying digital manufacturing—the idea that you can represent a product and manufacturing process in a digital form and have that information travel across the whole value chain—to the home building industry.

“If homes are products, you should be able to design them once and then have them distributed to many places, and, when they go to many places, they should be able to change,” Minor told BUILDER. “In Higharc, when you design a home, it becomes data that gets unlocked for everybody else [in the company]. [Higharc] is totally cloud-based, and it works for all departments in a home building company, not just the design department.”

According to Higharc, the new financing follows its rapid growth and customer demand in 2023. The company said the adoption of its generative design technology helped builders eliminate 90 days from the design cycle of new communities in 2023 while decreasing soft cycle time by 33%. Higharc customers build over 40,000 homes annually, representing $19 billion in new-home sales volume.

“We have a record number of home builders that continue to sign up for Higharc. We’re at the place where we need to be selective, and that is a reflection of our own continuing need to grow our team to support [builders],” Minor said. “One of the reasons we brought on $53 million was so that we can grow our team faster to support customers.”

The company will use the funding to support Higharc’s growth and expand its automated materials estimating and generative AI-based workflows. Minor said Higharc will be focused on efforts to service purchasing and estimating departments in the coming year and to improve integration efforts with ERP systems. The funding will also help Higharc provide a “richer” selection process for finishes and products after home buyers have signed a purchase contract and made structural choices.

“[Another area of focus] is using generative AI on top of our generative design platform,” Minor told BUILDER. “We’re going to be layering on some really neat AI tools this year on top of our generative system.”

Higharc’s Homebuilding Cloud replaces the “pen and paper” processes and software solutions in the home building industry, providing builders with the tools to design, estimate, sell, and build homes in a single place. When plans change, each department is updated automatically with new 3D sales experiences, materials takeoffs, and construction documents, according to Higharc.

“Higharc is modernizing a large, foundational industry that’s traditionally been tough to change with technology,” said Alex Finkelstein, co-founder and general partner at Spark Capital, who led the Series B funding round with Pillar VC. “By bringing together builders, manufacturers, and buyers, Higharc’s transformative technology is rewriting the rules of the design-to-construction process.”

With the latest funding, Higharc has raised $78.7 million in capital since 2018.

“Higharc’s technology is second-to-none in the home building space, offering a system that expedites the design-to-construction process and adds value to all stakeholders,” said Brad Jones, principal at SE Ventures. “In collaboration with Schneider Electric, SE Ventures is excited to help bring market insight and drive commercial deployment with home builders globally.”

Participation in the latest round of funding included investments from The Home Depot, Ferguson, Simpson Strong-Tie, Mulhern+Kulp Engineering, SE Ventures, Fifth Wall, Starwood Capital, Standard Investments, Suffolk Technologies, RXR Realty, PSP Growth, Metaprop, SC Masterfund, and former Autodesk CEO Carl Bass. Previous investors Javelin Venture Partners, Lux Capital, and Vertex Ventures also joined the latest funding round.

“This fund raise illustrates the cross-industry support. It’s a really big deal that manufacturers, distributors, developers, and even builders are all saying Higharc is the new way to represent homes as data for your business,” Minor said. “We want to make it clear to the world that we’re here to stay and we have the funding to stick around. We’re trying to lift the industry using new technology.”

Minor said the sign of success for Higharc would be that wherever you look in the US, you'd find builders in every state running their businesses with Higharc. He said he hopes the growth and success of Higharc will also facilitate the ability to work with smaller builders—who build less than 100 homes a year—in the next two to three years.

Michael Bergin, vice president of product for Higharc, added he hopes the company is able to enable a purchasing ecosystem that “gives transparency and buying opportunities and ultimately leads to great affordability for homes and better quality for homes.”