Handoff Raises $5.8M in Strategic Funding Round

Proptech startup Handoff announced Tuesday that it has raised a $5.8 million strategic funding round to expand its work in automating back-office tasks for small- and medium-size (SMB) residential construction contractors.

Architecture, engineering and construction firm Nemetschek Group and home improvement and building products corporation Masco led the round, with existing investors Initialized Capital, Afore, YC and Greycroft Capital participating.

The latest funding round comes between Handoff’s Series A raise and future planned raises, said Dmitry Alexin, CEO and founder of the startup, who declined to cite specific numbers related to the earlier rounds or the upcoming ones.

Founded in 2019 and based in Austin, Handoff automates estimates, proposals, invoices and project organization for smaller remodeling contractors, said Alexin.

“We help you run your company back office by automating it with AI instead of needing an assistant, so that an owner of a remodeling company can focus on doing things on site like actually building,” Alexin said. Alexin was a data scientist who started his career doing economic forecasting for the International Monetary Fund and later led the data science team for Uber co-founder Travis Kalanick’s Cloud Kitchens, where he was responsible for automating real estate development and construction.

Handoff was created to fill an AI automation void in the SMB contracting sectors, Alexin said. The company focuses on remodeling work for single-family homes and apartments. Additionally, some Handoff customers are in the ground-up home construction sector, including custom and spec homes, as well as fix-and-flip projects.

“We’re very much focused on SMB companies, because we find that this space is the most underserved,” he explained. “There are giants like Procore out there that cater to enterprise-type firms and commercial companies. We find that it’s the remodeling, small mom-and-pop contractors with three- to five-person teams that need the most help. And AI actually happens to be especially useful for that, because otherwise they really just don’t have that help at all.

“It’s essentially an AI agent. There’s similarities to ChatGPT in the sense that you can just open the app and start talking to it, or you can type, and you can ask this agent to perform actions for you. The difference between us and ChatGPT is that everything else is trained on this construction knowledge, but we connect tools that the contractor needs to that AI agent.”

Operating throughout the U.S., Handoff claims to have grown from zero to more than 10,000 monthly active users in the last 14 months, handling over $6 billion in annualized construction projects.

“Handoff is bringing powerful AI to a segment long underserved by traditional software,” Tanja Kufner, head of startups and venture investments at Nemetschek Group, said in a statement. “We’re excited to support their growth and advance digital efficiency in residential construction.”

Philip Russo can be reached at prusso@commercialobserver.com.