CModel Data Inc., whose proprietary software helps companies operate more efficiently, is moving its headquarters from San Francisco to Birmingham, where the company plans to create 80 new jobs as it expands its operations, Alabama Secretary of Commerce Ellen McNair announced today.

The technology startup has developed its AI-powered Cora program to provide corporate decision makers with insights and recommendations that enable them to develop and implement successful growth strategies.

According to CModel, Cora acts as a decision support engine that aggregates a company's key business data and uses machine learning to analyze metrics, assumptions, and industry benchmarks to provide curated, expert-driven recommendations.

“The innovators behind CModel Data have developed a software platform that enables business leaders to break through the static and gain the insights they need to grow their companies,” said McNair.

“This promising company is another great addition to Birmingham’s growing tech startup scene.”

CModel was co-founded by Teasha Cable, Dr. Russ Muzzolini, and Jazmine Cable-Whitehurst in San Francisco. The company participated in Amazon Web Services' first Impact Accelerator in 2022 and the Build in Tulsa Accelerator in 2023.

Thanks to an investment from an Alabama-focused venture capital fund and broad support for its growth project, CModel is moving its headquarters from San Francisco to Innovation Depot in Birmingham, one of the Southeast's leading incubators for technology-focused startups.

“With the support of Alabama's targeted venture capital fund and the enthusiastic support of Birmingham's innovation ecosystem, we are excited to establish our headquarters at the respected Innovation Depot,” said Cable. “Moving to Birmingham aligns with our vision to make a meaningful impact and contribute to the thriving tech community here.”

“We want to further expand our commitment to growth, create new jobs and promote economic development in the region,” she said.

Teasha Cable is co-founder of CModel, a technology company that is moving its headquarters from San Francisco to Birmingham. (Post)

Growth plans

According to the Alabama Department of Commerce, the company chose the Magic City in Alabama rather than its hometown in California or other cities.

The Birmingham Business Alliance (BBA) estimates that the economic impact of CModel's growth plans in Alabama will be $4.1 million over a 20-year period.

In addition to the Department of Commerce and BBA, AIDT, Alabama's premier workforce development agency, also supports the project and provides services to CModel.

The project is also supported by the City of Birmingham, Jefferson County, Birmingham Bound, an initiative to promote the growth of the city's technology ecosystem, and the Alabama Futures Fund (AFF), a seed-stage venture capital fund focused on promoting and expanding entrepreneurial activity and economic development in the state.

Matt Hottle, partner at Redhawk Advisory and investment manager at AFF, said CModel is a startup that can “make a real difference” for its clients. AFF had previously announced it had invested in the company.

“Augmented intelligence platforms like CORA are typically financially prohibitive for mid-sized companies,” Hottle said in a statement. “Combining the latest AI and machine learning technology with model simulations to help companies make better decisions faster is a game changer.”

The Birmingham technology incubator “Innovation Depot” will be the new home base for the San Francisco-based technology startup CModel Data. (Article)

Local impacts

Officials in Jefferson County are optimistic about CModel's growth potential among Birmingham's growing list of technology startups.

“We are thrilled that CModel is making Birmingham its home,” said Mayor Randall L. Woodfin. “They join a growing list of companies in our city's emerging technology hub where world-changing innovations are being created. The creation of 80 jobs is a huge win for us.”

“I am grateful that CModel recognizes the value of investing in Birmingham. We welcome them to their new home and look forward to pursuing their vision to improve business efficiency.”

With the strong growth of homegrown technology companies in Birmingham, Jefferson County Commissioner Mike Bolin said the region's efforts to attract new technology-focused companies and talent are bearing fruit.

“CModel Data Inc. will be a wonderful addition to this community with its AI-powered decision intelligence engine,” said Bolin. “The 80 new jobs this company will bring to our area will provide excellent opportunities for a number of local families, and Jefferson County looks forward to working with CModel as they move to Jefferson County.”

BBA President and CEO Steve Ammons said the announcement of CModel's move underscores the organization's commitment to growing the tech scene in the greater Birmingham area.

“This innovative company will not only create 80 new jobs, but will also enrich our ecosystem with its cutting-edge technology,” said Ammons. “We are excited to welcome CModel to the Greater Birmingham region and support them on their journey to significantly increase business efficiency and economic development.”

This story originally appeared on the Alabama Department of Commerce's Made in Alabama website.

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• John and Matine Yuksel moved from San Francisco to the Midwest in 2020.

• The brothers and business partners lived in Iowa and Cincinnati while founding their startup.

• Sometimes they miss living in California, but love the friendly people and affordable prices of Cincinnati.

This essay is based on a conversation with John Yuksel, 33, and Matine Yuksel, 29, two brothers who moved from San Francisco to Dubuque, Iowa, in 2020 to start Beltways, an accelerated pavement company. The brothers then moved to Cincinnati in 2022. Their company is based nearby in Northern Kentucky.

John: We are children of immigrant parents who grew up in southern Arizona.

I always knew I wanted to be close to my brother. He's my only sibling. After college, we lived in San Diego for a few years and then moved to San Francisco in 2018.

Death: San Francisco is incredible. I've never seen such a diverse environment there and it's a world-class environment for companies, especially in technology.

John: Matine worked for Walmart e-commerce and later got a job at Apple. I worked as a lawyer.

We paid an incredibly high rent, but had the best view of the Pacific and saw the sunset outside our windows every night.

But San Francisco was in the apocalypse. During COVID, the streets were empty. It felt unsafe. My car was broken into several times.

Death: COVID helped us rethink and reprioritize things. Instead of working on bringing the next generation iPhone to market, I wanted to build a new product that few people have ever heard of.

John: Beltways is actually our father's dream. Forty years ago, he lived in Istanbul and realized that today's forms of mobility were not moving people efficiently. He came up with a modular design to make pedestrian routes ten times faster.

John and Matine Yuksel with their parents.Courtesy of John and Matine Yuksel

My brother and I always wanted to do something together and years after our father came up with the idea, we started looking into it.

Death: We founded Beltways in July 2020. We quickly realized we had to move out of San Francisco. It would have been far too expensive to do what we needed to do there.

John: It wasn't the right place for our startup. We're a large hardware manufacturing startup. It made much more sense to be near industrial technology clusters. We wanted to be in the Midwest, where manufacturing is still profitable.

Death: John met someone with experience in the sidewalk business and he offered us a deal in Iowa.

We moved to Dubuque, Iowa in 2020

John: It was a very small town in the middle of the cornfields, an hour and a half from any airport. Dubuque is a beautiful, quiet town on the Mississippi. We could drive anywhere in the city in two minutes.

We practically lived in a mansion. We had a three-story, four-bedroom house for half the price of our condo in San Francisco.

Death: The snow was definitely a change. We got our share of physical activity by shoveling snow.

It was a different way of life. We had to be focused and Iowa was good because we didn't have too many distractions. The two years we spent in Iowa flew by.

The brothers said they had to adjust to small-town life after moving to Dubuque, Iowa.Courtesy of John and Matine Yuksel

John: We built the prototype for the fastest walkway in the world when we lived there. It was a thirty-meter-long system and earned us our first VC check.

This was a huge milestone for us. We put all our money into this company. We quit our regular jobs. We refinanced our house. There was nothing more fulfilling than turning our father's invention into a commercial venture.

Death: It was a surreal day when he came out and rode the system for the first time. It was the icing on the cake to see his enthusiasm for something he dreamt up so many years ago.

John: We had to look for a new location for our company. The next step was to pilot our walkway. We were invited by several airports to do a pilot demo of our system.

We knew that CVG Airport in Cincinnati had a real track record of innovation and startup support. The area was also beneficial for manufacturing. It's super cheap. The facility we're currently in is just a little more expensive than my rent in San Francisco and is 20,000 square feet.

We moved to Cincinnati in 2022

John: We even moved our parents here. We wanted our father to work with us and be a part of the company personally. Our parents live three floors below us in our building in the Mount Adams neighborhood.

When we moved to Cincinnati, we felt like we were back in a big city after two years in Iowa. We have big sports teams and a big major airport. The climate is much more temperate.

The winters have been pretty mild so far. The spring is lush and green. You can kayak down the rivers and there are great hiking trails nearby. The air quality is great. And the summers aren't 120 degrees like Arizona.

I met my partner and now I have a child who was born here in Cincinnati. The city has become home for us. The company is here, the whole family is here.

John and Matine Yuksel enjoy a football game in Cincinnati.Courtesy of John and Matine Yuksel

Sometimes we miss living on the coast. California is a beautiful place. We love the climate and the diversity of the people. San Francisco is where technology starts and flows out. It really is the birthplace of many amazing things.

Death: But the tech scene in Cincinnati has also been very good to us. It's growing. It's a tight-knit startup community. From the moment we got here, the community was so welcoming.

John: And it's much cheaper here.

Bringing our father's dream to life was incredible

Death: We started Beltways in a modest garage in Tucson, where my brother built prototypes himself. Now we're in a 20,000-square-foot facility here in Northern Kentucky, right next to our first airport customer. And we manufacture in the USA.

John: Our goal is to become an official partner of the 2028 Olympic Games in Los Angeles and to provide temporary high-speed transportation.

Cincinnati is a great place to raise a family and run a business, and we can see ourselves staying there for the foreseeable future.

But our ultimate goal is to make our sidewalks commonplace and to spread this technology around the world. Wherever we need to go to make that possible, we will. This is bigger than us.

Read the original article on Business Insider

The post We’re millennial brothers and enterprise companions who left San Francisco’s tech bubble for the Midwest manufacturing scene. We by no means would have been capable of afford to launch our startup in California. appeared first on DAILY SAN FRANCISCO BAY NEWS.

Dan Laufer vowed to ever start a startup again after selling apartment rental platform RentLingo in 2021, but Laufer also couldn't ignore the potential to solve a problem he saw emerging as head of growth and product marketing at Nextdoor.

“Nextdoor is most commonly used by people searching for providers, particularly HVAC,” Laufer told TechCrunch. “There were these gaps on the consumer side, satisfaction with the experience, it didn’t feel modern. The other big trend I saw was the silver tsunami. All these baby boomers who own these and don’t necessarily have an exit plan.”

The result was PipeDreams, a startup that acquires small and large HVAC and plumbing companies and scales them using its software that helps with planning and marketing. PipeDreams allows business owners to retire when necessary without losing their employees, name or brand, or simply become part of a larger company with more resources, Laufer told TechCrunch.

PipeDreams just raised a $25.5 million Series A led by Canvas Ventures and Plural with additional funding from DoorDash founder Tony Xu and former OpenTable CEO Thomas Layton. PipeDreams has acquired nine companies to date and currently operates in the San Francisco Bay Area, Tucson and Denver with plans to expand.

“The beauty of this industry is that it’s huge. There are over 100,000 plumbing and heating, ventilation and air conditioning companies,” Laufer said of the U.S. market. “We intend to keep their brand. A lot of these people have their name on the truck, it’s very personal.”

PipeDreams' strategy is a variation on the private equity roll-up model, in which PE firms buy smaller companies in a niche (private schools, dentistry, healthcare) and combine them into a larger company with the intent of becoming the larger Selling companies to make profits for investors.

PipeDreams also uses debt to fully acquire the companies, but is not tied to a tight lifecycle timetable to generate returns or exit, such as the four to six years expected with PE. The company has a $15 million credit facility that will be used to purchase businesses and will use the equity raised to improve its software. Laufer said he expects future rounds will need to raise more debt than equity.

Roll-up strategies are not common for venture capital-backed startups. The best comparison for this is Amazon aggregator startups like Perch and Thrasio, which have had financial problems recently. But unlike those aggregators, the underlying companies that PipeDreams buys are not at the mercy of a company like Amazon, which can change the rules at will, and the companies that PipeDreams buys have stronger relationships with its customers than Amazon brands.

However, PipeDreams could face the same growth hurdles that Amazon aggregators face, such as if a new entrant wins more business or if a local plumber improves its SEO or digital marketing strategy.

Laufer said taking over the HVAC companies completely sets PipeDreams apart from other competitors that only want to connect consumers with professionals like Angie and Thumbtack. He said that, like many of its competitors, the marketplace model is not rigid because consumers can search for professionals directly after finding them through a marketplace. Because PipeDreams integrates its technology into each provider's website, it is part of the process every time someone books with that professional.

PipeDreams also addresses the skills shortage in the HVAC and plumbing industries, as Generation Z is less interested in learning trades than the generations before them. The company launched an apprenticeship program in the fourth quarter to provide employees with on-the-job training. So far there have been five students with plans to expand.

While the company still has a long way to go to flesh out its HVAC-focused business, Laufer expects to expand into other categories in the future, including electricians.

“We bought [a company] When the owner had a celebratory dinner a few weeks ago, he described it as: “My company is going to college,” Laufer said. “'I grew it up and it's on its way to the next chapter.' I love this description. We do it like this.”

The post Former Nextdoor exec raises $25 million for PipeDreams, a startup rolling up HVAC corporations appeared first on DAILY SAN FRANCISCO BAY NEWS.

Zeus Living, a San Francisco-based property management startup that raised $150 million from tech investors and was backed by Airbnb, is reportedly “winding down operations.”

The company, which directly manages the homes and apartments it sublets on its site for extended stays of 30 days or more to corporate employees, relocated workers and anyone looking for the flexibility to move around, is “struggling financially” and can no longer guarantee payments, according to an email to landlords obtained by the Information.

Zeus Living was founded in 2015 in San Francisco, with its headquarters in the Dogpatch neighborhood, and offers services in more than 100 U.S. cities through its website and short-term rental platforms like Airbnb. The company was named one of the Bay Area’s top workplaces of 2022 by the Chronicle.

Unlike Airbnb, Zeus Living designs, furnishes, lists, markets and books the properties it manages and acts as a liaison for tenants while driving revenue for homeowners (“You will never receive an urgent call at 2 am about a plumbing issue — we have it covered,” the website promises).  

The company prospered during the early days of the COVID-19 pandemic as more employees had the flexibility to work from home and live in different locations.

The startup raised around $150 million, including a $55 million Series B round with participation from Airbnb in December 2019 and a $55 million round in October 2021. Zeus Living achieved an estimated money valuation of $269 million last year, per PitchBook, with additional backing from Comcast, Bowery and Initialized Capital.

However, the shifting economy and rising interest rates have changed the picture. Zeus Living cut approximately 46% of its 140-person workforce in October 2022, including full-time and part-time workers at its San Francisco headquarters and remote locations. 

“Like many companies in our industry, we are not immune to the effects of market volatility, inflation, war, and the possibility of a recession,” a spokesperson said at the time. “We’re adapting to the current environment by expediting our path to profitability and sustainably expanding our portfolio of managed homes. We have had to make proactive adjustments, including recent staffing changes across the organization.”

An inquiry to the company on Wednesday about its plans was not immediately returned.

Reach Aidin Vaziri: avaziri@sfchronicle.com

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Kiyo Kobayashi is slight, soft-spoken and self-effacing, with an unruly tousle of black hair.

The silhouette he cuts is a far cry from Marlon Brando’s Don Corleone, but the 41-year-old could conceivably be called San Francisco’s Japanese startup godfather. He helped seed a community of like-minded immigrant founders who moved halfway around the globe to change the world from the Bay Area.

“I’m too old,” Kobayashi joked about the godfather label. “But I’m living the dream. Doing startups is my passion, and so is helping other founders.”

Through group chats, calls, dinners and daily feedback reports from younger founders laying out their activities, challenges and questions, his aim is to build up a stronger pathway for these entrepreneurs.

Kobayashi also serves as an advisor and an early-stage investor for dozens of startups from Japanese founders. “Kiyo’s Family” is a collection of around 25 Japanese immigrant entrepreneurs in San Francisco and 50 in the wider Bay Area he helped foster.

“We are probably the first generation of Japanese immigrant startup founders in the U.S.,” Kobayashi said. “Every time I see traction and good news, I feel like we should accumulate this value to the next generation.”

Around a dozen people met for a dinner party at the apartment of one of the group’s members on a recent balmy evening, sharing stories and advice over Korean short-rib stew and above the din of standing fans. These gatherings are a common occurrence for the family.

Kiyo Kobayashi, second right, has dinner at a friend’s home in San Francisco on Friday. | Source: Philip Pacheco for The Standard

When Japanese business leaders swing through the Bay Area, they will often stop by for a meeting or a meal as a way to glean insight into the entrepreneurial community.

Kobayashi himself has started and wound down a number of companies in the decade since he’s been in San Francisco. He’s currently working on a recruiting startup in the Web3 space, but his larger project is working to develop a sustainable pathway for Japanese immigrant founders.

Forging a Path

Kobayashi became a known figure in the Japanese business world when—spotting the coming opportunity enabled via smartphones—he founded Nobot in 2009, one of the country’s first mobile advertising companies. The real sea change came when he ended up selling his startup a couple years later to major telecom corporation KDDI for $19 million.

“It was essentially one of the first successful case studies of [mergers & acquisitions] in Japan,” said Kaz Tamai, founder and CEO of startup design firm Zypsy. “Back then, everyone thought M&A was a betrayal because you were passing along ownership to someone else. It was like selling your family.”

Kaz Tamai, right, speaks with a friend as they have dinner at a friend’s home with other startup founders brought together by Kiyo Kobayashi. | Source: Philip Pacheco for The Standard

But Tamai said the sale proved that the startup model could work and helped provide the foundations for what is increasingly becoming a thriving domestic startup ecosystem. According to data from Initial Enterprise, total venture capital funding in Japan has grown more than 16 times between 2009 and 2021, rising from $130 million to $2.2 billion.

Kobayashi tried to take Nobot international but was stymied by the domination of American tech giants like Google. The roadblock helped inspire him to move to San Francisco to create a company that could have global impact.

To hear it from Kobayashi, he arrived in the city in 2013 with no connections, no English skills and, really, no idea. His first stop was at language school to help him learn to communicate.

“In Japan, I was connected with pretty much every startup founder and investor,” Kobayashi said. “But when I moved here, I was treated like an elementary school kid because I couldn’t speak English.”

Kiyo Kobayashi receives a certificate after completing a language course during his early years in San Francisco. | Source: Courtesy Kiyo Kobayashi

Kobayashi notes that a community of Japanese founders at the time was virtually nonexistent, a stark contrast to the strong connections made among immigrant entrepreneurs from Asian countries like India, South Korea and China.

Those early days were filled with plenty of discomfort and shame. Kobayashi said he was scammed a few times by those offering to provide connections or help with the business and visa processes. Through painful trial and error, Kobayashi was able to build up the right set of contacts to help others in his situation with business incorporation and immigration issues.

One of his early protégés was Satoru “Steve” Naito, the CEO of Anyplace, which offers furnished apartments with high-speed internet for remote workers. Naito was writing a blog about his experiences in Silicon Valley after he arrived in 2014, and Kobayashi reached out to connect.

Kobayashi helped inspire Naito and a handful of entrepreneurs like Tamai to root themselves in San Francisco instead of retreating back to Japan and provided meals, advice and some initial seed funding. The group would often tag-team meetings together to help one another communicate with limited English skills.

“When I moved to San Francisco, I didn’t speak English. I didn’t have money. I didn’t have friends,” Naito said. Ordering a cup of coffee at Starbucks was a challenge, Naito said, and often led to cloyingly sweet drinks.

Satoru “Steve” Naito has dinner at a friend’s home with other startup founders brought together by Kiyo Kobayashi. | Source: Philip Pacheco for The Standard

To help build a home base for the community, the group started a shared house in Balboa Park that worked as a living space for Japanese founders. Although described lovingly by Naito as a crowded and messy dorm, the home accommodated hundreds of prospective founders and visitors.

“It became a good place for Japanese people to land in San Francisco and be together and exchange information,” Naito said.

The group also continued to write for a Japanese audience, blogging online about their experiences in Silicon Valley and interviewing other founders and members of the local tech industry to spread word of their activities.

Kohei Nagata, founder of blockchain startup Senate, said he was inspired to come to San Francisco five years ago after reading Naito’s own account of moving to the city despite not knowing any English.

He started speaking to Kobayashi after connecting on social media. What started out as occasional conversations during household chores turned into daily feedback sessions.

“There were times when there was no point in using his time to help, when I had no hope literally,” Nagata said. “But he still kept trying to give me advice every single day.”

Nagata didn’t hesitate to say that, without that line of support, he would have already left the city.

Kohei Nagata has dinner at a friend’s home with other startup founders brought together by Kiyo Kobayashi. | Source: Philip Pacheco for The Standard

“In order to keep grinding for that startup dream,” he said, “you have to believe in yourself, sure, but you have to have someone who believes in more than you do yourself. That’s the feeling Kiyo gave me.”

Family Time

Kobayashi lives in Mission Bay with his wife and two small children. More than a dozen other entrepreneurs have moved to his apartment building or his neighborhood to be nearby for advice and a stronger network of support.

Kobyashi’s mentorship provides a warm embrace for many folks who move to San Francisco with few connections. He and his wife host regular events like barbecues or weekend trips, and he said he considers the community of founders part of his extended family. He also brings together small groups of founders at the start of each year to set their intentions and share their learnings and mistakes.

Datz Daito is an entrepreneur who was drawn to building a global tech startup in San Francisco, moving to the city as a teenager in 2019. Daito runs DeStore, an apparel shop in Hayes Valley that operates with a collective decision-making model by the company’s members.

Instead of rooting around in the proverbial darkness, these immigrants found that Kiyo’s Family provided a way to plug into investors, mentorship and a place to live. There’s a team spirit that fosters a feeling of camaraderie. A win for one founder is a win for their entire family.

Datz Daito, left, has dinner with other startup founders brought together by Kiyo Kobayashi. | Source: Philip Pacheco for The Standard

“If anybody’s successful, they add more value to the overall ecosystem, and the probability for success for everyone is higher,” Daito said.

Sumino Koiso, found her way into the community during her first trip to San Francisco through her mentor, who is a member of Kiyo’s Family. Now, she relies on their connections to find trustworthy accountants and lawyers to guide her through the visa process.

Her working theory on why there’s been only a limited number of Japanese immigrant founders has to do with a discomfort with speaking English in professional settings and a cultural fear of failure, which leads to calculated risks rather than the wide swings in fortune seen in Silicon Valley.

There’s also the relative geographic isolation of Japan, which has a strong domestic economy, as well as an internal business culture difficult to penetrate for outsiders.

She struggled to find the right words to characterize how she and other members feel when returning to Japan, so she used a translation app on her phone.

Sumino Koiso, left, and Misaki Kobayashi, right, chat during a dinner gathering of startup founders brought together by Kiyo Kobayashi. | Source: Philip Pacheco for The Standard

“Societally unfit,” the screen read when she turned it around. “We’re different because we can take these risks and tell our thoughts directly which for some Japanese people make them uncomfortable.”

Although there have been a handful of Cinderella stories for Asian immigrant startup founders like Zoom’s Eric Yuan, that level of success has thus far eluded Japanese immigrant entrepreneurs.

Kobayashi believes that the Japanese are great at following role models, but someone needs to act as a trailblazer. He wants to be part of the team proving that having success is possible. For an analogy, he turned to baseball’s Ichiro Suzuki, who was the first Japanese position player to find success in Major League Baseball.

The startup journey is, for the most part, defined by failure. And many entrepreneurs in the network said Kobayashi’s most valuable advice was in dealing with personal and business failures and giving them confidence to move forward.

Kiyo Kobayashi has a discussion during dinner at a friend’s home in San Francisco on Friday. | Source: Philip Pacheco for The Standard

Kobayashi has weathered his own share of failures in his entrepreneurial journey. On particularly rough days, he’ll pop into a neighboring apartment where a number of Japanese founders live and work.

“I’ll have dinner with them, and I’ll ask if they have any problems that I can help them with,” Kobayashi said. “It’s confirming that the reason why I am a founder and an entrepreneur is to help others.”

The post San Francisco’s Japanese Startup Group: Meet the Godfather appeared first on DAILY SAN FRANCISCO BAY NEWS.

A handyman builds a shelf. Image generated by AI using Midjourney.

Though the home service industry is worth $500 billion, it remains a highly fragmented space occupied by a variety of players: independent contractors, platforms such as Angie, TaskRabbit, as well as white label concierge firms like LiveEasy.

Vishwas Prabhakara has a new twist to offer. Through a membership system, his startup Honey Homes provides its clients, the homeowners, with the services of a dedicated, salaried handyman. One of the goals of the company, Prabhakara told HousingWire, is to build a partnership between a homeowner and a handyperson based on “consistency and trust.”

The base price for the membership starts at $2,950 for an annual plan and $295 per month for a monthly plan. It provides a household with one dedicated handy person who is able to complete tasks around the house, such as caulking, grouting, patching, paint touch-ups, TV hanging, installations, furniture assembly as well as “minor electrical and plumbing jobs.” Jobs that require a licensed specialist are not covered by the monthly membership, the additional cost will have to be shouldered by the homeowners.

Prabhakara identified busy families as his company’s target audience. These families usually have providers for childcare, house cleaning as well as landscaping. But they rarely have a dedicated home maintenance professional, Prabhakara said.

“One of the big beliefs I have is that home maintenance, while really important, is actually not the thing that people want to buy,” Prabhakara told HousingWire. “They want to buy a better lifestyle. And with our handymen, this is what people are actually asking us to do. They want  to upgrade their home in all the areas that bring them comfort and joy.”

Honey Homes has full-time employees who receive healthcare, PTO, parental leave, as well as “ongoing professional development opportunities.” Founded in 2021, the startup matches homeowners and home maintenance professionals in the San Francisco Bay area as well as Dallas through their app.

Story continues

Over the next couple of years, Prabhakara hopes to expand his company to additional markets.

“Over the next couple years, we should be able to be in the top 20 metros across the country,” he said.

The Honey Homes roadmap

Over the summer, Honey Homes notched Series A funding to grow the company’s presence and improve its technology. It raised $9 million in Series A funding led by Khosla Ventures. DoorDash co-founders Tony Xu and Stanley Tang, Lyft co-founder Logan Green, Opendoor co-founder Eric Wu and Mercury co-founder Immad Akhund also invested in that round.

It has led to the company rolling out a new product, Home Health, which will provide new customers with a professional who will execute a “top-to-bottom” evaluation of a home’s major appliances, systems and fixtures. After that evaluation, the handyman will be able to come up with a customized, annual home maintenance plan, which he will execute.

Andrew Ladd, Honey Homes’ latest recruit and former senior director at DoorDash, will oversee all product development for the company.

Honey Homes doubled its customer base over the last three months to 1,000 members, the company said.

The post This startup desires you to radically reimagine the native handyman appeared first on DAILY SAN FRANCISCO BAY NEWS.

Though the home service industry is worth $500 billion, it remains a highly fragmented space occupied by a variety of players: independent contractors, platforms such as Angie, TaskRabbit, as well as white label concierge firms like LiveEasy.

Vishwas Prabhakara has a new twist to offer. Through a membership system, his startup Honey Homes provides its clients, the homeowners, with the services of a dedicated, salaried handyman. One of the goals of the company, Prabhakara told HousingWire, is to build a partnership between a homeowner and a handyperson based on “consistency and trust.”

The base price for the membership starts at $2,950 for an annual plan and $295 per month for a monthly plan. It provides a household with one dedicated handy person who is able to complete tasks around the house, such as caulking, grouting, patching, paint touch-ups, TV hanging, installations, furniture assembly as well as “minor electrical and plumbing jobs.” Jobs that require a licensed specialist are not covered by the monthly membership, the additional cost will have to be shouldered by the homeowners. 

Prabhakara identified busy families as his company’s target audience. These families usually have providers for childcare, house cleaning as well as landscaping. But they rarely have a dedicated home maintenance professional, Prabhakara said.

“One of the big beliefs I have is that home maintenance, while really important, is actually not the thing that people want to buy,” Prabhakara told HousingWire. “They want to buy a better lifestyle. And with our handymen, this is what people are actually asking us to do. They want  to upgrade their home in all the areas that bring them comfort and joy.”

Honey Homes has full-time employees who receive healthcare, PTO, parental leave, as well as “ongoing professional development opportunities.” Founded in 2021, the startup matches homeowners and home maintenance professionals in the San Francisco Bay area as well as Dallas through their app. 

Over the next couple of years, Prabhakara hopes to expand his company to additional markets.

“Over the next couple years, we should be able to be in the top 20 metros across the country,” he said.

The Honey Homes roadmap

Over the summer, Honey Homes notched Series A funding to grow the company’s presence and improve its technology. It raised $9 million in Series A funding led by Khosla Ventures. DoorDash co-founders Tony Xu and Stanley Tang, Lyft co-founder Logan Green, Opendoor co-founder Eric Wu and Mercury co-founder Immad Akhund also invested in that round.

It has led to the company rolling out a new product, Home Health, which will provide new customers with a professional who will execute a “top-to-bottom” evaluation of a home’s major appliances, systems and fixtures. After that evaluation, the handyman will be able to come up with a customized, annual home maintenance plan, which he will execute.

Andrew Ladd, Honey Homes’ latest recruit and former senior director at DoorDash, will oversee all product development for the company.

Honey Homes doubled its customer base over the last three months to 1,000 members, the company said.

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San Francisco has filed suit against Qwick, a staffing company that supplies thousands of food servers, dishwashers and other help to restaurants and hotels, saying the company is depriving its workers of minimum wages and other benefits by misclassifying them as independent contractors rather than employees.

The company, based in Phoenix, was founded in 2017 and expanded its operations to San Diego in 2019, Los Angeles in 2021 and the San Francisco Bay Area in January 2022, along with about 20 metropolitan areas in other states. It sends servers, bartenders, cooks and cleaners to food and beverage providers and, according to the suit, charges the companies for the services, then pays the workers after deducting a 40% fee.

As contractors rather than employees, the workers have no right under state law to minimum wages, overtime, meal and rest breaks, sick leave or unemployment compensation, among other benefits.

In the suit, filed Wednesday in San Francisco Superior Court, City Attorney David Chiu’s office said Qwick is violating a California law that classifies workers as employees if their work duties are controlled by the company that hired them, or the one they work for. It is the same law, AB5, that has been cited by state labor officials in a case involving drivers for the ride-hailing companies Uber and Lyft.

“Qwick’s Hospitality Workers are not independent contractors in business for themselves. Rather, they are employees that Qwick draws upon to staff its clients’ shifts,” the city’s lawyers said. They said the workers have no ability to negotiate or control their pay, their work duties or the length of their shift, and have to work wherever Qwick sends them.

“If Qwick’s business model is allowed to take root, hundreds of thousands of positions in the food and beverage industry in California risk illegal misclassification,” the suit said. 

“Qwick is inequality disguised as innovation,” Chiu added in an interview.

The company did not immediately respond to a request for comment.

AB5, backed by labor organizations and passed in 2019 in response to the disputes over Uber and Lyft, says workers are employees, not contractors, if they are in the same business as the hiring company, or if the company controls their activity. That law was based on the state Supreme Court’s unanimous 2018 ruling in the Dynamex case, which said companies that want to prove their workers are contractors must show that the workers are running their own businesses. 

The ride-hailing companies then sponsored a ballot measure, Proposition 22, that carved themselves out of AB5 and classified their drivers as independent contractors. It was approved by 59% of the state’s voters in November 2020 after a $200 million campaign by the companies. But the state Supreme Court agreed this June to decide whether Prop. 22 violates any sections of the California Constitution, including a provision authorizing the Legislature to regulate workers’ compensation.

That court case does not apply to Qwick, which was not covered by Prop. 22. The lawsuit seeks court orders requiring the company to treat its San Francisco workers as employees and also seeks financial penalties.

Reach Bob Egelko: begelko@sfchronicle.com; Twitter: @BobEgelko

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Startup Andi is bidding adieu to Miami and moving to San Francisco, further chipping away at the yearslong hype over the Magic City becoming a tech mecca. 

Andi will open its headquarters at 600 California Street in San Francisco’s Financial District, according to the San Francisco Business Times, which first reported the story. The firm wants to be close to the Bay Area’s artificial intelligence talent and venture capital firms, Angela Hoover, CEO of Andi, told the publication. 

Founded in 2021, Andi is the maker of an AI-powered chatbot that offers a different option from search engines such as Google. The tool provides responses to questions that are targeted to the user’s query and skips ads and clickbait pages. 

Over the past three years, tech firms left San Francisco and homed in on cities such as Miami. Since late 2020, Miami’s real estate industry and Mayor Francis Suarez have buzzed over the city becoming a magnet for tech firms. Firms such as venture capital companies Founders Fund and Atomic inked deals in Miami’s Wynwood, a prime choice among tech firms and their venture capital backers. 

Yet, tech firms still have a stronger real estate presence in the Bay Area than in Miami. During the first five months of this year, tech leases signed in the Bay Area represented 23 percent of all office deals in that region, and 51 percent of the office square footage leased, according to data provided by CompStak, a crowdsourced database. This was bigger than South Florida’s share of tech deals. In the South Florida tri-county region, tech leases represented 5.9 percent of all office deals and 29 percent of the square footage leased. 

This year, San Francisco again started attracting AI-focused tech firms due to the amount of VC funding being pumped into the industry. The city experienced $5.3 billion in funding for AI companies during the first half of this year, The San Francisco Standard reported. 

— Lidia Dinkova

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Pest IQ, a Provo-based performance analytics startup, has raised a $600k pre-seed round from Startup Ignition Ventures. 

Co-founders Adam Weber (CEO) and James Sullivan (COO), veterans of the pest control industry–and recent graduates of Startup Ignition’s boot camp, Cohort 15, which took place in June at the Lehi Kiln– have built a time-saving performance analytics dashboard to support the pest control industry. Weber and Sullivan have applied their knowledge and relationships in Pest Control to the creation of a new tool that gives employees greater visibility about key performance indicators to help employees and managers track performance against company goals.

“Our investment in PestIQ is really an investment in the founding team,” Startup Ignition Ventures Managing Partner John Richards explained. “This is a good example of our focus on quality teams who follow lean startup principles. What we like about PestIQ is the industry experience and clear understanding of operator pain, the B2B focus, and we think this will become a ‘gotta have’ product.” 

Sullivan and Weber have been in Pest Control for a while now. In 2010, they started and operated a pest control company, Fulcrum Pest Control. They sold Fulcrum in December 2022.  

Sullivan had been a leading sales rep for another pest control company. Although he was making good money, Sullivan felt the itch to build a pest control company of his own that would exceed the performance of his competitors. He called his friend Adam Weber, who was newly married and living in San Francisco at the time working on a new mobile marketplace startup. They discussed the idea of creating a Texas based pest control company.

In no time, Weber decided to leave his 600 sq foot $4K/mo San Francisco apartment and move to El Paso to embark upon a new startup journey with Texas-based Sullivan.

A marketer by trade, James Sullivan taught himself how to code. Having already built and marketed a healthy lifestyle app, Fittur, he was very familiar with lean startup methodology and was comfortable with the idea of validating the new business concept before committing it to code.

With Pest IQ, Sullivan and Weber followed the exact same approach. They contacted their friends and competitors in the pest control industry, described the concept that their software eventually was built to address, and received favorable feedback. 

“We validated the concept for the past year before we really built anything because we were in the industry and knew people in it,” said Weber. “We built a paper MVP and validated it through a painstaking process of manual data collection. We then presented it to our potential clients.”

Sullivan built an early stage MVP of the product that worked and garnered a lot of interest from customers, but it presented a dilemma to the founders: “We could go two directions. Either we could continue bootstrapping, or we could raise,” said Weber.. “If we raise, we should bring in a real CTO and build the company the right way.  That’s how we got connected with John and Tyler Richards.”

Last month, Weber and Sullivan brought in Chris Walker as Co-founder and CTO to join the company. Walker, a technical leader with startup experience, had gone through Startup Ignition’s boot camp, cohorts 8 & 11. He was introduced by John and Tyler Richards to Weber and Sullivan.

Weber describes the impact of Walker’s contributions, “The MVP was built, but we brought in Chris to take it to a new level, make it function right, make it scale, and build in some amazing additional features. Within weeks of having Chris on board, the design and the functionality now is astronomically better,” said Weber.

Pest IQ delivers individualized dashboards for each team member on a pest control team: the sales team, technicians, administrators, and executives. These dashboards provide real-time data about how each member of a given team is performing against company metrics and goals.

The dashboard solves the data gathering and tracking problem that Weber and Sullivan and most of their colleagues in other companies were experiencing, namely the long time required to gather data from myriad sources to have performance conversations with team members. 

“When it came to performance conversations I was spending three hours consolidating data from several different sources to have a 20-minute conversation,” said Weber. “My time was skewed. What I should have been doing with that time was supporting and guiding my team. Instead I was spending too much time just collecting the data for the conversation.”

Using the Pest IQ tool, gathering the data for performance conversations “is literally immediate,” says Weber. “While I am sitting down talking with a sales rep, I can pull up that rep’s data immediately with one touch while we are talking; I don’t even have to look at it ahead of time.”

Weber explained that it is not just the time savings that resonates with customers. “In our research the real ROI we are seeing from customers is on the performance side of things. When employees have that data right in front of them about how they’re performing relative to how they should perform, we are seeing their performance dramatically increase,” says Weber. “They can see if they are on target for where they are supposed to be. And if not, they can change things and see where they can improve.”

Pest IQ is a SaaS business model involving a minimal per office fee and even smaller user fee. “The way we’re structured right now, it is $200 per office and $10 per user. The average office will be in the $250 to $350 per month range–or approximately 10X less than the competition,” said Weber.

Pest IQ plans to focus on marketing to the 32,000 pest control companies in the US, but its software can easily be transitioned to similar home service industries such as electrical, plumbing, HVAC, landscapers, and other home improvement industries that involve taking calls, sending out a technician and performing a task. 

“I’m confident we can achieve 10 million + ARR just from the pest control industry alone in a really short timeframe. But then we have other related industries that come after it. We see this as a model that can be adapted to other industries. We are called Pest IQ now, but I can see it transitioning to something like Service IQ later, after we have hit our initial goals.

Currently it has about 15 companies that have been testing it and will be official customers upon the launch of the product later this month.

 

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