A Durham, North Carolina, startup trying to build an “intelligent homebuilding platform” has secured millions from a trio of strategic partners, including the investment arm of Home Depot (NYSE: HD).
Higharc on Tuesday announced it has received new strategic investments from Home Depot Ventures, Carl Bass, the former president and CEO of Autodesk Inc.; and Standard Investments.
Higharc CEO Marc Minor calls it a big win, particularly the connection with Home Depot. The company gave the retailer a seat on its board.
“They’re obviously the largest home improvement retailer and seller of building materials, so for us it’s hard to imagine a better partner,” he said.
Minor was introduced to Home Depot through industry connections.
“We’re kind of walking in the same circles,” he said.
It’s one of multiple strategic investors the firm has considered partnering with – companies that invest off their balance sheet, often for early access to a technology.
Higharc produces a platform Minor describes as “unlocking the power of homebuilding data.” The information it houses – from how many studs need to be in a house to every electrical and plumbing component – is something companies like Home Depot may have a particular interest in.
“It creates a huge opportunity for collaboration … and Home Depot is obviously a company you wouldn’t want to turn down,” Minor said. “I’m looking forward to a long partnership.”
Higharc said it has raised more than $40 million since its inception, and that the latest funding amounted to about $6.5 million. The firm was at $30 million in March after scoring another strategic financing round led by Ferguson Ventures.
“We will continue to evaluate strategic partners who want to invest in the company who are also in line with the vision,” Minor said. “I think it takes a village to transform an industry like this.”
Minor said there are major advantages in targeting strategics – particularly in a market where capital is hard to come by. A few million dollars is “not going to make or break the business,” he said, and for the right technologies, they can be more flexible than traditional investors.
“They have different requirements,” he said, noting they’re more interested in what an investment partner can offer their own customers.
His advice for founders considering the strategic investment route?
“Think carefully about who could accelerate their go to market, how they can create partnerships,” he said. “Networking is one of the best ways to find them, through your existing investor base … and sometimes you can do a cold outreach and you’d be surprised.”
And while Minor admits these kinds of deals can lead to acquisitions, he said that’s not something Higharc is actively pursuing.
“We’re not entertaining offers right now,” he said. We’re not looking for them. We’ve got a lot to do and the kind of industry we are in is a winner take all market, meaning we want to do what we set out to do, which is have most homes designed and built by Higharc.”
The company, at 60 employees, is hiring, particularly in sales and marketing roles. Higharc was founded in 2018 and is a remote-first company with an office in Durham.
