Welcome Homes

Welcome Homes is a New York City-based proptech company operating an online platform for designing, purchasing and building new single-family homes. Buyers select an available lot from a set of pre-vetted, price-locked properties, choose from a range of standardized home models, customize finishes using renderings, and proceed through financing and construction within the platform. The company offers guaranteed pricing and says it streamlines the process from land selection through customization, financing and construction, with delivery targeted roughly six months after permitting.

The platform is aimed at building on teardowns and vacant lots — an "lot-by-lot" urban infill approach positioned between production homebuilding, which typically centers on master-planned communities, and custom homebuilding. At launch in 2020 the offering centered on a self-serve configuration of a single "Medium" model of more than 4,000 square feet with four bedrooms and three and a half bathrooms priced at approximately $969,000. The company initially focused on fully custom homes but revamped the product after finding that many prospective buyers preferred fewer choices, going live with a set of models in March 2021. Excluding land, the cost of building a home through Welcome ranged from $596,000 to $1.75 million as of January 2023.

Welcome Homes describes itself as more of a technology company than a tech-enabled homebuilder, and its investors characterize its model as capital-light: it does not hold land or unsold homes on its balance sheet.

Founding story

CEO Alec Hartman began considering the idea roughly three years before the company's 2020 public launch, after he and his wife, then living in a Manhattan apartment, searched unsuccessfully for a new home with more room following the birth of their child. Frustrated by the options, he asked why a home could not simply be purchased online, and ultimately built his own house while acting as general contractor. In May 2020 he teamed with fellow DigitalOcean co-founders Mitch Wainer and Ben Uretsky — all of whom had left the cloud infrastructure company before its 2021 IPO — to start Welcome Homes, applying what they described as a focus on simplicity carried over from their prior venture.

Business model

Welcome Homes operates a capital-light, three-sided managed marketplace described by its lead investor as a "neo-builder" model, connecting buyers, builders and banks providing construction financing. Unlike traditional homebuilders, the company does not carry land or unsold homes on its balance sheet, and it uses technology to automate back-office functions that builders typically handle while enabling banks to extend construction financing directly to homebuyers across multiple projects with a scaled partner.

Revenue derives from the sale and delivery of new single-family homes purchased through its platform at guaranteed prices; excluding land, home build costs ranged from $596,000 to $1.75 million as of January 2023.

Traction

The company said it grew home sales sixfold in 2022 and was on pace to grow sales exponentially year-over-year in its Northeast markets. Headcount stood at 40 at the time of the January 2023 Series A announcement, with plans to increase it.

Latest developments

In January 2023 Welcome Homes announced a Series A of more than $29 million led by Era Ventures, which had closed in September 2022. Clelia Warburg Peters, Managing Partner at Era Ventures and previously president of Warburg Realty and a partner at Bain Capital Ventures, joined the board of directors in connection with the round. The company said it would use the capital to hire, advance its land technology, design new home models and expand into additional U.S. markets.