Agorus Raises $10M for Precision Construction Platform
“Blackhorn Ventures is proud to be partnered with the AGORUS team as they scale a new approach to offsite construction; a central pillar of our resource efficiency and industrial impact in the built environment thesis,” said Melissa Cheong, managing partner of Blackhorn Ventures, who led the $6.5 million seed round.
“Leveraging digital technology, a capital-light and agile business model, and offsite production, Agorus is helping address both the housing crisis and the acute labor shortage in the construction industry,” Cheong added. “We’re excited to support this world-class team as they use technology to address the critical challenges in meeting America’s housing needs.”
Joining Blackhorn in helping Agorus address the nation’s housing needs were Toyota Ventures, Point72 Ventures, Signia Ventures, DivCoWest and Los Angeles-based real estate developer Kenny Wilson, who had previously funded Agorus with a $1.5 million angel investment. Including between rounds of angel investments, Agorus has raised more than $10 million in its four years.
‘Pain Point’ to Platform
Moore said he founded Agorus while he was serving as U.S. Navy SEAL officer.
“I didn’t intend to go into construction but when I went to build my own house for the first time it turned into an absolute trainwreck.
After leaving the Navy, Moore used his mechanical engineering background from his undergrad work at Stanford, an appreciation for “the world of physical goods” and the teamwork and efficiency he learned as a SEAL and set out to develop a software platform for homebuilders that could “digest the complex into the simple.”
One of the major challenges in developing the software platform was to account for the extreme variance and style in American housing, as well as the many differing building codes across the country’s jurisdictions. The Agorus platform, inputs all that information and applies it to the homebuilders’ plans and outputs a list of materials needed and the instructions to build the unit. The platform is “agnostic” to what type of home it can build and Agorus has built everything from ADU units to multifamily apartments. The company is currently building a 40-unit townhouse project in El Cajon.
In addition to producing the list of materials and instructions for building a housing project, Agorus also uses a “panelization” approach to construction, Moore said. Unlike a “sticks and bricks” approach of dropping materials off at a job site and using human capital to build a home, panelization incorporates parts of that approach with modular, or prefab construction where certain parts of the housing materials are made in a factory and then shipped all together to a job site, like how furniture is shipped in boxes for home assembly.
“It gives you all the benefits of customization and all the benefits of linear offsite manufacturing and efficiency,” Moore said, adding that in addition to manufacturing the panels for homes, Agorus also has a subsidiary that constructs the projects in order to discover where efficiencies can be improved.
“When you’re making the secret sauce, you want to own all the mistakes. You want to figure that out and unpack it all,” he said.
Market, Labor, Environmental Demands
As Agorus scales, the idea is to partner with the major building companies to achieve the level of homebuilding the market is currently demanding, Moore said, pointing to data by Fannie Mae and Freddy Mac that over the last 14 years the U.S. is 5.5 million new homes behind where it needs to be and U.S. Census data that 1.5 million homes need to be built per year just to keep up with population growth.
“The challenge is that to undo that 5.5 million debt, you’d need to tell the 100 top builders in the country to double their capacity in the next decade,” Moore said. “That’s coming at a time when labor is becoming tougher and tougher to come by.”
After the Great Recession in 2008, “a lot of folks left [the trades industry] and never came back,” Moore said, adding that the trades will still be an option for workers even as technology begins automating parts of the homebuilding process.
“Our belief is that technology is what’s going to be needed and it’s probably the only way that we’re going to connect those gaps,” he added. “I’m not looking to replace human beings. The nail gun did not replace framers, it enabled them to get rid of the hammer so that they can build better and faster. This is just the next tool, the next evolution in that cycle.”
In addition to solving for labor shortages, Moore said the Agorus platform also offers an opportunity to address sustainability in homebuilding.
“Nearly 50% of global CO2 emissions come from the build environment. No other industry has such a golden opportunity to make sustainable inroads at scale through their products. When you take a little bit more detail, a little bit more thought to the way in which you build, you can drastically increase the quality of that home and reduce the amount of energy needed to heat and cool it in a significant way,” he said. “With the right partnered integration and cutting-edge construction platform, we can move the needle not just for our nation’s housing crisis, but our carbon footprint as well.”
According to Moore, accomplishing housing and labor shortages and increasing sustainability in homebuilding is possible through Agorus’ core component of the company – technology.
“We develop custom software, custom hardware and manufacturing processes,” he said. “The idea is to bring technology into the construction market.”
CEO: Garrett Moore
Headquarters: San Diego
Business: Software platform for homebuilders
Notable: The Agorus platform can reduce a two- to four-month building project requiring six to 20 laborers down to three to five days and only four installers.