Mosaic Building Group, a Phoenix, Arizona-based construction tech startup, has raised $44 million in a Series B funding round led by Peak State Ventures.
New investors Starwood Capital, invisionAZ, Tekfen Ventures, Volt Capital, Brightstone and Naval Ravikant also put money in the round. They joined previous backers Andreessen Horowitz (a16z), Building Ventures, Innovation Endeavors, 8VC, Founders Fund and the Milstein family, bringing Mosaic’s total funding to $68.75 million since its 2015 inception.
In a nutshell, Mosaic’s software and team serve as a tech-enabled general contractor for production-scale residential development projects. In other words, the company manages construction infrastructure in what it says is an effort to free up real estate developers to focus on things like land acquisition, sales and marketing and architecture. The end goal? To make residential construction more scalable.
The startup says it is able to do that because its technology actually automates the construction planning process. Its software is designed to shorten build times, cut costs, reduce materials waste and improve construction quality for homebuilders. At its core, Mosaic’s technology digitizes standard construction plans and identifies the best way for homes to be built onsite, using the same materials, workers and procedures as traditional home builders do.
Says Salman Ahmad, co-founder and CEO of Mosaic: “We’ve been trying to vertically integrate our construction operations with our technology stack…instead of us trying to take the approach of just building software that addresses a single point solution, we’re basically trying to do what AWS did for tech startups where home builders and residential developers are able to offload their construction operations to Mosaic and focus their time and energy on their business operations.”
Image Credits: Mosaic CEO and co-founder Salman Ahmad / Mosaic
There are a number of proptech companies using software to make construction more efficient, but Mosaic has taken a unique strategy of acquiring a home builder, Mandalay Homes in a move that created an instant pipeline to put its technology to work on building new homes, according to Ahmad. To date, the company has completed 160 homes and has 195 under construction, with the plan of building 400 homes over the next two years.
The company is looking to double its current 70-person headcount by the end of 2022 and to speed up the construction of homes within its more than $500 million residential development project pipeline. Specifically, it is actively recruiting engineering, product, back office, construction and project management roles. It is also looking to expand outside of its home state Arizona by the end of next year.
Jason Freedman, partner at Peak State Ventures, believes that the most innovation in the sector has until recently been in moving construction offsite and standardizing it.
“But that doesn’t serve the other 99.99% of homes that are still customized to the buyer and built on site,” he wrote via email. “No one has figured out a way to change that equation until Sep and Salman started Mosaic, and the magic of why Mosaic works is they care just as much about why people work together as the homes that get built.”
Mosaic’s effort to have a focus on tradespeople, or subcontractors, in fact is something that Ahmad is proud of — especially as the labor shortages rage on.
“We believe that the trade partners are the industry’s most precious resources and a lot of what Mosaic’s focus has been to develop technologies and tools to really enable our trade partners to be successful and to be able to lean on osaic as a trusted and preferred building partner,” he said. “It’s becoming increasingly obvious to us that maximizing the efficiency of the precious trade resources that we have is paramount to not just our success as a business, but the success of the industry and to addressing some of the broader housing crises that exist across the country.”
