John Geary learned firsthand as a teen what it takes to build homes in the Bay Area, working for his father’s construction company and accompanying him to city council and planning board meetings. His co-founder at Redwood City-based Abodu Inc., Eric McInerney, had a similar early education about mass production from his family, which was involved in the auto industry in Detroit. Geary and McInerney say they have drawn on those experiences at their startup, which sells pre-fabricated accessory dwelling units (ADUs), and they raised a $20 million Series A funding round this month.
“Managing all of the facets of building an ADU in a backyard can generally take 12 to 18 months,” Geary said. “We standardize this for the homeowner. … We handle everything as a unified experience and can do it in less than half that time.”
Headquarters: Redwood City
CEO: John Geary
Abodu’s homes are built in factories in California, Washington, Utah and Idaho. Instead of spending eight to 12 months on-site, Geary said Abodu’s crews are in the owner’s backyard for less than a month. “All of the hard stuff gets done on the factory floor,” he said. Abodu sells its homes in three different sizes: small, medium or large. The price isdetermined upfront and the company’s profit depends on coming in under cost.Geary said he had to raise prices for the first time in July, thanks to the spike in lumber and other construction material costs.
“We held off as long as we could, but our costs went up across the board,” he said. Abodu is focused now on building ADUs in the Bay Area, as well as in the Los Angeles and Seattle areas. It’s been helped in California by laws passed in 2017 and last year that make it dramatically easier to build ADUs. The company worked a deal with San Jose to have its buildings pre-approved.
“Getting a permit in San Jose takes an hour instead of months,” Geary said. Adobu plans to use the funds raised this month to scale up the business in the two states they are operating in. “We are laser-focused on California and Washington,” Geary said. “We estimate that the combined annual market in those states is a little over $4 billion.” Jeff Crowe of Norwest Venture Partners led the round. He was joined by Initialized Capital, Redfin CEO Glenn Kelman, former Stockton Mayor Michael Tubbs, GGV investor Hans Tung and Paradox Capital’s Kyle Tibbits.
Crowe said in the funding announcement that Norwest was attracted to Abodu’s pioneering of the ADU market after the new laws went into effect and its performance to date: “The result has been surging customer demand, and we look forward to supporting Abodu’s continued rapid growth,” he said.
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