Zephyr, a digital home services platform, raised $60 million in growth equity to fuel M&A, CEO Shawn Weidmann tells Axios exclusively.
Why it matters: Home services remain a hotbed of deal activity.
Zoom in: Elda River Capital and the Pritzker Organization co-led the round, with participation from Juxtapose. Zephyr has raised about $100 million since New York-based venture studio Juxtapose launched it with Weidmann and co-founder Deklan Robinson in 2022.
How it works: The company brings local service providers from several markets into a central technology hub that supports recruiting, training, marketing, operations and finance.
- Zephyr also helps technicians on the ground get specs on certain units that they're working on, or allows them to accurately size an HVAC unit in homes through 3D imaging.
- Zephyr's platform has an AI-powered assistant for technicians as well.
Catch up quick: The New York-based company has inked 12 acquisitions to date in metro areas like Washington, D.C., Houston, Palm Beach and South Florida and Denver.
- Occasionally, Zephyr will buy customer lists, but these businesses come with trucks and technicians too, and Zephyr brings all of them onto its platform, he says.
- The company has closed seven deals this year and plans to close another two before year's end.
- It aims to keep the same pace each year, though it will be "highly dependent on deal size, location, and complexity," Weidmann says.
What's next: Zephyr — projecting more than $100 million in revenue this year and growing 25% yearly — is targeting local HVAC, plumbing and electrical brands, Weidmann says.
- Weidmann hopes to grow Zephyr to $500 million to $1 billion in revenue in the next three to five years.
What they're saying: "We are very comfortable investing off the balance sheet to make investments in technology that we think will fundamentally change the customer user experience," Juxtapose partner Geoff Miller says.
- Because Zephyr acquires profitable businesses, this fresh capital will just help it make decisions on how big to grow, he says.
The big picture: The global HVAC market alone is projected to increase from over $260 billion last year to nearly $350 billion by 2028, according to Boston research firm BCC Research.
- There's more demand for these services because of global warming and housing shortages.
- "The ability to efficiently deploy resources around these home services needs is growing. There's great strategic tailwinds for us," Weidmann says.
The bottom line: "If you put those elements together: profitable, recurring service, fragmented [market] and [aging owners] looking for exit strategies, could I have described a better investor thesis?" Weidmann says.
