Braustin Homes, a San Antonio-based factory-built home business, has landed a $1.875 million seed funding round led by the venture capital fund Geekdom Fund, with participation from City Rise Ventures investors Graham Weston and Pat Matthews, and angel investor Pat Condon.
Brothers Alberto and Jason Piña founded Braustin Homes in 2017 with a vision to build affordable manufactured homes in South and Central Texas. They plan to use the seed funding to scale operations across the state of Texas.
A tech-fueled home-buying business model
The Piñas discovered the homebuilding industry struggles with a complicated buying process. From its earliest days, the startup incorporated technology into their operations for a seamless customer experience.
Based out of Geekdom, a downtown co-working space, Braustin sold homes from a community desk, leveraging virtual reality for VR tours of model homes. Customers receive home-building updates via drone-produced videos. Developing an app for home buying was their next step.
Braustin’s documents processing mobile app gives buyers an easier way to buy a home using nothing more complicated than a cellphone. The Braustin proprietary app streamlines the home-buying process, from submitting the financial qualification paperwork to getting home-building updates to the home inspection and the final “punch list” of minor items for the builder to address.
“Today, buying a mobile home is full of friction, tons of paperwork, and lots of inefficiency,” Matthews stated. “Braustin is unique in its technology-driven approach and commitment to improving the customer experience for home buyers.”
Braustin’s drive to innovate the home buying process has gotten the attention of the manufactured home industry in Texas, which ships almost 20% of all manufactured homes in the U.S. The Texas Manufactured Housing Association invited Alberto Piña to speak about their tech-driven business model at their annual conference in 2017. Piña shared his company’s unprecedented percentage of buyers who never meet a sales representative in person — 70%.
“Customers can complete the entire home buying process online or over the phone,” Piña said. “Millennials are the largest segment in the mobile home buying market, and they’re used to buying things on their cell phones using an app. Of our buyers, fully 85 percent are under 30.”
Since its 2017 launch, the company has sold over 300 homes.
“We bootstrapped our company and generated $1.2 million in our first year,” Piña told Startups San Antonio. “This being our fourth year, even after a $1 million loss from COVID-19-related losses, we are on track to bring in $9 to $10 million in revenue.”
Piña still recognized the need for a dealership, so in May, Braustin launched its first physical location in Atascosa County off I-35. The dealership includes a showroom and nine models for touring. The key difference? Only one salesperson is on duty to open the homes. Interested buyers connect to a Braustin salesperson back at Geekdom who can answer questions via the video screen inside each model.
A second dealership with the same business model will open in Odessa by the end of the first quarter of 2021, with plans for two more—one outside of Houston, the other in Lubbock—opening soon afterward. All in all, Braustin plans to open 10 such dealerships across Texas, so the seed funding will help with the company’s expansion.
“For us, e-commerce is primary, with our hybrid dealership model as a real-life extension of our virtual sales process,” Piña said. “Since May, we’ve seen how customers will tour the house model in person, then complete the buying process at home using our app. Not only is this safer given the pandemic, but we can also operate 10 of these dealerships for the cost of one traditional dealership because all of our staff is centralized.”
Investing in a ‘big, transformative idea’
Rackspace Technology co-founders Graham Weston and Pat Condon and angel investor and Active Capital founder Pat Matthews were intrigued by the technology-driven house-building model. Pat Condon and Geekdom Fund managing director Mike Troy plan to join the Braustin Homes board of directors.
“Braustin Homes really has everything we look for in an investment,” Troy stated. “Braustin has a highly competitive business model that allows them to utilize technology to do more with less…Over the next few years, we expect to see them grow rapidly to become the largest independent dealer group in Texas, which makes up 20% of the overall market.”
According to a Census Bureau report, millennials now outnumber baby boomers, and it is this generation that is driving change in the real estate market. With home prices rising, millennial homebuyers turn more and more to the manufactured housing industry as an affordable alternative. This population shift is driving builders like Braustin to accommodate the needs of its buyers.
“With the highest weighted NPS [Net Promoter Score] of 96 across all independent retailers in the entire country, we’re selling homes to people we never met and making them happier than anyone else,” Piña said.
Weston, whose philanthropy has benefited San Antonio with many initiatives over the years, invested in Braustin because he knew “we will need companies to address the affordable housing issue in our city and create jobs that allow our residents to become homeowners.”
“I’m drawn to big, transformative ideas, and I see that in Braustin Homes. They’re building a company that is both for people and profit, and I can see it ultimately having the kind of economic impact on San Antonio that Rackspace has had.”
The featured image is of the Braustin Homes founders Alberto Piña (left) and Jason Piña, courtesy photo.
This is an incredible company. Just hope Warren doesn’t get hungry for this dish again soon. 😉