Proptech Startup Raises $20M To Make Multifamily Development Process Faster
As cities across the U.S. look to build more multifamily to address housing shortages, one growing startup aims to make the development process much faster.
The company uses software to standardize the process of designing buildings and sourcing the materials to construct them. Juno claims it can make the design process at least 55% faster and the construction process 25% faster, leading to an overall time savings of 35%.
“We think that can only get better,” Juno co-founder Jonathan Scherr said of the time savings metrics. “We want to underpromise and overdeliver in certain areas, but those efficiencies are a really exciting starting point for where we see ourselves going."
Scherr said Juno's platform treats buildings as products that can be broken down into components and repeated, and it collects data to learn how to make each successive project more efficient. He said commercial real estate's existing processes are inefficient because they treat every project as a one-off building that needs to be designed from scratch.
“By thinking about housing as a product, we believe we can try to design and build housing that is worthy of repetition,” he said. “We effectively can start to break that approach of designing and building apartments or housing into a disparate set of parts, and those parts can be sourced from suppliers across the country and the world and drive more efficiencies both upstream in design and downstream in [the] supply chain.”
Scherr said Juno serves as architect and engineer to design a project, though it sometimes partners with firms that have experience with local governments. It has a supply chain team that sources building materials, and then it works with general contractors to train them on how to make the construction more efficient.
Not only does Juno’s process save time, he said, but it removes uncertain variables in the design and construction process to make timelines more predictable, reducing one of the riskiest aspects of development.
“Changing the variability is ultimately a reduction of risk, and real estate development is an industry that’s all about risk management,” he said. “So being able to build a learning system not just to be cheaper but to be right is almost more valuable for reducing your cost of capital.”
Juno's mission also includes reducing the carbon footprint of the construction industry by sourcing more sustainable development materials and having a more efficient process. It is developing apartments with mass timber, a material that has been gaining adoption in the U.S. commercial real estate industry over the past few years.
The company has its own fully owned development entity that sources capital for new projects separate from its venture funding, and it is partnering with local development firms to build apartments using its platform. Its first project, a 24-unit multifamily building in east Austin, is under construction and scheduled to deliver next year. It has larger projects planned in Seattle and Denver totaling around 400 units.
Juno was founded in 2019 by Scherr, Chester Chipperfield, BJ Siegel and Marshall Everett, a group that has experience at Apple, Tesla and in the real estate development world. Scherr announced the company’s launch in a blog post in July 2020, along with a $12M seed funding round. Its latest $20M Series A round is backed by several major investors: Comcast Ventures, Real Estate Technology Ventures, Khosla Ventures, JLL Spark, Vertex Ventures, ANIM and K50.
The company also announced partnerships Thursday with construction firm Swinerton and Ennead Architects to help scale its model. Scherr said Juno plans to use the new funding to continue to build out its platform and help form new partnerships to expand its platform across the country. He said being involved with projects itself helps Juno prove the effectiveness of its model, but to tackle the magnitude of the U.S. housing shortage it will need to scale faster.
“We have a housing shortage in this country in the millions of units,” Scherr said. “For us to effectively change the conversation, we need to create a platform that makes it possible for not just ourselves to design and build but that allows others to design and build with the same approach, so over time the impact we hope to have will go well beyond the four walls of the projects we control.”