California’s housing and development wars are heating up, and venture capital
is betting on a strong ADU market.
Fifth Wall, a proptech-focused venture capital firm based in Southern California, led a $15 million Series A round for ADU company Cottage, according to an announcement today. Two-year-old Cottage, based in San Francisco, describes itself as a “one stop shop” for homeowners looking to build ADUs — accessory dwelling units that can be added on residential lots and are often known as granny flats or mother-in-law suites.
Fifth Wall will get a seat on Cottage’s board.
The fundraising round closed on Wednesday, and also counted participation from 1Sharpe Ventures, DivcoWest and other investors.
Cottage is currently building in the Bay Area and L.A., and operates as a platform to streamline the ADU building process: Homeowners who want to build a granny flat can customize floor plans and designs on Cottage’s site, and the company then handles permitting and partners with local builders. Its use of technology, the company claims, ends up saving homeowners “months of time and thousands of dollars.” Contractors who use the platform also benefit from having a pipeline of work and other tools, it says.
a legislature has passed a suite of laws aimed at accelerating ADU construction, and construction of the units has indeed picked up. In 2020, according to research at UC Berkeley, nearly 9,000 ADUs were built in the state, about 3,000 more than two years earlier. But some cities have also resisted the construction, and the state’s development battles are only intensifying: In recent weeks, a brewing conflict between cities and the state has been escalating over the sweeping housing law SB 9, a pro-development law that could also lead to more ADU construction.
Read more
Construction
New York
Construction startup raises $20M in round led by Fifth Wall
Residential
San Francisco
Not just mountain lions: California cities gird to block state housing efforts