Homeowners looking to expand their livable space – to accommodate aging parents or drive income through rentals – can find themselves with limited options. Buying a bigger home can be cost-prohibitive or (at the very least) painstaking and inconvenient. Renovations, on the other hand, require an expert’s grasp on local zoning and permitting laws and sometimes years of work to see them through.
In light of that, it’s no surprise that ADUs (accessory dwelling units) – or “backyard homes” – have been in high demand since California eased regulation around their permitting in 2017. With California leading the charge, in an effort to thwart the growing in-state housing gap, the market for ADUs has sprung up overnight and has no signs of turning back. In 2019, California homeowners built around 12,000 backyard homes – a 10X increase since the state eased regulation (Bloomberg). Other states are now aggressively following suit.
Simply put, ADUs are one of the fastest and most cost-effective ways for communities across America to tackle the crisis in the availability and affordability of housing.
Today, we are excited to announce that we are leading the Series A investment in Abodu, the leading provider of turn-key backyard homes. We are joined by seed investor Initialized Capital, as well as Redfin CEO Glenn Kelman and former Stockton, California Mayor Michael Tubbs.
John Geary and Eric McInerney founded Abodu in 2018 and have scaled the company to quickly become the leader in the burgeoning ADU space. Recognizing consumer demand for backyard homes, John and Eric launched their flagship Abodu One (500 sq. ft. one bedroom), followed by their Abodu Studio (340 sq. ft.) and Abodu Two (610 sq. ft. two bedrooms).
Abodu’s beautifully crafted units are hardly the only selling point for the company. John, Eric, and their team manage the end-to-end process of permitting, building, and installing on behalf of their customers. And with the expedited permitting that Abodu has been granted in over two dozen cities, it has faster time-to-installation than other ADU market participants. The result has been very high levels of customer satisfaction and rapid growth.
As prefabricated units, each Abodu home is factory-built and HCD pre-certified through partner manufacturers so that homeowners can enjoy their backyards – without the inconveniences of on-site builds. After receiving the requisite approvals through their pre-approvals process, Abodu delivers the backyard home and spearheads the installation. Through their Quickship program, this time to key handover can be as little as 30 days – a remarkable feat made possible by Abodu’s capital-efficient model and streamlined process.
Consumers and cities alike feel the pain of the housing gap, yet John and Eric at Abodu are building an efficient and scalable model to grow net new housing up and down the West Coast. Their homes are now available for sale in Northern CA, Southern CA, and the Seattle metro area – with more to come.
Ultimately, we were attracted to Adodu for multiple reasons including the vision and passion of John and Eric, the large and growing market opportunity for ADUs, and Abodu’s unique ability to permit and install ADUs with speed, predictability, quality, and cost-effectiveness. The company has taken off and hit launch velocity. Congratulations to the entire Abodu team on this Series A milestone – we are excited to partner with them as they lead the charge to make housing more affordable and available in communities across America.