Housing is one of the foundational engines of modern economies. The oft sought after “American Dream” is defined by homeownership. Homes are also the single largest purchase that most people will make in their lifetimes.
It is therefore obvious that any technological evolution should impact the sector. Unfortunately, this hasn’t historically been the case, and the process of building homes hasn’t changed in decades.
For single-family homes in the US, the time from permit to completion has been steadily increasing over the past decade.
What’s interesting, though, is that the above chart – which is one of the main ways that the US government tracks the efficiency of the construction industry in the US – completely ignores one of the most significant bottlenecks in the sector: preconstruction: the messy, fragmented stage between design and construction, where timelines are the most unpredictable.
Imagine the following scene: a young family finally purchases a home after working hard and saving for years. It’s not their dream home, so they hire an architect to make their dream a reality: The picket fence, doggy door, massive kitchen island, his and hers bathrooms, etc… The architect draws up the plans, and everyone’s ready to get started on construction. But the project doesn’t start. Every day for two months, the young family calls the architect to check in on the status of the project, but much to their dismay, the contractors still haven’t broken ground. Why? The municipality still hasn’t issued a permit.
It turns out that the above scene is not only common, it’s the norm. The time from design to permit is unnecessarily long, which causes severe dissatisfaction and frustration for all involved. To add insult to injury, this bottleneck is one of the causes of increased housing costs, which delays people’s ability to purchase a home in the first place.
This period of time between design to permit is dominated by various engineers who work in disconnected silos. These engineers are responsible for ensuring that the plans comply with local building codes and that the structural, electrical, mechanical, and plumbing systems are all in place and don’t conflict with one another. It’s a completely manual process that differs from state to state and is one of the paradigmatic examples of bureaucracy. A typical process includes the constant back and forth between the architect, the various engineers, and the municipality.
Spacial was founded to rewire this process from the ground up, using AI and automation to eliminate months of unnecessary back-and-forth.
The company combines tried and true licensed engineers with the frontier of AI research in order to transform how homes get built. Instead of a months long back and forth, Spacial enables architects and homeowners to go from plan to permit at the click of a button.
A few years ago, we wrote about the type of founders we’re looking to back in vertical AI. Spacial is the manifestation of this outline. Maor is a veteran of the construction industry, having built one of the most successful construction companies in Palo Alto, and Ami is a serial entrepreneur who has built systems that have reached mass adoption. Together they’ve built a truly unique team that combines deep technical expertise alongside state licensed engineers. Getting to know them and their vision has been a true joy.
Since we invested, Spacial has tripled revenue, launched in California, and expanded into MEP.
By leading Spacial’s seed round, we are betting that AI will help transform the way that homes are built. We are committed to helping engineers make the transition to an AI-first world. And we are confirming our belief that the American Dream is alive and well.
