Houzz raising $400M at $4B valuation

In general I'd agree but why with Houzz? They have an actual market and the numbers make sense.

Shameless plug since I rarely see us mentioned on HN:

We're hiring for a large range of engineering roles including some more specialized positions in research (writing classifier models and machine learning operations) and 3d (computer vision, photogrammetry, rendering). There's a lot more behind the scenes than just pretty pictures.

http://houzz.com/jobs and mention HN

I agree, $4 billion is at least 2x-3x more than I would have expected. Housing and everything connected to it is obviously a wildly lucrative industry if you can find a way to skim a sliver out of any of the various layers. That's essentially what Houzz has done, injected themselves as a middle-man referral engine (no different than a Priceline or Kayak).

Zillow is chasing down $1.x billion in sales for the next four quarters. Seems remarkable as well.

Didn't know they're so big. Still considering posting my apartment's renovation photos there. Nice job feeling small and local.

Houzz is one of a few bigger unicorns that I actually believe has a chance in the long run. First of all, it doesn't depend on being sexy or trendy like a social network, so there's no reason why the business will fail eventually. People almost certainly won't be using Snapchat in 50 years, but they will be buying houses.

Additionally, houses are an absolutely massive market. Housing is the largest expense of most people I know, and there's a ton of price weirdness. A kitchen remodeling might cost $14k, and that's not something you can buy on Amazon, and it's not like you can get your kitchen remodel done in China for cheaper (well, unless your house is in China.) If you were planning on $15k for your remodel, and a local contractor would offer $14k, but Houzz sends you to a "Houzz professional" contractor that offers $16k, you'll probably trust Houzz and accept $16k without questioning too much.

That's two thousand dollars from one kitchen remodel right there. Of course, that's not how Houzz's business model works right now, but there are lots of ways they can make money. You're also not going to accept that price discrepancy from any other consumer-focused things. Say, a laptop: if the new Macbook was $1600 in Best Buy and $1400 on Amazon, almost everyone would just buy from Amazon.

Additionally, they have a surprising amount of name recognition among the wealthy. I know a decent amount of wealthy people, and a few ultra-wealthy people, and I've heard maybe 25% mention Houzz. If you can get even a tiny portion of the ultra-wealthy-house-spending market, you're golden. Remember, the ultrawealthy have most of the world's wealth, and they spend a lot of that on ridiculously fancy houses with no care about cost.

Finally, there's no "bomb factor". Maybe there'll be a scandal tomorrow about Facebook selling your photos to some evil actor. Maybe Snapchat will get a massive lawsuit about its storage of millions of inappropriate pictures of underaged people. But how are you going to get angry at Houzz?