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BFD Expert Voices - Retail Deals

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Zephyr, a digital home services platform, raised $60 million in growth equity to fuel M&A, CEO Shawn Weidmann tells Axios exclusively.

Why it matters: Home services remain a hotbed of deal activity. 

Zoom in: Elda River Capital and the Pritzker Organization co-led the round, with participation from Juxtapose. Zephyr has raised about $100 million since New York-based venture studio Juxtapose launched it with Weidmann and co-founder Deklan Robinson in 2022.

How it works: The company brings local service providers from several markets into a central technology hub that supports recruiting, training, marketing, operations and finance.

Zephyr also helps technicians on the ground get specs on certain units that they're working on, or allows them to accurately size an HVAC unit in homes through 3D imaging.

Zephyr's platform has an AI-powered assistant for technicians as well.

Catch up quick: The New York-based company has inked 12 acquisitions to date in metro areas like Washington, D.C., Houston, Palm Beach and South Florida and Denver.

Occasionally, Zephyr will buy customer lists, but these businesses come with trucks and technicians too, and Zephyr brings all of them onto its platform, he says.

The company has closed seven deals this year and plans to close another two before year's end.

It aims to keep the same pace each year, though it will be "highly dependent on deal size, location, and complexity," Weidmann says.

What's next: Zephyr — projecting more than $100 million in revenue this year and growing 25% yearly — is targeting local HVAC, plumbing and electrical brands, Weidmann says.

Weidmann hopes to grow Zephyr to $500 million to $1 billion in revenue in the next three to five years.

What they're saying: "​​We are very comfortable investing off the balance sheet to make investments in technology that we think will fundamentally change the customer user experience," Juxtapose partner Geoff Miller says.

Because Zephyr acquires profitable businesses, this fresh capital will just help it make decisions on how big to grow, he says.

The big picture: The global HVAC market alone is projected to increase from over $260 billion last year to nearly $350 billion by 2028, according to Boston research firm BCC Research.

There's more demand for these services because of global warming and housing shortages.

"The ability to efficiently deploy resources around these home services needs is growing. There's great strategic tailwinds for us," Weidmann says.

The bottom line: "​​If you put those elements together: profitable, recurring service, fragmented [market] and [aging owners] looking for exit strategies, could I have described a better investor thesis?" Weidmann says.

Editor's note: This story has been corrected to say Weidmann hopes to grow Zephyr's revenue to $500 million (not $500 billion ) or to as much as $1 billion in three to five years.

Exclusive: Home services platform Zephyr raises $60M to fuel M&A pipeline

The company wants to acquire profitable, local businesses.

Illustration of a house stuffed to the brim with money, with some bills sticking out from the roof. 

Retail deals

Zephyr, a digital home services platform, raised $60 million in growth equity to fuel M&amp;A, CEO Shawn Weidmann tells Axios exclusively.Why it matters: Home services remain a <a class="gtmContentClick" data-vars-link-text="hotbed of deal activity" data-vars-click-url="https://www.axios.com/pro/retail-deals/2024/10/16/pe-consumer-dealmaking" data-vars-content-id="75bacd0d-01c0-442d-8f16-7fdd6b4d83af" data-vars-headline="Exclusive: Home services platform Zephyr raises $60M to fuel M&amp;A pipeline" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/retail-deals/2024/10/16/pe-consumer-dealmaking" target="_self">hotbed of deal activity</a>.

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Exclusive: Home services platform Zephyr raises $60M to fuel M&A pipeline

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