Our Investment in Cottage
By Chad Byers, Co-founder & General Partner at Susa Ventures
Susa Ventures is excited to announce our investment in Cottage, a Bay Area-based startup enabling homeowners to build custom ADUs (Accessory Dwelling Units).
This investment is particularly special, as it’s the first company to launch from our EIR program. Our model is to co-lead these rounds, and we’re thrilled to be partnering with Base10 Partners on Cottage.
Alex Czarnecki, the founder and CEO of Cottage, might sound familiar because he joined Susa as Entrepreneur in Residence in March 2019. He goes back even further with Chad, as high-school classmates. Alex has been a part of the Susa Family for a long time, and we are thrilled to welcome the rest of the Cottage team to the family as well.
At Susa Ventures, we spend time thinking about how technology can solve some of humanity’s biggest problems. One such problem, that hits close to home in San Francisco, is housing affordability in our nation’s cities. To be clear, it’s not just a San Francisco issue.
In top metro areas, it takes 25+ years to save for a downpayment on a median-priced home earning the local median income, with cities like Los Angeles, Honolulu, New York City, and Miami all rising to 35+ years of median income needed to save for a downpayment on a median-priced home.
It’s hard to solve the housing crisis without a meaningful increase in supply. In practice, it’s not that easy. Politics aside, there are many reasons why this hasn’t happened at a pace necessary given population growth and urbanization.
As we looked at this problem, we kept coming back to ADUs as one of the best solutions. It creates new inventory within the footprint of existing homes. It’s often 3–5x cheaper than new apartment construction, easier to get permits, and provides an income-generating asset for homeowners. Furthermore, new legislation is coming along, which will accelerate the pace of adoption.
Cottage is building a platform for ADUs. They want to be a turnkey solution for any homeowner to build a custom ADU, from design, to permitting, to construction. There are a number of startups building the actual ADUs, but none we’re aware of taking a platform approach. Cottage is betting that the majority of the market will want custom ADUs, given how unique each property and use case can be, and Cottage will be that solution. There are 1M single family homes with garages in the Bay Area, and prefabs can’t make an ADU out of any of them.
There is no better entrepreneur in the world to build this than Alex Czarnecki. After spending five years at Uber as a city launcher on ridesharing and then GM of the UberEats business, he is particularly suited to build a business at the intersection of technology and the real world. As a Bay Area native, he’s seen first hand the impact a housing shortage can have on a city, it’s culture, and it’s people. We also love that he was living in a 300 sq. ft. ADU when he started Cottage.
We’re thrilled to partner with Alex and the rest of the Cottage team to tackle this important problem and help homeowners make the most of their properties.
