Full-Stack, Digital Home Construction: Our Investment in AGORUS
While the construction industry is a critical component of our economy, it remains highly fragmented and slow to modernize — traits that contribute to our perennial housing crises. Recent estimations place the U.S. more than 5.5 million homes short of demand and average home prices have risen 18.8% from 2021. This demand and resulting price increases are driven by a number of factors, including supply chain constraints, high labor and material costs, as well as sclerotic productivity growth. For perspective, construction has averaged an annual productivity growth of less than 1% for the past two decades, compared to a yearly average of 3.6% in manufacturing.
However, despite these challenges, the total U.S. market for residential construction sits at $695.5 billion today. The good news is that productivity innovation is emerging to capture this 120-year-old critical market through new models of homebuilding, integration of virtual technologies and robotics to amplify human skills. To wit, we are thrilled to welcome AGORUS to the Toyota Ventures portfolio.
Founded in 2019 and based in San Diego, CA, AGORUS is eliminating many of the risks and inefficiencies associated with traditional homebuilding through its full-stack, software and hardware platform. By streamlining the way residential developers approach construction, AGORUS is vertically integrating and automating offsite manufacturing in three phases.
The first is digitization. Custom construction drawings (ADU, Single Family, Multi-Family, or Apartments) are input into AGORUS’ software to automate the drafting and structural engineering plans. Developers have access to bills of material, real-time price estimates, virtual walk-throughs, and installation guides. Every material and hardware item is accounted for and updated in real-time based on plan adjustments and market fluctuations. Second, panels are manufactured. Custom walls, floors and roofs are built offsite as 2D panels, all to the exact specifications, in a matter of hours. Finally, the manufactured panels are sent to the jobsite for final assembly, where a 2500 sq. ft. home can be installed by tradesmen in a matter of 2–3 days, compared to traditional timelines of 2–3 months.
Additionally, with nearly 50% of the world’s carbon dioxide emissions generated from the built environment, creating tighter, more thermally advanced structures is critical to reducing our global carbon footprint. Through their advanced construction technology and commitment to sustainability, the company aims to become a zero-waste manufacturer and launch a Net-Zero Ready product line in 2023 — efficient and green!
Of course, we’re fans of AGORUS’ innovative approach because, in many ways, it parallels the philosophy of the Toyota Production System, which is based on the complete elimination of waste in pursuit of the most efficient production methods. At scale, AGORUS is able to cut developer costs through the removal of excessive raw materials, save time and labor, and handle more than one project at any given time. Thus, AGORUS is already able to produce a single-family home, accessory dwelling unit (ADU), or multi-family unit every day. At full speed, the company expects to produce a single unit every few hours.
It often takes an outsider perspective to truly understand what change might look like — which has certainly been the case with the AGORUS team. The company was co-founded by Garrett Moore (CEO) and Kyle Tompane (CTO), both former Navy SEALs. When the two retired from service, they entered the world of construction and quickly realized the key pain points of the industry that could be overcome through digitization. Since then, the pair have built a team that includes cross-functional experts from around the world, (including a few more former Navy SEALs), who bring an unparalleled tenacity and drive to improve how the world builds homes.
We are proud to support the AGORUS team as they work to close the current housing shortfall with a transformative new approach to homebuilding. Special thanks to our senior associate, Erin Keller, who played a key role in driving Toyota Ventures participation in the company’s Seed round, which was led by Blackhorn Ventures. Other participating investors include Point72 Ventures, Signia Ventures, DivCoWest Ventures and Kennedy Wilson, among others.
Visit the AGORUS website or the Toyota Ventures portfolio page to learn more.
