Peter Thiel, others help home remodeling startup BuildZoom raise $10.6 million

(Reuters) - Peter Thiel, the Silicon Valley investor who co-founded PayPal and invested in Facebook in 2004, has now invested in BuildZoom, a Y Combinator-backed startup that helps U.S. customers find contractors for remodeling projects.

Peter Thiel in Beverly Hills, California May 1, 2013. REUTERS/Gus Ruelas

BuildZoom said on Wednesday it raised $10.6 million in a Series A funding round led by Joe Lonsdale of venture capital firm Formation 8, with participation from Thiel’s Founder’s Fund and Y Combinator, the startup machine behind companies such as Dropbox, Airbnb, Reddit and Stripe.

Lonsdale, a former PayPal executive and co-founder of data company Palantir Technologies, will also join the board of BuildZoom, the company said.

BuildZoom, started in 2011 by childhood friends Jiyan Wei and David Petersen, has now raised $14.3 million since 2013, when it was incorporated.

Y Combinator had invested $18,000 in BuildZoom in 2013 and its latest funding is one of the incubator’s first instances of post-seed funding.

BuildZoom raised $2.15 million last October, which valued the company at $26-$28 million. That round was also led by Formation 8, co-founded by Lonsdale and best known for backing virtual reality company Oculus VR.

BuildZoom helps people find a contractor by analyzing their building permits and project history, relying more on big data than on reviews and recommendations. Its database of more than 3.5 million contractors is the largest in the United States.

The contractors pay BuildZoom a commission based on the size of the project, with smaller projects attracting higher commissions.

The company’s annualized revenue grew 800 percent in September compared with a year earlier, BuildZoom co-founder and President Wei said in an interview.

Wei said BuildZoom has had four or five takeover approaches in the last two quarters, but the founders are not looking to cash out.

Reporting by Anya George Tharakan in Bengaluru; Editing by Savio D’Souza