- Social network expands Messenger app as e-commerce platform
- Startup Pro.com will connect Messenger users, contractors
Facebook Inc. is the latest technology company that wants to connect you with a handyman who can install a ceiling fan or fix a leaky toilet, following Amazon.com Inc., Google Inc. and a slew of startups seeking ways to make money from the $300 billion home-improvement market.
The social networking site is joining with Seattle startup Pro.com, which will help a Facebook Messenger user find a qualified contractor, get an instant quote and schedule an appointment within minutes on home projects from mounting a big-screen television to painting a room. Pro.com, which operates in more than 5,500 U.S. cities, also unveiled on Wednesday a similar text-messaging service separate from Facebook.
The arrangement shows how Facebook is trying to attract and keep new users by expanding its messaging app for communication between businesses and customers. Messenger, which boasts 700 million monthly users, is also used by e-commerce sites Zulily, Everlane and Fancy. More than 90 percent of the social network’s $12.5 billion in annual revenue last year was generated by advertising.
Facebook won’t make any money off the Pro.com arrangement initially. However, the company is mimicking Tencent Holdings Ltd.’s WeChat, which combines a smartphone instant messenger and digital wallet that can be used for e-commerce. Facebook in March announced it would let users make debit card payments to one another through Messenger.
The social network’s partnership is also the latest example of the technology rush into the home improvements market, seen as the next frontier in the on-demand economy that gave rise to ride-hailing service Uber Technologies Inc. and room-booking service Airbnb Inc.
"The bar keeps rising on what customers expect in terms of convenience, trust and immediacy," said Matt Williams, founder and chief executive officer of Pro.com. "That’s where this is headed, being able to get anything you need through your mobile phone."
Home improvement spending will hit $318 billion in 2015, an increase of 4.4 percent from the previous year, according to the Home Improvement Research Institute in Tampa, Florida. More than one-third of contractors subscribe to technology-based lead generation services such as HomeAdvisor.com, up from just 15 percent two years ago, said Pam Heidel, managing director of the institute.
"Homeowners are more tech savvy and they do their research online," she said. "These services get them connected."
Venture capitalists are backing technology companies that aim to bring transparent pricing to home improvements and reduce the risk of hiring a contractor. The new services take commissions on each job, challenging the business model of Angie’s List Inc., which charges consumers for access to reviews and also sells advertising.
Pro.com’s investors include Silicon Valley firm Andreessen Horowitz and Seattle’s Madrona Venture Group. Porch.com, a Seattle home improvement startup that is partnering with Lowe’s Cos., has raised about $100 million the past two years, including a January round led by Valor Equity Partners in Chicago. San Francisco startup Thumbtack Inc., which allows users to book a variety of services including home improvement, has raised more than $200 million from such investors as Google Capital and Sequoia Capital.
Amazon.com in July expanded to 15 cities its home services program, which lets people find prescreened plumbers, rug cleaners and even yoga teachers. Amazon takes a 10 percent to 20 percent commission for each job booked through the site. Amazon CEO Jeff Bezos is an investor in Pro.com.