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Online Start-Up Houzz Taps Tech to Reinvent Design Industry

Houzz iPad app
Source: Houzz
Houzz iPad app

Houzz, an online residential remodeling and design community, is looking to transform the $300 billion home remodeling industry through technology.

Houzz helps connect remodelers, designers and other home renovation professionals with clients, using technology to help build their brands. Homeowners use Houzz to brainstorm ideas, research and hire home professionals and manage projects.

The platform has brought a Pinterest-like model to real estate, where users can share designs and build an "ideabook" for their next project.

On Tuesday, Houzz announced a $35 million Series C financing round to continue developing its technology, signaling the next step for the company.

"We need to accelerate in order to provide the demand for our platform. The money we raised will allow us to keep hiring great engineers and designers," said Adi Tartako, Houzz CEO, on CNBC's Squawk on the Street Tuesday.

The Palo Alto-based start-up currently has 60 employees, but its user base has grown rapidly, mainly by word of mouth, since it was started four years ago.

With over 1 million images, the company currently has the largest database of professionally-designed homes on the internet.

Houzz revealed Tuesday that it currently has 12 million monthly users, 89 percent of whom are homeowners.

"Houzz aims to help make everything more efficient," Tarkako said. "Technology provides the ability for users to have access and to achieve the look they want while staying within their budget."

Professionals and homeowners interact with each other in the Houzz community.

Houzz also announced Tuesday the launch of Houzz Pro+, a new product for professionals that will also provide a dual revenue stream for the company.

As part of the new platform, architects, contractors and interior designers that use Houzz can pay an annual fee to have their work featured in specific markets and categories on the site.

This new professional platform is only available in select U.S. cities but will eventually be available nationwide. The service became available in December and is already sold out in several metro areas.

To date, over 160,000 home professionals use Houzz as a marketing tool to generate new business.

Tartako said that Houzz frequently gets feedback from professionals, who comment on the different ways they are using Houzz and how it is changing their business.

She also said that the roll out of the new professional platform is not going to take anything away from Houzz's free community.

"This is something we have had a lot of requests from professional community to develop," Tartako said. "For us, it has always about the user experience and how to we can build the best technology and products for our users, whether they are homeowners or professionals."

Amy Pack is a CNBC producer for "Squawk on the Street"

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