Tyson Chen and Apurva Shrivastava were chasing restaurants when they found an HVAC company.\u00a0<\/p>\n
The two engineers had first met at MIT poker night and built an AI system to handle missed calls\u2014originally, they thought this made sense for restaurants, specifically. But, as Chen and Shrivastava wandered a Texas restaurant conference, a Dallas heating and air company called Rescue Air found them.<\/p>\n
\u201cWhen a restaurant misses a phone call, that\u2019s a $30, $40 order,\u201d said Chen. \u201cWhen a home service business misses a phone call, that could be a $30,000, $40,000 HVAC install they\u2019re missing. So, instantly, we thought: \u2018wait, this is a completely different order of magnitude.\u2019\u201d<\/p>\n
Chen and Shrivastava already were in town, and spent an afternoon with Rescue Air: \u201cWe realized in those few hours that if we could solve this problem well for Rescue Air, it could be massive,\u201d Chen added.\u00a0<\/p>\n
For three months in 2023, Chen and Shrivastava built a product especially for Rescue Air\u2014who then helped them find the first several customers for their startup Avoca, which builds AI agents helping physical services businesses take inbound calls, schedule, follow up on estimates, and run dispatch. The universe of businesses Avoca serves\u2014HVAC, plumbing, roofing, and electrical businesses\u2014isn\u2019t the most online. It was network effects, trade shows, and conferences that got them to their first 10 customers, and to the more than 800 customers they have today.<\/p>\n
Avoca, over the last couple years, has raised more than $125 million, valuing the company at $1 billion, Fortune has exclusively learned. The $125 million is across three rounds of funding, including a Series B led by Meritech and General Catalyst and a Series A led by Kleiner Perkins. (Y Combinator led the seed back in 2024.)<\/p>\n
\u201cThis is definitely an industry that\u2019s been overlooked by Silicon Valley,\u201d said Leigh Marie Braswell, Kleiner Perkins partner. \u201cI think people don\u2019t realize how big it is or, quite frankly, how important it is. A company like Avoca is a necessary bridge between Silicon Valley and Main Street, these extremely critical businesses that AI can help.\u201d<\/p>\n
The HVAC industry alone in 2025 was worth about $50 billion, with some estimates stretching to $75 billion by 2032.\u00a0<\/p>\n
\u201cThis is a huge growth moment in the home services economy,\u201d said Shrivastava. \u201cAll these stories are coming out now that basically say, \u2018with all that\u2019s happening in AI, the next million-dollar-job is the job of plumber, the job of the technician\u2026What Avoca has realized is these people are the main characters. No AI wave\u2019s replacing the job of a technician at least [in] the next five years.\u201d<\/p>\n
There\u2019s no shortage of startups attracting funding in the AI call center space, to be sure. And it\u2019s a wild market where long-term winners are hard to pick. Avoca\u2014named for a body of water in Ireland where two rivers merge to one\u2014has something of a first-mover advantage in its space. Does Braswell, an early Scale AI employee with a reputation for backing technical winners<\/a>, believe a \u201cfirst-mover advantage\u201d matters?<\/p>\n \u201cI like the phrase \u2018head start\u2019 better,\u201d said Braswell. \u201cIt\u2019s more intellectually honest.\u201d<\/p>\n There are frameworks for the market Avoca\u2019s chasing (consider ServiceTitan, venture-backed and one of last year\u2019s limited number of notable IPOs). But, generally, this is a startup focused on one of those great, ubiquitous but invisible spaces\u2014I don\u2019t think about my sink or AC when it\u2019s working, but when it\u2019s not? It\u2019s just about all that matters at that moment.<\/p>\n \u201cWe consider ourselves to be building for the physical economy, and often they\u2019re the people who get left behind,\u201d said Chen. \u201cEveryone\u2019s trying to build for the Fortune 500, but there\u2019s this giant, trillion-dollar economy no one is touching.\u201d<\/p>\n See you tomorrow,<\/p>\n Allie Garfinkle Submit a deal for the Term Sheet newsletter here<\/a>.<\/p>\n Joey Abrams curated the deals section of today\u2019s newsletter. Subscribe here<\/a>.<\/p>\n VENTURE CAPITAL<\/p>\n – ComfyUI<\/a>, a San Francisco-based platform designed for building AI workflows for visual AI, raised $30 million in funding. Craft led the round and was joined by Pace Capital, Chemistry, TruArrow, and others.<\/p>\n – PxX Partners<\/a>, a Singapore-based user acquisition financing platform for gaming and consumer apps, raised $10.5 million in Series A funding. T-Accelerate led the round and was joined by Play Ventures, General Catalyst, and others.<\/p>\n – TriFetch<\/a>, a San Francisco-based automation platform for clinic workflows, raised $1.9 million in pre-seed funding. Nexus Venture Partners led the round and was joined by angel investors.<\/p>\n PRIVATE EQUITY<\/p>\n – American Industrial Partners agreed to acquire the Warehouse and Workflow Solutions business of Honeywell<\/a>, a Charlotte, N.C.-based developer of systems and technology for the aerospace and infrastructure industries. Financial terms were not disclosed.\u00a0<\/p>\n IPOs<\/p>\n
X: @agarfinks<\/a>
Email: alexandra.garfinkle@fortune.com<\/a><\/p>\n