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Thursday, June 20, 2024

NC trend: Durham’s Higharc presses to streamline residential construction.

In 2018, Marc Minor wanted to build his family a new home in Durham, just north of Interstate 85. But he became frustrated during the design process at how long it was taking.

“It was very surprising to me how much of the Dark Ages the housing industry was in using software,” says Minor. “I realized that we could make the process much better for builders
and for homebuyers by applying many of the software ideas used in manufacturing.”

Minor, who had been working for 3D printing startups Carbon3D and Desktop Metal, raised $5 million to start Durham-based Higharc with three co-founders. Two used to work for AutoDesk, a San Francisco-based software company with annual revenue of $5 billion, and one from the video game industry.

Homebuilders now use Higharc software to help design homes, order building materials and market to potential homebuyers. They can sit down with builders to adjust color schemes or configuration of rooms using the software, which automatically changes orders for wood, paint and other supplies. The software can reduce the time required by builders to design and market new-home communities by 75%.

Higharc’s efforts are attracting prominent investors, who put up $53 million in February. The 18-member group included Home Depot and former AutoDesk CEO Carl Bass. Since 2018, the business has raised $78.7 million.

Minor expects Higharc to turn a profit within a few years. “We’re in it for the long run,” he says, sitting in his 3,000-square-foot home, which was finished during the pandemic and served as inspiration for the company’s software. “We’re in it to influence how homes are designed and built.

Epcon Communities, which built about 300 homes in the Raleigh and Charlotte markets last year, started using Higharc’s software in the fall of 2021, says Paul Hanson, president of franchising and product development. He says the company previously designed homes using one software, marketed in another software and developed pricing estimates for construction in a third.

“We were skeptical [about Higharc],” says Hanson. “We tested it in a community in Cincinnati and spent a lot of time giving feedback on what we wanted to see in the drawings. And so they changed what they were doing.”

Now, the software has “purchasing capabilities and instant access to the amount of materials such as drywall and studs and windows. And they have a feature where sales consultants can see the inside of the house and walk through selections with a customer.”

Such features eliminate confusion by the buyer, Hanson adds. “Now they can see everything down to the color selections,” he says. “We’re really thrilled with the marketing capabilities.”

The cost of the Higharc software is more than what it was previously using, but Epcon had digested that expense because of the shorter sales cycle and the elimination of construction errors, he says. He declined to share details because of a confidentiality clause.

Minor believes that the software, which is primarily employed by smaller and regional builders, will eventually be used to build most homes. AutoDesk’s AutoCAD, introduced in 1982, now has a 90% market share in U.S. home design.

He also notes that Higharc’s software allows builders to adjust for market changes, such as higher interest rates that can force buyers to adjust their ideal price. “If the home market changes and buyers all of a sudden don’t have as much purchasing power, how do you change what you’re building?” he asks. “Our strategy is to enable the people who build houses to have a higher margin and in the long run, improve the affordability of houses.”

Chris Roush
Chris Roush
Chris Roush is executive editor of Business North Carolina. He can be reached at croush@businessnc.com.

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