This Entrepreneur Raised $70 Million To Automate Home Building For Maximum Cost Efficiency And Value

In the realm of entrepreneurship, there are tales of resilience, innovation, and the relentless pursuit of turning dreams into reality. Jemuel Joseph’s journey embodies all these elements and more, from his humble beginnings in Ethiopia to co-founding Cover, a revolutionary company reshaping the future of housing.

In an exclusive interview, Jemuel shared insights into his upbringing, the challenges he faced, and the remarkable evolution of Cover. He also talks about the challenges he faced with acquiring funding for his company and the rejections he faced.

Listen to the full podcast episode and review the transcript here.

A Childhood Shaped by Nature and Curiosity

A blend of simplicity and curiosity marked Jemuel’s childhood in Ethiopia. Growing up amidst nature, he found himself enchanted by the world beyond.

Jemuel’s childhood was essentially a great experience with the ideal blend of watching TV and reading books–not too exposed to technology but having an awareness of what was going on.

Despite the slower pace of technological advancement in Ethiopia, Jemuel’s innate curiosity ignited a desire to explore broader horizons beyond his homeland. He remembers wondering why dial-up internet was so slow and the bandwidth so limited.

A Leap of Faith to the Land of Opportunity

When his parents made the pivotal decision to move to the United States, it marked a new chapter in Jemuel’s life. The transition to a new country brought its own set of challenges, but it also opened doors to a world of possibilities.

Jemuel did his high schooling and college in the US and had a whole new life with new friends. Moving to the US, one of the first things that fascinated him was access to knowledge, the Internet, and information.

With a solid foundation in English and a thirst for knowledge, Jemuel embraced the opportunities that awaited him in his new homeland.

Nurturing Creativity Through Architecture

Choosing a path in architecture was a serendipitous decision for Jemuel, driven by his passion for technology, design, and building websites from a very young age. Even in Ethiopia, he has started to think about his future profession.

Although software engineering in 2006-2007 wasn’t as clear of a path as it is now, Jemuel had always known he wanted to work in the field of technology.

So, he picked a career that would give him the maximum chance to do something in the design field or build things virtually on computers.

Initially, he thought this would be web development or 3D animation. Still, he found architecture that merged building things virtually and physically, with at the same time a solid basis in liberal arts education and humanist views.

During his journey in architecture school, Jemuel met his future co-founder, Alexis Rivas, laying the groundwork for what would eventually become Cover. The convergence of their shared observations and aspirations sparked the inception of a groundbreaking idea.

As the duo went through school, they started to realize that the pace of architecture wasn’t even close to the pace of technology.

As a 20-year-old thinking about the next 10 years, he noticed that there were engineers pushing code to millions of people and raising capital to make their vision a reality.

In contrast, people graduating from architecture spent the next two decades working through the corporate ladder and not having agency and autonomy. Jemuel quickly decided that this wasn’t something he wanted to do.

He also started paying a lot of attention to what was happening in the venture world, particularly when Y Combinator and companies like Stripe, Airbnb, and Dropbox were taking off. Jemuel started exploring a similar thing but with a different dimension.

The Birth of Cover: Redefining Home Construction

The genesis of Cover stemmed from a shared vision to revolutionize the way homes were built. Recognizing the inefficiencies and limitations inherent in traditional construction methods, Jemuel and his co-founder embarked on a mission to reimagine the entire process.

Their approach, centered on mass production, customization, and streamlined operations, laid the foundation for Cover’s innovative business model. Jemuel and his co-founder wanted to find solutions for the limiting factors in architectural projects.

For instance, they noticed that the consultants coordinated efforts to build one-off very expensive homes. All they needed to do was to design a product and build it over and over again.

This simple strategy could eliminate a lot of those coordination costs and probably make housing much cheaper.

Alexis went to work for a prefab company over the summer and shared their observations. For Jemuel, it was about the pace of progress and technology, and for Alexis, it was about the core issues he was identifying.

After discussing the limitations that were stalling the progress of architecture and construction, the duo came to the conclusion that they could tie three aspects that hadn’t been tried before. If they could accomplish that, they would have the best chance of offering high-quality housing at scale.

These aspects became the cornerstones of Cover. Ultimately, Jemuel and Alexis build homes for people. Instead of going the conventional way and approaching a general contractor, people can come to Cover.

The Cover Business Model

Cover builds homes like cars but redesigns and reengineers the product for mass production at scale. In the future, house-building factories will look very much like car factories where there’s automation and an assembly line.

The factories will build components like panels and other pieces that can be rapidly assembled into various layouts. Next, Cover would let homeowners customize the layouts so that even though they’re getting their home built in a factory, they can still configure the layouts and finishes.

At Cover, they streamline the entire process by building the software internally. A typical architecture firm has people managing every element of the process, such as drawing plans, getting permits, creating construction drawings, and other documentation.

These operational processes drive up the building costs, which are eliminated. At Cover, even if it is a custom layout project, they can automatically generate permit sets and do the structural calculations instantaneously.

This simple approach lowers costs for customers who need not pay for overheads.

Timelines are shorter, and now it’s possible to build homes like cars by using panels that can be reconfigured and software to streamline other aspects of the process like pricing, permitting, and structural engineering.

The YC Fellowship

Jemuel talks about his experiences with the YC Fellowship, which is different from the Y Combinator, the accelerator program. He applied for the Y Combinator but wasn’t a good fit since they had yet to build their first home.

Instead, Jemuel and Alexis got into the more minor program in which they’d give entrepreneurs $20K. They duo was allowed to build over the summer while also meeting with partners and accessing the networks. They also had a demo day where they met their first institutional investors

Although Jemuel and Alexis didn’t get into YC core, they used the money to move to the West Coast and live in a house. They built their first Cover concept in a parking lot along with two other people.

Navigating the Venture Capital Landscape

Raising capital for a hardware startup posed its own set of challenges, particularly in an ecosystem dominated by software-focused investors.

However, Jemuel’s perseverance and strategic approach garnered the attention of visionary investors who shared his belief in Cover’s transformative potential.

With each funding round, Cover gained momentum, attracting top-tier investors who recognized the company’s disruptive impact on the housing industry. Jemuel goes over the entire fundraising journey that started while they were still in New York City.

Even while in college, Jemuel and Alexis noticed that the venture community on the East Coast wasn’t interested in hardware or hard tech at that time. Instead they were investing in software or consumer products. They knew soon enough that they would have to raise capital in the Bay Area.

Even after their first $20K, there weren’t a lot of venture capital firms investing in housing startups or hardware.

These verticals were considered risky since they were capital-intensive. But the initial funding helped them build the first prototype that people could see, touch, feel, and understand what it could be.

Soon after, Jemuel and Alexis attracted funding from Niko Bonatsos at General Catalyst and Vinod Khosla at Khosla Ventures. These investors understood the ultimate potential and the importance of solving the problem.

Later, Cover ended up raising a $10M Series A, which they used to sell houses to their first customers. They showed that they could deliver and that the houses could be installed and were of excellent quality.

From that point on, Jemuel and Alexis continued raising further rounds of capital, sometimes meeting with and pitching to investors over weekends.

Storytelling is everything, which is something that Jemuel Joseph was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend Peter Thiel (see it here), where the most critical slides are highlighted.

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Overcoming Obstacles with Strategic Problem-Solving

In the face of unexpected obstacles, Jemuel’s approach to problem-solving is methodical yet pragmatic. Rather than rushing to find quick fixes, he emphasizes the importance of understanding the root causes and collaborating with the right stakeholders.

This deliberate approach has proven effective in addressing challenges and driving continuous improvement within Cover’s operations. A lot of Cover’s investors have also invested in companies like Tesla and SpaceX and followed the journey from the very first institutional round.

A Vision for the Future: Building Communities with Cover

Looking ahead, Jemuel envisions Cover not just as a home construction company but as a catalyst for building communities and even cities.

By leveraging technology, scalability, and a commitment to quality, Cover aims to empower individuals worldwide to realize their dream of homeownership.

From customizable homes to innovative living experiences, Cover’s vision extends far beyond traditional boundaries, shaping the future of urban living.

Jemuel looks forward to a time when people can go online to find and purchase a property, build a house on it, and move into it within a fixed timeline, complete with a fixed cost and great quality.

Cover can take care of the manufacturing, permitting, and installation and have the house ready to move in within eight months. Owners only need to bring their furniture. Solving the manufacturing problem is the initial step toward creating all kinds of living experiences.

Fostering Dynamic Relationships for Growth

Central to Cover’s success is its dynamic relationship with investors who share a deep understanding of the challenges and opportunities inherent in the company’s mission.

By fostering open communication and alignment of vision, Cover leverages the expertise and networks of its investors to fuel its growth trajectory.

Lessons Learned and Future Endeavors

Reflecting on Cover’s journey, Jemuel acknowledges the importance of staying focused on solving the core problems at hand. As the company continues to evolve, he remains committed to tackling challenges with resilience, innovation, and a relentless pursuit of excellence.

In conclusion, Jemuel Joseph’s story is a testament to the transformative power of entrepreneurship and the pursuit of a bold vision.

From humble beginnings to the forefront of innovation, his journey exemplifies the spirit of perseverance, creativity, and unwavering determination to make a difference in the world.

As Cover continues redefining the future of housing, Jemuel’s story inspires aspiring entrepreneurs everywhere, reminding us that anything is possible with passion and persistence.

Listen to the full podcast episode to know more, including:

• From Ethiopia to Silicon Valley, Jemuel Joseph’s journey embodies resilience and innovation in pursuit of the American Dream.
• Cover’s inception stemmed from a shared vision to revolutionize home construction through mass production, customization, and streamlined operations.
• Overcoming obstacles in the venture capital landscape, Cover attracted visionary investors who recognized its transformative potential.
• Strategic problem-solving guided Cover through unexpected challenges, emphasizing understanding root causes and collaboration for effective solutions.
• Cover’s future vision extends beyond home construction, aiming to build communities and cities by empowering individuals worldwide.
• Dynamic relationships with investors fuel Cover’s growth, leveraging expertise and networks to drive innovation and scalability.
• Jemuel Joseph’s story inspires aspiring entrepreneurs, highlighting the importance of perseverance, creativity, and unwavering commitment to making a difference.

 

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For a winning deck, see the commentary on a pitch deck from an Uber competitor that has raised over $400M (see it here). 

Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.