Why we invested in Beagle Services
Household leaks are the worst. They cause extensive, expensive, and disruptive damage as the drips gather over weeks before you even notice. Fixing them is also a nightmare - identifying them, managing plumbers, restoration companies, painters, all the while engaging in a nice big fight with your insurer as you try and get the kids to school on time. To boot, the average household leak wastes 10,000 gallons of water per year, nearly 1 trillion gallons of water annually nationwide. The traditional model of plumbing services means lost money, time, hair, shortened lifespan due to stress, a massive pile of admin, more money, and a lot of water.
Enter Beagle Services, who are a new breed in the $128.7bn domestic US plumbing market - and multiples of that worldwide. They are a next-generation plumbing company built on the central idea that a plumbing company should be a water security provider. There is now a critical mass of customer-facing IoT that allows households to detect, prevent or fix water leaks well before they have time to do any damage. This technology exists and is proven, but there are massive market gaps with installation, monitoring, and proactive return service work - in fact, most plumbers aren’t aware of and don’t know how to handle this shift in the market. Bridging these gaps is a huge opportunity, with an expanding group of national insurers and utility providers who can now deliver water security services to homeowners through Beagle’s platform - through own-brand and third-party plumbers. Here’s why we invested.
GIANT Market Ready for Something Different
10% of US homes experience water leaks per year, wasting 90 gallons or more per day. Home leaks cost $20bn in damages per year, most but not all of which is shouldered by insurance companies, with an average insurance claim at $11k - the industry’s second-largest avoidable payout expense. Beagle Services is building an entirely different model around the critical job to be done of water security. Their customer promise is no longer “I will install your shower and then bounce,” it’s “We will install this unit and monitor the data coming off it, minimizing the likelihood that you have a water issue in your home, and if you do, we will manage the issue AND get you the best-priced insurance.” It allows the homeowner and the insurer to stop worrying about water damage.
Outrageous Founder/Market Fit
To deliver on that customer promise, plumbing services need to be centered around both the tech and the service of water security. That is tough to achieve because you need both the knowledge about the next generation of water tech and the technical wherewithal to serve the partners, ingest customer demand, serve them efficiently, and then monitor and respond to events. While leading the commercial work at Flo Technologies (IH2O 2017, sold to Moen), Paul Vacquier (CEO) and Glenn Stewart (COO) realized that while the technology to ensure water security for the customer now existed (Phyn, Flo by Moen StreamLabs, LeakDefense, insurance products, etc.), there was a massive bottleneck in the capability and pace of installation, uniform monitoring and follow-on service. They are building the solution to the problem they lived at Flo, with deep expertise in both the technology and service required to deliver their value proposition.
Differentiated Business Model in a Fragmented, Low NPS Market
That unique insight and positioning is allowing the team to build a company that is clearly distinct from the classical plumbing business model. In providing both the technology and the service, they become the primary point of contact. They are the first port of call for the data from the installed IoT, positioning them as the plumbing partner for the home - allowing Beagle to build value with individual customers over time. Beagle Services is also quickly becoming the obvious partner of choice for plumbers across the US who want to find a home for their business as they approach retirement with no succession plan in place, and LOVE the idea of predictable, simple installations vs relying on 3am callouts for their revenue. Large incumbent firms will find it difficult if not impossible to respond to Beagle’s positioning, given the predicates of their business models. But Beagle has to move fast (more below).
Data and Service Dynamics with Scale
Beagle Service’s native tech stack directly supports the security value proposition with high switching costs given they are the first port of call for the data coming off the unit already installed. With more and more data from a critical mass of users, the team is rapidly improving their failure prediction, dispatch capabilities, and understanding of their replacement cadence, further reducing the potential for leaks. There is the clear potential for a full-service model as they scale.
Rocketship Growth
The Beagle team has already rapidly scaled their coverage across the US map - they’re now licensed in 20 states, and profitable in California, Texas, and Florida. Their negative customer acquisition cost (insurers give them the leads, and in certain cases the IoT units too) allows them to solve the scaling challenge of access to talent through best-in-class compensation and benefits, making them an obvious choice for existing and new plumbing talent. They are already thinking through recurring revenue opportunities, including monthly monitoring contracts, offering proactive services, product warranties, and are a licensed insurance brokerage so are able to participate actively in insurance cost savings secured on behalf of clients who have a “water secure” home. Within an eye to move into adjacencies including HVAC and power there is a lot of ground for them to cover. Just imagine if they learn how to install heat pumps.
With Singh Capital as their lead investor - they have deep expertise in home inspection and physical services - Beagle Services is in a prime position to rapidly build a very sticky position up a giant market. Their impact on water security and energy efficiency is huge, given that they are creating the channel for installation of next-gen consumer and commercial water tech. They can be the engine to finally realize the promise of the impact of IoT in water. It’s deeply exciting. Paul, Glenn, and the entire team at Beagle Services, thanks for letting us be a part of it, and welcome to the Burnt Island.
