Bulgarian AI Startup Lace Raises $19M After Achieving 1,000% Growth in Home Services Market

Bulgarian AI Startup Revolutionizes $650B Home Services Industry With Record-Breaking Growth

SOFIA, Bulgaria — In a nondescript office in Sofia's emerging tech district, a team of former Meta engineers has quietly built what may become the definitive AI solution for an unlikely industry: home services. Lace AI, a revenue intelligence platform focused on helping plumbers, HVAC technicians and roofers book more jobs, has secured $19 million in seed funding after achieving a staggering 1,000% annual recurring revenue growth in 2024.

The investment round, led by Bek Ventures with participation from LAUNCHub Ventures and Horizon VC, also attracted notable individual investors including Snowflake co-founder Marcin Zukowski, Vivino founder Heini Zachariassen, and Payhawk co-founder Hristo Borisov.

"This level of growth is exceptional for any vertical, but particularly in home services, which has historically been resistant to digital transformation," noted a senior fintech analyst at a major European investment bank. "The fact that Lace has found product-market fit so quickly suggests they've identified a significant pain point."

The Untapped Goldmine of Service Calls

The home services industry—valued at $650 billion and encompassing everything from emergency plumbing repairs to complete home renovations—has a surprising secret: despite massive digital marketing investments, approximately 80% of revenue still comes through phone calls.

This creates a blind spot for business owners. While they can meticulously track online ad performance down to the cost per click, they have virtually no insight into what happens once the phone rings.

"Most businesses in this sector leak between 15% and 40% of potential revenue through mishandled calls," explained Boris Valkov, Lace AI's co-founder and former Facebook AI leader who contributed to the development of PyTorch. "We built Lace as the AI-native revenue intelligence platform purpose-built for the $650 billion home services industry—a sector long overdue for transformation."

Lace's platform records and analyzes every inbound call using advanced AI, automatically classifying outcomes, identifying missed sales opportunities, and providing targeted coaching to staff. The result: clients report booking rates as high as 98% and net sales increases up to 35%—without additional marketing spend or headcount.

From Small Shops to Industry Giants

In just over two years since its 2022 founding, Lace AI has attracted more than 100 businesses to its platform, ranging from $5 million local operations to $2 billion industry leaders. Clients include A1 Garage Door Service, Sage Home, Eco Plumbers, Matrix, and Lee's Air.

A case study provided by the company highlights PipeDreams, a client with 25 customer service representatives handling 18,000 calls monthly. After implementing Lace AI for just one month, the company saw a 23% increase in qualified booking rate and reduced quality assurance costs by 5.5 times.

Walking through Lace AI's offices, the contradiction between its modest surroundings and outsized impact becomes apparent. While the technology is revolutionary, the business problem it solves is remarkably straightforward.

"Home service businesses spend thousands on marketing to make phones ring, but then lose significant revenue because calls aren't handled efficiently," said a home services industry consultant who advises several Lace AI customers. "Before Lace, owners would randomly sample a few calls per agent per month—maybe 1% of total call volume—and make coaching decisions based on that limited data. Lace analyzes 100% of calls, catching every missed opportunity."

Technical Edge Rooted in Elite AI Talent

Lace AI's rapid ascent isn't accidental. The company's technical foundation was built by Valkov, who previously worked on large-scale machine learning systems at Facebook AI. This experience informed Lace's approach to analyzing conversational data at scale.

The platform operates on a B2B SaaS model, charging businesses a monthly fee per agent or customer support representative. This structure aligns with the industry's staffing models and creates predictable scaling economics for both Lace and its customers.

With the new funding, Lace plans to triple its workforce from the current 20 employees and expand its R&D initiatives through its Sofia-based research center, which has become one of the largest AI hubs in the region.

"What's remarkable is how they've democratized access to elite AI capabilities for businesses that would never consider themselves tech-forward," remarked a venture capital researcher familiar with European AI investments. "They've managed to package highly sophisticated technology in a way that delivers instant value to non-technical customers."

Challenging Established Players in a Unique Way

While giants like Gong, Dialpad, Five9, and Clari dominate the broader call analytics and sales intelligence markets, none have focused specifically on the unique needs of home service businesses.

This niche specialization gives Lace AI an edge, but also presents challenges as the company scales. The company must navigate integration with legacy systems common in the industry, address data privacy concerns particularly under GDPR, and maintain product quality during rapid expansion.

"The home services market is massive but fragmented, with most businesses running on outdated technology stacks," observed a technology analyst who covers AI implementation in traditional industries. "Lace's ability to plug into these environments without disrupting operations has been key to their adoption."

The Roadmap for Expansion

Looking ahead, Lace AI is developing real-time coaching capabilities that will provide guidance to agents during calls, deeper conversion insights, and broader integrations with CRM and contact center tools.

These features address evolving client needs and could further strengthen Lace AI's position in the market. However, the company also faces the challenge of educating traditionally non-technical businesses about the value of AI—a significant hurdle in sectors accustomed to manual processes.

"There's a natural skepticism in trades-based businesses about technology investments," said an industry educator who trains home service businesses on operational efficiency. "What's working for Lace is that they can show concrete results—not just vanity metrics but actual revenue increases—within weeks of implementation."

Market Timing and Strategic Implications

For investors and industry stakeholders, Lace AI represents a convergence of several trends: the digitization of traditional industries, the practical application of advanced AI to solve business problems, and the growing emphasis on revenue optimization in uncertain economic conditions.

"We're seeing a shift in how AI is deployed across sectors," explained a market strategist at a global investment firm. "The first wave was about consumer applications and general enterprise tools. The next wave is about deep vertical solutions that solve specific industry problems."

The timing appears fortuitous. The global home improvement services market is projected to grow from $362.06 billion in 2024 to $479.05 billion by 2029, representing a 5.8% compound annual growth rate. Several factors drive this expansion: increasing urbanization creating demand for space-efficient renovations, growing interest in energy efficiency and sustainability, and the integration of smart home technologies requiring specialized installation and maintenance.

Lessons for Other Vertical SaaS Plays

Lace AI's trajectory offers instructive lessons for other startups targeting specific industry verticals. Their approach demonstrates the value of deep domain expertise combined with cutting-edge technology, packaged in a way that addresses concrete business problems.

"What stands out about Lace is how they've aligned their technology with the actual workflow and business metrics of their customers," noted a software industry analyst who studies vertical SaaS companies. "They're not just deploying AI for its own sake—they're solving a revenue problem that business owners immediately understand."

The company's growth also highlights the opportunity in industries that have historically been underserved by technology providers. While software has eaten much of the world, significant sectors of the economy still operate with minimal digital transformation.

The Challenge of Sustained Execution

Despite impressive early traction, Lace AI faces significant challenges. The planned tripling of headcount risks diluting the company's culture and operational efficiency. Integration with legacy systems remains complex, and data privacy concerns require ongoing attention, especially as the company handles sensitive customer call data.

Market education also presents a hurdle. Convincing traditionally non-technical businesses to adopt AI requires significant training and trust-building, potentially slowing growth as the company moves beyond early adopters.

"The seeds for success are clearly there," commented a growth-stage investor who specializes in B2B software. "The question is whether they can maintain their focus and quality during rapid expansion. Many startups stumble precisely when they have the wind at their backs."

For now, Lace AI seems well-positioned to capitalize on its early momentum. With strong investor backing, proven customer results, and a clear roadmap for product development, the company represents a compelling case study in bringing advanced AI to traditionally low-tech industries.

As Boris Valkov puts it: "What sets us apart is our relentless pace of innovation and our ability to execute fast. That's how we've been able to drive 1000% growth in a single year—and we're just getting started."