The two engineers had first met at MIT poker night and built an AI system to handle missed calls—originally, 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.

“When a restaurant misses a phone call, that’s a $30, $40 order,” said Chen. “When a home service business misses a phone call, that could be a $30,000, $40,000 HVAC install they’re missing. So, instantly, we thought: ‘wait, this is a completely different order of magnitude.’”

Chen and Shrivastava already were in town, and spent an afternoon with Rescue Air: “We realized in those few hours that if we could solve this problem well for Rescue Air, it could be massive,” Chen added. 

For three months in 2023, Chen and Shrivastava built a product especially for Rescue Air—who 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—HVAC, plumbing, roofing, and electrical businesses—isn’t 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.

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.)

“This is definitely an industry that’s been overlooked by Silicon Valley,” said Leigh Marie Braswell, Kleiner Perkins partner. “I think people don’t 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.”

The HVAC industry alone in 2025 was worth about $50 billion, with some estimates stretching to $75 billion by 2032. 

“This is a huge growth moment in the home services economy,” said Shrivastava. “All these stories are coming out now that basically say, ‘with all that’s happening in AI, the next million-dollar-job is the job of plumber, the job of the technician…What Avoca has realized is these people are the main characters. No AI wave’s replacing the job of a technician at least [in] the next five years.”

There’s no shortage of startups attracting funding in the AI call center space, to be sure. And it’s a wild market where long-term winners are hard to pick. Avoca—named for a body of water in Ireland where two rivers merge to one—has something of a first-mover advantage in its space. Does Braswell, an early Scale AI employee with a reputation for backing technical winners, believe a “first-mover advantage” matters?

“I like the phrase ‘head start’ better,” said Braswell. “It’s more intellectually honest.”

There are frameworks for the market Avoca’s chasing (consider ServiceTitan, venture-backed and one of last year’s limited number of notable IPOs). But, generally, this is a startup focused on one of those great, ubiquitous but invisible spaces—I don’t think about my sink or AC when it’s working, but when it’s not? It’s just about all that matters at that moment.

“We consider ourselves to be building for the physical economy, and often they’re the people who get left behind,” said Chen. “Everyone’s trying to build for the Fortune 500, but there’s this giant, trillion-dollar economy no one is touching.”

See you tomorrow,

Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com

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VENTURE CAPITAL

- ComfyUI, 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.

- PxX Partners, 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.

- TriFetch, 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.

PRIVATE EQUITY

- American Industrial Partners agreed to acquire the Warehouse and Workflow Solutions business of Honeywell, a Charlotte, N.C.-based developer of systems and technology for the aerospace and infrastructure industries. Financial terms were not disclosed. 

IPOs

- Avalyn Pharma, a Boston-based developer of therapies for respiratory diseases, plans to raise up to $212.4 million in an offering of 11.8 million shares priced between $16 and $18 on the Nasdaq. F-Prime Capital Partners, Eventide Fund, Norwest Venture Partners, Novo Holdings, Perceptive, SR One Capital, Vida Ventures, and Wellington Biomedical Fund back the company.