Modsy is back. A little over a year after abruptly shuttering its e-design services, the San Francisco–based startup announced today that it had been acquired by homebuilding giant Lennar. As part of the agreement, Modsy founder and CEO Shanna Tellerman will become Lennar’s chief product officer. The terms of the deal were not disclosed.

“Lennar is the right fit for our team and technology—it shares our spirit of innovation and I’m excited to expand the capabilities of our platform to better meet the needs of homebuyers,” wrote Tellerman in a release accompanying the news. “Our focus since our founding has been on using technology to help consumers see the world around them in new ways to help make decisions. Lennar is allowing us to do that at an even greater scale.”

While the acquisition breathes new life into the startup, this is not a do-over. Under its new ownership, Modsy will not offer design services to consumers. Instead, the company’s visualization engine will be used to give dynamic virtual tours of Lennar’s model homes to potential buyers. There may be other uses for Modsy’s technology in the works, as well: The release alluded to “new tools for purchasing, supply chain and plan libraries.”

This isn’t the first time Modsy and Lennar have worked together. The two companies originally partnered in 2021 to launch virtual tours and offer design services for Lennar customers. At the time, the idea of virtually staging model homes felt like a reaction to specifics of the Covid era: a surge in demand for real estate coupled with restrictions on travel and fear of in-person gatherings. However, virtual staging of model homes makes economic sense, pandemic or no.

“We have somewhere between 2,500 and 3,000 model homes sitting static across the country—more than the number of Targets and Best Buys combined,” Eric Feder, president of LenX, Lennar’s innovation lab, told Business of Home at the time. “That’s not the best use of our capital. If we can eliminate them and make the customer’s buying journey more fluid and more digital … in a perfect world, we’d go 100 percent digital.” As part of that 2021 partnership, Lennar took an investment stake in Modsy, though its share of equity was not disclosed.

Today’s news comes at a transitional time in the world of e-design. While plenty of new players have entered the field in recent years, they tend to bifurcate in one of two directions: Leaning on a direct video consultation with a designer (The Expert, Intro, Pancake), or relying on AI to power the experience (Interior AI, RoomGPT, HomeDesignsAI). The “classic” model of e-design still exists, but even its largest player, Havenly, has mostly been making moves in other directions—including the launch of in-person services and the acquisition of Interior Define.

All of that would suggest that the original version of e-design has lost a lot of steam, at least in the eyes of investors. But Lennar’s purchase proves that the underlying technology—Modsy’s tech was generally considered the industry’s best—still has potential and real value.

Homepage image: A Modsy room rendering | Courtesy of Modsy