Real estate tech startup Sunroom Rentals, which leases units on behalf of property managers and apartment owners, has raised $ 11 million in a Series A funding round led by Gigafund.
Ben Doherty and Zachary Maurice, former founders of delivery app Favor, gave a way for mid-size property managers and apartment owners in May 2018 to outsource their leasing operations with the mission to “boost profitability”.
The pair sold Favors to Texas Grossery HEB in 2018 and soon shifted their focus to building the sunroom. The Austin-based company has developed an app that says it gives renters a way to tour, apply and lease a unit “completely online”. COVID-19 has led to more renters seeking virtual ways to locate and secure rental units. Mobile-first, Maurice said, is particularly appealing to millennials and General Jerseys.
“Personally, we like to create products that meet the most basic needs of the consumer,” said the company’s president, Maurice. “With food under our belt, we decided to focus on housing.”
While one might wonder whether the similarities between food delivery and housing may go beyond serving consumers’ needs, CEO Doherty said that the rental market in 2021 looks more like the food delivery market in 2013.
“In 2013, Grubh successfully put many restaurant menus online, but most transactions and delivery processes were still offline,” he told ClearTips. “We are in a similar position with the rental market, as the majority of rental listings are online, but touring, applying or leasing the units is still offline.”
Since its launch, Sunroom Rentals has signed over 2,000 leases and signed up more than 100,000 renters for its services in fast-growing Austin, where it has focused its initial efforts.
“According to the US Census, it represents about 10% of rentals in the greater Austin metro,” Maurice said. “Instead of going shallow and broadly nationally, we decided to delve deeper into markets, in an effort to achieve network impact, which was a strategy that worked favorably for us.”
Sunroom Rentals claims that it is leasing units five days faster than the market average. This benefits property managers, Doherty said, because they can “grow faster while improving leasing performance.”
Looking ahead, the company will use the funds to expand across Texas, including Houston, San Antonio and Dallas. It will also invest in its partner portal, which aims to give owners and property managers a way to view real-time data on leasing performance.
Sunroom Rentals currently has 18 employees who exceed the target of doubling their headcount this year. It specifically intends to hire its engineering, product and sales departments.
As noted above, GigaFund led series A financing, which was attended by NextGen Venture Partners, Calpoli Ventures and a group of angel investors, including Gokul Rajaram (Google and Square) and Tim Hayel of Homeward. Current backers include Founders Fund Seed, Draper Associates, Boost VC and Capital Factory (among many others). The round marked the first “price” round of the sunroom, meaning this is the first time this stock has been abandoned.
Jonathan Bassett, managing partner at NextGen Venture Partners, believes the sunroom was essentially in the right place at the right time and “was in trend with touchless leasing before COVID hit.”
“I saw them creating a profitable consumer market in a competitive market with competitors and was impressed with them as operators,” he said. “There is an amazing amount of commonality in these businesses and I believe they can rise to the challenge.
Last week, ClearTips reported another startup operating in this increasingly crowded place. Seattle-based Knock – a company that has developed tools to give asset management companies a competitive edge – raised $ 20 million in a development funding round led by Fifth Wall Ventures.
Knock’s goal is to provide CRM tools for these companies to modernize front office operations so that they can offer things like offering a virtual tour and communicating with renters via text, email or social media from “a single conversation screen” Can do. For renters, it provides an easy way to communicate and engage with landlords.
Mourais stated that there are two differences in NOK. There is a CRM built for leasing agents with a SAR model, where the sunroom is a marketplace where tenants match, tour and apply with partnered properties.
“Sunroom also offers its partners a suite of leasing and analytics software and generates both transaction and subscription revenue,” he said.