From food delivery to housing: Former Favor founders raise millions for Sunroom Rentals

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 round of funding led by Gigafund.

Ben Doherty and Zachary Maurais, former founders of the delivery app Favor, launched Sunroom in May 2018 with the mission of “boosting the profitability” of mid-size property managers and apartment owners by giving them a way to outsource their leasing operations.

The pair sold Favor to Texas grocer H-E-B in 2018 and soon after shifted their focus on building out Sunroom. The Austin-based company has developed an app that it says gives renters a way to tour, apply for and lease a unit “entirely online.” COVID-19 has led to more renters wanting virtual ways to explore and secure rental units. Mobile-first, Maurais noted, is particularly appealing to millennials and Gen Zers.

“Personally, we love to create products that fulfill consumer’s most basic needs,” said Maurais, the company’s president. “With food under our belt, we decided to focus on housing.”

While one might wonder what the parallels between food delivery and housing might be beyond fulfilling consumers’ needs, CEO Doherty said the rental market in 2021 looks a lot like the food delivery market in 2013.

“In 2013, Grubhub had successfully put many restaurant menus online, but most of the transactions and delivery process was still offline,” he told TechCrunch. “We’re in a similar position with the rental market, as the majority of rental listings are online, but touring, applying or leasing units is still done offline.”

Since its launch, Sunroom Rentals has signed more than 2,000 leases and had over 100,000 renters sign up for its services in fast-growing Austin, where it focused its initial efforts.

“According to the U.S. Census, that represents roughly 10% of renters in the greater Austin metro,” Maurais said. “Instead of going shallow and wide nationally, we decided to go deep in markets, in an effort to gain network effects, which was a strategy that worked well for us at Favor.”

Sunroom Rentals claims that it’s leasing units five days faster than the market average. This benefits property managers, Doherty said, because they can grow quicker “while improving leasing performance.”

Looking ahead, the company will use the funding to expand across Texas, including in 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 with the goal of more than doubling its headcount this year. It’s in particular looking to hire across its engineering, product and sales departments.

As mentioned above, Gigafund led the Series A financing, which included participation from NextGen Venture Partners, Calpoly Ventures and a slew of angel investors, including Gokul Rajaram (Google & Square) and Homeward’s Tim Heyl, among others. Existing backers include Founders Fund Seed, Draper Associates, Boost VC and Capital Factory (among many others). The round marked Sunroom’s first “priced” round, meaning the first time it’s given up stock.

Jonathan Basset, managing partner at NextGen Venture Partners, believes Sunroom was essentially in the right place at the right time and “on trend with touchless leasing even before COVID hit.”

“I watched them build a profitable consumer marketplace in a competitive market with Favor and was impressed with them as operators,” he said. “These businesses have a surprising amount of similarities and I’m confident they can rise to the challenge.

Last week, TechCrunch reported on the raise of another startup operating in this increasingly crowded space. Seattle-based Knock — a company that has developed tools to give property management companies a competitive edge — raised $ 20 million in a growth funding round led by Fifth Wall Ventures.

Knock’s goal is to provide CRM tools to modernize front office operations for these companies so they can do things like offer virtual tours and communicate with renters via text, email or social media from “a single conversation screen.” For renters, it offers an easier way to communicate and engage with landlords.

Maurais said the two differ in that Knock is a CRM built for leasing agents with a SAAS model where as Sunroom is a marketplace, where renters match, tour and apply with partnered properties.

“Sunroom also provides a suite of leasing & analytics software to its partners and generates both transactional and subscription revenues,” he added.

Startups – TechCrunch

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One-click housing startup Atmos raises another $4M from Khosla, real estate strategics and TikTok star Josh Richards

Atmos wants to make designing a house as simple as a single click. Well, that vision is now getting a double click from VCs.

The company, which we profiled back in July, announced today that it raised another $ 4 million, this time from Evan Moore at Khosla Ventures, real estate strategic investors like David Gerster at JLL Spark and Lennar board member Scott Stowell, as well as individuals like Adam Nash of Dropbox and TikTok star Josh Richards, who I guess has turned that whole concept of hype houses into a real estate investment thesis. Or something.

That’s on top of the company’s earlier $ 2 million seed round, bringing the total funds raised to $ 6 million if this desk calculator is functioning.

Atmos has made even more progress since they graduated from YC earlier this year. According to CEO Nick Donahue, users have started designing the “first dozen homes” on the platform, and the first home designed through Atmos has now broken ground on construction.

The company has also done an acqui-hire to expand its team, and it is growing its technology to allow users to more easily visualize their housing designs within the context of specific property lots.

If you’re curious about the company’s founding story and more of what they are doing, definitely read more from our story just a few weeks ago.

Startups – TechCrunch

This Danish startup believes co-living can help fight housing and climate crisis, intolerance & loneliness; raises €6M

The COVID-19 pandemic crisis has impacted many industries including aviation, hospitality and much more. Despite the hardship, a Danish proptech startup LifeX, which already operates in six European cities secured fresh funding to expand its presence. This makes its co-living model successful during extremely tough times.

Secures €6M funding

LifeX has secured €6M funding from a Copenhagen-based startup studio, Founders alongside Berlin-based VC fund, Cherry Ventures. Previously, LifeX announced a seed funding round of €7.5M from the same investors along with participation from a few others. With the current funding round, LifeX has now received nearly €15M funding on the whole and is gearing up to raise a Series A round in the near future.

LifeX: A sneak peak!

The fresh investment used to strengthen the presence of LifeX in both the existing and new markets, fuel product development, and accelerate its vision to make anyone feel at home across the world.

Founded in 2017 by Sune Theodorsen and Ritu Jain, LifeX claims to help young professionals overcome the many challenges of finding housing and growing a social network. The company offers a family-style approach to co-living, featuring shared living spaces filled with designer furniture. It also removes common points of conflict such as chores, house maintenance and bills.

LifeX also claims to help young professionals grow their social networks through community fostering initiatives such as events, networking opportunities and more with its embedded members from over 50 different countries.

According to the company, the monthly rent depends on the city, the apartment and the room size. Deposits vary from city-to-city in the range of €1 – €1.5k. The startup asks its customers to prepay the last month’s rent when they join LifeX. This means that as soon as they give their one-month move out notice, LifeX knows what your last month will be and this month will already be paid for.

According to the company, its prices are all-inclusive and includes, rent, utilities, Wi-Fi and Netflix membership, cleaning service (twice a week) for both the shared space and private room, shared supplies (household items that are generally shared among housemates like toilet paper, laundry detergent, salt, pepper, cooking oil etc.)

Success amidst COVID-19 crisis

While the hospitality industry is extremely hit by the COVID-19 crisis, LifeX claims to have continued to find success and has earned the attention of investors. “We have been focusing on our community of members, which is the essence of LifeX. It was really important for us to remain approachable and reactive during these unprecedented times. We were due to release a new feature in our LifeX app, which aimed to enhance communication with our members. We identified the need to accelerate development of this feature and released it during the lockdown period, allowing us to maintain a closer line of communication with our members,” says Theodorsen, who is the CEO of LifeX.

According to the company, it has also been focusing on fighting loneliness brought about by the pandemic-driven lockdown and isolation. “What we noticed during the crisis was that our members were very appreciative of not having to face this alone. They enjoyed spending time together, bonding and having their housemates as a support system to rely on,” says Theodorsen.

Currently, LifeX operates co-living homes in Copenhagen, Berlin, London, Paris, Munich and Vienna. There are 30 employees with offices in these cities mentioned here.

Main image picture credits: LifeX

Startups – Silicon Canals

There’s a housing crisis, and Abodu wants to solve it fast with quality backyard homes

Housing prices have soared in many markets across the United States over the past decades as populations have grown, square footage has increased, and new unit construction has languished. Houses that were once tens of thousands of dollars have transformed due to zoning restrictions into million-dollar manses, leaving millions without affordable housing.

Few regions have been as hard hit by housing prices as the Bay Area, where the median price for an existing home last year averaged just shy of $ 1 million. For John Geary, who grew up in Cupertino and whose father is a single-family home real estate developer, “I’ve seen the just under-building of housing occur my entire life here.”

He eventually linked up with Eric McInerney when the two worked at Bain, and the two quickly became friends, living together in Chicago. Both were housing nerds and talked about the housing crisis regularly, and eventually, they started looking at a way to solve the affordability problem.

While California has handled the crisis with the glacial fervor you would expect of the republic, one major change on housing has been new state laws that have made it easier to build an ADU (accessory dwelling unit), which are smaller home units tucked into existing properties (for example, a one-bedroom detached home in the backyard of an existing four-bedroom house).

The changes around these housing units became more visceral for Geary when his father, who was developing a subdivision in San Juan Bautista south of San Jose, was mandated to include 15 ADUs in a neighborhood plan for 45 lots. There weren’t great options for including the housing units at any reasonable price, and other homeowners who had attempted to construct ADUs came to a similar conclusion — indicating a gap in the market that could potentially be filled.

Geary and McInerney saw an opportunity to capitalize on the sudden openness for ADUs in California, and launched Abodu. The startup, which is based in Redwood City in the Bay Area, offers three customizable housing models that it then manufacturers to order and can deliver to homeowners in as little as about 12 weeks.

The startup raised $ 3.5 million for a seed round led by former TechCrunch writer Kim-Mai Cutler, who is now a partner at Initialized Capital. Her famous “vomiting anarchists” essay helped to propel housing issues to public consciousness in the Bay Area and throughout the tech industry.

A finished and installed Abodu home. Photo via Abodu.

Abodu offers three housing models today: a studio, a one-bedroom, and a two-bedroom, with prices starting at $ 189,000, $ 199,000 and $ 259,000 respectively. Those prices include standard installation, foundations, and utilities, but exclude city permit fees, which Geary says can range from $ 1,500 to $ 7,000. Additional, more premium options and finishes are available as well. Homeowners can buy the units online or visit the units in-person at the company’s showroom in Redwood City.

“They’re built entirely offsite to local building codes. So the same construction process, same materials, same requirements that you face building something in your backyard from the ground up. We meet all those, we just build them in a factory instead of someone’s backyard,” Geary explained.

From there, the house is put on a truck, driven to the destination, and a crane lifts the unit over the existing house on the property and places it into the intended location.

The interior of an Abodu home. Photo via Abodu.

Currently, it takes about 10 weeks to construct the unit in the factory, and 10 days to setup a backyard to host the unit. So as the unit starts to reach the finishing steps at the factory, construction crews begin to prep the property for installation. “From a homeowner’s perspective, the disruption that occurs in their life is really centered in that back quadrant of the project. So instead of months and months and months [with traditional construction], it’s only two weeks,” Geary explained.

Customers can work with Abodu to acquire standard home equity lines of credit (HELOCs) or cash-out mortgage refinancing to pay for their unit.

The company currently has 10 employees and shares its office in the same facility as its showroom in Redwood City.

Geary says that when the company first started, the focus was on homeowner-investors looking to extract rents from their backyards. But with the pandemic, there is now a greater need for families to have more flexible housing options, with kids returning home and older family members looking to separate from others to prevent infection.

Startups – TechCrunch