CHARLOTTE – Fast growth is coming, says the CEO of Charlotte startup RentReady.
Earlier this week, startup Rent Ready announced it had closed a $10 million Series A investment that’s being led by Grotech Ventures, positioning the company to scale geographically beyond Charlotte, Raleigh, and Atlanta.
The company, launched in 2016 by Will Brugh, Ryan McMillan, and Jonathan Kite, is a business-to-business services platform used in the multifamily apartment industry. The company’s proprietary platform connects property managers and their teams to vetted, professional service providers, and automatically files work orders and schedules appointments with the ultimate goals of reducing friction, increasing the speed and quality of an apartment’s turnover, and optimizing a manager’s time where it is best spent, said Kite in an interview.
“All of us want to build a super strong, national company,” said Kite, who serves as the company’s CEO, in an interview with WRAL TechWire. “We’re going to look to double our market reach this year.”
Charlotte startup Rent Ready raises $10M, adds Grotech VC Don Rainey to board
According to Kite, the company has already developed a shortlist of about a dozen additional metros where they may elect to operate. “But for us, when we think about being a national platform, what we realize is that regardless of the size of the local market or the size of the community in the multifamily property, every community in every market, everywhere, is facing this problem.”
The investor’s view
Think of it this way, said Don Rainey, general partner of Grotech Ventures, who according to the terms of the deal will join the startup’s Board of Directors, in an interview.
“If you’re an apartment manager or property manager, you’re going to have tenants vacate from apartments, which happens on average for about 50 percent of units every year,” said Rainey. “That property manager has a goal when that vacancy occurs, and that goal is turning over that apartment, doing those basic make-ready services, within three or four days with between three and five different service provider vendors.”
That’s a lot of time a property manager spends on managing space, rather than managing community, said Kite, estimating that the average property manager in a multifamily apartment community spends between four and eight hours each week just coordinating services in vacant apartments, instead of engaging current residents.
“That’s a lot of friction,” Rainey noted. “Are the vendors reliable? Will the services occur in the correct sequence? Will all the services be completed on time?”
A screen shot of the Rent Ready portal.
That’s where Rent Ready’s technology—which it provides to property managers and to vendors for free—creates value for each party involved, said Kite. Managers automate and streamline turnover services. Vendors receive steady, reliable work, and therefore, steady, reliable income, so companies—and particularly small businesses or sole proprietors—can hire additional staff and grow their own companies. Owners reduce vacancy periods and ensure there are no lost leases due to available spaces not being move-in ready.
The company does take a portion of all services paid to vendors, said Rainey, noting that the trade-off for these firms is more, and more reliable and regular workloads, at slightly less revenue generated. The company pays a flat fee for each service—not an hourly rate—so vendors who become familiar with a property may increase efficiency over time, through repetition and structured processes coordinated on the platform, said Rainey.
“We view our technology in three facets,” said Kite. “Core to our business in the back-end platform that we’ve built, which is very specific, entirely geared for business-to-business.”
That portion of the platform is all about logistics, said Kite, tracking and reporting on everything from the order to the dispatch, and it can perform and streamline scheduling across tens of thousands of services, said Kite. “For example, the platform will facilitate the delivery and application of 15,000 paints in one year, and 15,000 cleans in one year, and is highly sequenced, to deliver the make-ready easy process core to delivering value,” he said. “And that’s great, but our customers actually never see that.”
The second facet is the company’s soon-to-be-launched front-end customer portal that can be accessed from a workstation or from a mobile application. A manager or a maintenance technician on-site—who today is more likely to use a whiteboard and handwritten notes rather than a computer, said Kite—will now gain access to a customizable digital turnboard they’ll use to manage the turn in all facets.
“They don’t have to call anyone, they don’t have to confirm anything, the application will just schedule it on their behalf,” said Kite. “That turnboard is automatically updating in real-time, automatically connecting to the network of service providers, keeping track of the progress, ultimately letting the client know when the unit is rent ready.”
The dollar spend on turn services in multifamily property management is worth more than $10 billion, said Kite.
“For us, in terms of timing, why we’re doing this, is that we’ve worked super hard over the last several years refining the business model but more importantly, refining the technology,” said Kite. “We’re really confident in our business model, and in our technology.”
It took two years to get to executing the Series A round, said Kite, as he and his co-founders were in regular conversation with venture capital firms across the Southeast, including Grotech.
“Don Rainey and Grotech were perfectly suited to help us reach the next stage and to scale,” said Kite. “We felt like they were a perfect partner, and we were very selective in finding a partner to help us execute our growth strategy.”
“As for the scalability of the company, that’s part of the magic of this Series A,” said Rainey. “The company operates in three markets—they could probably operate in 150.” The highest purpose of technology, according to Rainey, “is to take the friction out of people’s lives, and I look for investments where that is a central component—in investment after investment, that’s true.”
Grotech is also an investor in Charlotte-based startups Passport and Payzer.
