Hightower, a cloud-based leasing portfolio management company, raised $6.5 million in a Series A financing round. The cash influx comes just eight months after the Manhattan-based firm raised $2.1 million in seed money, and represents the latest in a wave of big-dollar funding for commercial real estate tech startups.
Joshua Kushner’s Thrive Capital and Bessemer Venture Partners, which also invested in the seed round, led the Series A funding, while others such as Red Swan Ventures and RRE Ventures also made repeat investments.
“The market opportunity is large and customers like our product,” Hightower co-founder Brandon Weber told The Real Deal. New York-based landlords including Two Trees Management, Jared Kushner’s Kushner Companies and East End Capital use the service, as do brokerages such as Cushman & Wakefield, JLL and CBRE. Hightower’s product measures leasing performance, keeps track of current and prospective tenants in portfolios and assists landlords in marketing available space. About 25 million square feet of New York office space is now managed through its platform.
While eight months is a short time between funding rounds, Weber, a former CBRE broker who also did stints at Zillow and Microsoft, said he’s already got plans for the capital. These include expanding the compay’s engineering and customer support teams and moving into new markets. “The pieces are in place so it’s now a matter of scaling those pieces,” he said, adding that the one-year-old firm projects revenues over the next 12 months to be in the low single millions.
Weber declined to disclose what stake he and his co-founders Niall Smart and Donald DeSantis gave up in exchange for the funds, but said that they remained majority owners of the company.
Hightower’s closest competitor in New York is View the Space, which has raised over $7 million to date and counts blue-chip real estate investment trusts such as SL Green Realty and Vornado Realty Trust among its clients. Although Weber said Hightower has placed more emphasis than View the Space on its mobile platform, both firms are clearly going head-to-head in a race to become the next leasing industry standard.
Technology investors are increasingly seeing commercial real estate as a huge opportunity, and are ramping up their bets on startups looking to disrupt the space. Since 2012, these fledgling businesses have raised over $700 million globally, as TRD reported.
“There’s a rising tide and it’s floating all boats,” Weber said.