As housing boomed, 2021’s proptech darlings were resi solutions

Many startups behind the year’s largest funding rounds were repeat raisers

National /
Dec.December 23, 2021 08:45 AM

From left: Philippe Laffont, founder, Coatue Management; and Chase Coleman, founder and partner, Tiger Global Management (Insight Global, Getty Images, Tiger Global Management, iStock)

Just as the pandemic hastened proptech’s growth, it also determined which of its many branches flourished.

As the homeownership rate soared to highs not seen since before the recession, many of the year’s largest and most active fundraisers were unsurprisingly focused on the residential market. Several were repeat raisers, returning to the venture coffers twice in quick succession.

More and more real estate owners came to see technology as an effective tool to address new and existing pain points, Zak Schwarzman, general partner at the proptech-focused VC firm MetaProp, told The Real Deal. Venture firms, for their part, have been flush with cash and eager to reinvest, he said.

“The amount of capital that’s been returned to LPs in the venture ecosystem over the last two years is extraordinary,” Schwarzman said. “So everyone’s looking to reinvest and everyone’s feeling good. That leads to bigger rounds, and it’s more competitive than it’s ever been.”

The hedge fund Tiger Global, the global private equity and venture capital firm Insight Global, and the tech-focused investment manager Coatue were recurring investors in the years’ largest funding rounds.

Below are details on the five largest proptech fundraises of 2021:

1. Entrata — $507 million

The year’s largest single fundraise was also the largest private investment round in the state of Utah’s history.

It was also the first time the multifamily property management platform Entrata had ever accepted outside institutional funding in its 18-year history. The private equity firm Silver Lake, along with Qualtrics founder Ryan Smith and Vivint Smart Home founder Todd Pedersen, led the financing round over the summer. No valuation was offered with the raise.

Property management software has been fertile ground for investment and product development in recent quarters, as property owners sought greater transparency and control of day-to-day operations to cut costs, streamline payment and maintenance and improve the “tenant experience.”

Founded in 2003, Entrata claims to be the only comprehensive multifamily property management software with a single-login, open-access platform. It serves more than 20,000 apartment complexes in the U.S. and processes more than $20 billion in rent payments annually.

2. ServiceTitan — $500 million / $200 million

ServiceTitan, a software platform for the home service trades, undertook two large funding rounds in 2021, and by the fall it was making plans to go public.

The company, which connects property owners to plumbers, air conditioning technicians and other service providers, raised $500 million in March at an $8.3 billion valuation — at the time the highest valuation and largest-ever investment for a private vertical software company.

A few months later, the company stepped into the landscaping tech sphere by acquiring Aspire Software, and raised a further $200 million in a Series G round that increased its valuation to $9.5 billion.

As of September, ServiceTitan was planning an IPO for early 2022, Reuters reported.

Tiger Global led the $500 million round alongside Sequoia Capital Global Equities, while the private equity firm Thoma Bravo, a new investor in the firm, led the $200 million round.

3. Plume — $270 million / $300 million

Homes have not only become more expensive in the U.S., they’ve become vastly smarter.

Within the “smart home” proptech niche — startups that make houses self-regulating and more responsive to owners’ needs — Plume, a software-as-a-service platform for communications service providers, aims to make the home more connected with features like adaptive Wi-Fi, motion sensing and parental controls.

Plume raised $270 million in Series E funding from Insight Partners at a $1.35 billion valuation in February. Then, in October, it raised another $300 million from Softbank’s Vision Fund 2 at a $2.6 billion valuation.

4. Divvy, $110 million / $200 million
With demand for homes outpacing supply and prices skyrocketing, average buyers have been losing out on deals. Divvy Homes, another of the year’s top fundraisers, aims to help cash-strapped renters become owners by purchasing homes on their behalf, then entering a kind of rent-to-own arrangement.

Divvy raised $110 million in February in a Series C round led by Tiger Global. A few months later, it hauled in another $200 million from Tiger Global and Caffeinated Capital, quadrupling its valuation to $2 billion.

As of this summer, Divvy had more than 750,000 customers in 16 major markets, including Atlanta, Houston and Cleveland.

5. Blend — $300 million

As the U.S. housing market took off, fueled by cheap debt and a migration away from traditional job centers, a number of startups were there to grease the wheels — many focused on helping average buyers compete with heavyweight institutions.

Blend, another of the year’s biggest proptech fundraisers, focuses on the lenders. A unicorn digital lending platform for mortgages and consumer banking, Blend in January raised $300 million in Series G funding at a $3.3 billion valuation, nearly doubling its valuation from a few months before. Tiger Global and Coatue led the round.

“We want to build the banking software infrastructure for the future, with an end-to-end digital experience for any consumer banking product and a complete homebuying and financing journey from start to close,” Blend founder Nima Ghamsari said.

In July, Blend went public, raising $360 million in an IPO that priced at the top of its expected range. The company is not yet profitable, however, and its stock has lost more than 60 percent of its value since its debut.

Honorable mention: Pacaso — $75 million / $125 million

Homebuyers’ shopping spree extended to vacation markets, as workers, freed from their desks by remote-work policies and the miracle of Zoom, sought to escape from the confines of home sweet home.

Only a few months after its launch, the startup Pacaso, which sells shares of luxury second homes to aspiring owners, raised $75 million in a Series B round in March, valuing the company at $1 billion — reportedly the fastest path a U.S. company has ever taken to unicorn status. After a few more months, it raised another $125 million in Series C funding. It also scored $1 billion in debt financing along the way. Greycroft and Global Founders Capital led the Series B, and SoftBank’s Vision Fund 2 led the Series C.

Pacaso’s rise made it one of the most compelling growth stories of 2021, but the startup has made plenty of enemies along the way. The company is currently embroiled in a lawsuit with a Sonoma Valley city, and locals in several of the markets into which it’s expanded want it gone.





    Related Articles

    arrow_forward_ios
    Zillow economist Nicole Bichaud (Zillow, iStock)
    Where have home values grown more, suburbs or cities? The answer may surprise you
    Where have home values grown more, suburbs or cities? The answer may surprise you
    ABS Partners Real Estate founder Earle Altman and 270 Madison Avenue (ABS Partners, LoopNet, iStock)
    NY Public Library leases 41k sf for Midtown offices
    NY Public Library leases 41k sf for Midtown offices
    Legion Investment Group's Victor Sigoura and 26 East 84th Street (Getty Images, Google Maps, iStock)
    Old-guard landlords cash out in Manhattan, Bronx multifamily deals
    Old-guard landlords cash out in Manhattan, Bronx multifamily deals
    Clockwise from top left: Eric and Bridget Elkin, Diane Mollica, Liz and Lisa Gillooly and Sarah Frigo (Compass)
    Compass aims to grow its North Fork agent count fivefold
    Compass aims to grow its North Fork agent count fivefold
    Ben Shaoul and 1457 North Main Street (Getty, LoopNet)
    Ben Shaoul plans 376-unit complex near L.A.’s Chinatown
    Ben Shaoul plans 376-unit complex near L.A.’s Chinatown
    CHIP executive director Jay Martin (LinkedIn, iStock / Photo illustration by Priyanka Modi)
    Landlords called it: Vacancy rate jumps, rent-stabilization stays
    Landlords called it: Vacancy rate jumps, rent-stabilization stays
    331 Elmora Avenue and 103 Ryan Street (Kislak Realty)
    Tri-state deal roundup: Multifamily, industrial still hot
    Tri-state deal roundup: Multifamily, industrial still hot
    From left: Vice Media CEO Nancy Dubuc, Rudin’s CEO and co-chairman Bill Rudin, and Dock 72 (Getty Images, S9 Architecture, Rudin Management, iStock)
    Vice scraps move to Rudin’s Dock 72
    Vice scraps move to Rudin’s Dock 72
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...