Alfred, the rental management software startup also known as Hello Alfred, raised $125 million and acquired Charlotte-based property manager RKW Residential in a bid to scale its operations in the Southeast and beyond.
The startup used $50 million of the total equity and debt capital raised — the company would not provide details on the mix — to buy RKW and invest in the “growth of the combined platform,” said Marcela Sapone, Alfred’s co-founder and CEO.
The balance, Sapone said, will be used to buy additional “property managers and other tech companies,” allowing Alfred — which is now deployed in 145,000 single- and multifamily rental units across 44 cities in the U.S. and Canada — to quickly grow its footprint. RKW manages about 30,000 single- and multifamily rentals in the Southeast.
“It’s definitely about rapid expansion,” Sapone said. “It’s about getting to a scale where we’re one of the largest operators in the space.”
No layoffs were associated with the acquisition.
Rialto Capital led the funding round, with participation from NEA, 166 2nd Financial Services, Holland Management and others. Alfred previously raised $42 million from former WeWork CEO Adam Neumann’s family office, Greystar and others in an October 2020 Series C.
Alfred digitizes the “resident experience,” allowing prospective renters to tour a property, sign a lease, manage a move and sign up for insurance and utilities — “all from your phone,” Sapone said. Current renters can make payments, book amenities and services like cleaning and grocery delivery, communicate with managers and other tenants, and file maintenance requests.
The company says owners and operators benefit from faster lease-up, above-market rents and higher renewal rates.
“We’re bringing technology and a resident-first approach to the space, and we’re helping owners and operators make more money in the process,” Sapone said.
Roughly seven years after its 2015 launch, Alfred’s own profitability is unclear; the company declined to offer specifics on its financial performance. But Sapone said the business has benefited from the rise of remote work and the trend toward renting that has accompanied rising home prices in recent years.
Roughly 36 percent of U.S. households rent their homes — the highest rate since 1965, according to Pew Research.
RKW is Alfred’s fourth acquisition, but its first in property management. Last May, the company acquired HOM, a “wellness and events platform,” in an all-equity deal at an undisclosed price.