A Chicago-based property management startup is turning to Lemonade, a Softbank-backed home insurance firm, to help fuel its national expansion push.
Fresh off a $2.5 million funding round this spring, Avail announced that it would fold Lemonade into its apartment leasing and management platform targeted at small landlords. Driving new tenants toward the New York-based insurance startup would help patch up a nagging oversight that can leave landlords vulnerable to liability for damages, Avail co-founder Laurence Jankelow said.
“Usually when you ask renters why they didn’t get insurance, it isn’t because it was too expensive — it’s because they forgot,” Jankelow said. “And since we require renter’s insurance in all our leases, we thought we should give [tenants] an avenue to help them get it.”
Jankelow co-founded Avail with Ryan Coon with the goal of helping owners of small-scale apartment buildings lease out and maintain their units. The platform connects landlords with listing services, draws up template leasing agreements, processes maintenance requests and facilitates rent collection.
Unlike apps such as Livly, which help big-name real estate firms manage amenitized high-rise apartment buildings, most of Avail’s users own apartment buildings with 10 units or fewer, Coon told The Real Deal earlier this year. The platform saves them from “using different tools for different parts of the rental experience,” which can result in landlords losing track of maintenance issues or late rent payments.
The platform launched in 2015 thanks to a $1 million seed funding round that year, followed by another $2 million investment in 2017, Coon said. In April, Avail secured $2.5 million in funding from St. Louis-based Cultivation Capital.
By the end of 2018, Avail was used by about 100,000 apartment owners across 15,000 zip codes with an especially heavy presence in Chicago, New York, San Francisco and Boston. It aims to reach 200,000 landlords by the end of 2019, part of what Coon called a “very deliberate” strategy to make sure Avail is not growing faster than is manageable.
Avail is aiming for a 10 percent share of the roughly 8 million people or companies that own rental properties across the United States.
Owners of buildings with five apartments or fewer can pay $20 per month to use Avail, then the rate spikes to $50 per month for buildings with six to 15 units. The largest building on the platform has 80 apartments, Coon said.
Softbank pumped Lemonade, which uses artificial intelligence to streamline insurance buying, with a $300 million investment round this spring. That put it ahead of rival insurance Jetty, which had raised $40 million as of April.
Renters who sign leases through Avail will be immediately offered a free quote to buy insurance through Lemonade, Jankelow said.