Rezi, a platform that leased vacant units from landlords, has shut down, adding to the list of proptech casualties.
The company rented units from landlords and then advertised them on its own platform and other listing sites. Led by Sean Mitchell, Rezi claimed its “machine-learning technology” could rent apartments quicker than landlords.
But it was not profitable, and Mitchell said the startup simply ran out of money. Capital dried up and higher interest rates made financing more expensive.
“Fundamentally, Rezi was working to try to grow and achieve some scale, but the capital required to do that was very significant,” said Mitchell.
Other companies in the real estate technology sector where large amounts of capital are required have also struggled.
“It’s disappointing, but not unique,” Mitchell said about Rezi’s closure.
Rezi raised $30 million from Silicon Valley investors. It planned to spend $10 million of that in 2018 to buy out leases in New York City and rent out the units itself. By 2021, it had leased over 2,000 units citywide, including a number in Harlem and Midtown.
The startup also expanded across the country. In Austin, it partnered with Ari Rastegar’s Rastegar Property Company, taking on 200 units across the firm’s portfolio.
But in the past two years, the company faced lawsuits alleging unpaid bills. A staffing company sued last year alleging Rezi owed it $700,000 for services.
Mitchell said an outside team has stepped in and is now managing the winddown of Rezi.
Mitchell has already launched a new startup, Ryse, which seeks to provide a platform for real estate companies to raise money from outside investors.
“If my new company would have existed before my old company, I don’t think my old company would have failed,” Mitchell said.
Proptech funding has fallen sharply. The sector raised $11.4 billion in 2023, down from $32 billion in 2021, according to the Center for Real Estate Technology & Innovation.
A number of real estate tech companies have been forced to shut down or layoff employees. Smart glass maker View, which raised $1.1 billion, laid off almost a quarter of its staff last March. Cadre, a real estate platform, was reportedly valued last year at just $100 million, down from $800 million a few years before.
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