Nestio raises $4.5M from RE heavy hitters
With "strategic growth" round, startup has now raised $16M
Residential listings startup Nestio has raised $4.5 million from several major New York developers — a sign of their growing desire to invest in the burgeoning real estate tech sector.
Investors in the latest round include Rudin Ventures and the Moinian Group’s venture arm Currency M, along with the Durst Organization, LeFrak Ventures (an affiliate with Lightstone) and Lightstone Group affiliate Torch Venture Capital, said Nestio CEO and co-founder Caren Maio.
The round was co-led by Trinity Ventures, which also led Nestio’s $8 million Series A in December 2015, and Camber Creek, a New York City-based venture capital firm focused on real estate tech.
According to Maio, the “strategic growth round” brings Nestio’s total haul to $16.35 million. The new funds will be used to develop additional marketing tools for Nestio’s landlord and manager clients.
The New York-based startup, which launched in 2011, lets property owners, managers and brokers with large books of business track, manage and market their rental listings. Over the last few quarters, the company has rolled new marketing tools — including consumer-facing websites for its clients.
“[We’re] focused on the ultimate arbiters of inventory — owners, operators, management companies and brokers with books of exclusives,” Maio said.
The increased focus on owners and management — and not just brokers — is what drove Camber Creek’s interest in the round, said Jeffrey Berman, a general partner at Camber Creek.
“What multifamily owners/managers try to solve for is vacancy loss,” he said, referring to a competitive rental market where renters are currently calling the shots. “They want their apartments on the market for as little time as possible, and want to make sure the information in the listing is controlled and uniform.”
On average, Nestio claims it has helped clients reduce days on market by more than 20 percent. Currently, Nestio has “hundreds of thousands” of units on its platform, according to Maio, who said that its inventory rose 250 percent over the last 12 months. Nestio facilitated nearly $600 million worth of transactions during the last 12 months, the company said.
The backing from some of New York’s biggest real estate players comes amid a wave of investment by owners and operators, who see value in investing in — and using — new real estate technology.
Overall, VC investors poured $654.7 million into real estate tech startups in June, up 104 percent year-over-year, according to research firm RE:Tech.
Rudin Management — which has also invested in several companies and Fifth Wall Ventures, the real estate-focused VC fund — had been using Nestio for three years before joining the latest funding round, said Michael Rudin. He said whenever possible, the firm likes to try out products before pulling out its checkbook.
In Nestio’s case, he said, “we knew firsthand how our leasing team has been using [it] and how much it helped them in their day-to-day activities.”