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JLL, Khosla lead Jones’ $12.5M Series A for real estate vendor compliance
Commercial real estate tenants and property managers have to abide by strict liability rules that any vendor entering the property must have insurance certificates and meet other requirements. The approval process for this currently can take days and is still largely done on paper.
Enter Jones. The New York-based commercial real estate startup is curating a marketplace of pre-approved vendors for tenants and property managers to find and hire the people they need in a compliant way.
To continue advancing its network, the company announced Monday it raised $12.5 million in Series A funding led by JLL Spark and Khosla Ventures that also included strategic investors Camber Creek, Rudin Management, DivcoWest and Sage Realty. This new investment brings Jones’ total raised to $20 million, according to Crunchbase data.
Jones, founded in 2017, also manages certifications and approvals, moving the whole process online. Its technology can process an insurance certificate in less than an hour and reduce the overall vendor approval time to 2.5 days — from 12 days — with 99.9% accuracy, co-founder and CEO Omri Stern told TechCrunch.
The accuracy portion is key. With much of the work being done by hand, current accuracy is at about 30%, he added. In addition, the certifications are lengthy, and it is typically up to property managers to parse through the insurance documents to identify what is missing rather than spending time with tenants.
“In the consumer world, a homeowner expects to go on a marketplace and find a service and hire them,” Stern said. “Office managers and tenants can’t get their preferred vendors through the approval process, so we want to provide a similar digital experience that they can consume and use in real estate.”
He says Jones’ differentiator from competitors is that all of the stakeholders are in place: a group of high-profile real estate customers, including Lincoln Property Co., Prologis, DivcoWest, Rudin Management, Sage Realty and JLL.
Yishai Lerner, co-CEO of JLL Spark, agrees, telling TechCrunch that commercial real estate is one of the largest and last asset classes that is undergoing a technology transformation, similar to what fintech was 20 years ago.
He estimates the U.S. market to be $16 trillion, of which technology could unlock a lot of the value. That opportunity was one of the drivers for JLL to create JLL Spark, where Jones is one of the first investments.
Though Lerner spent time with property management teams on the ground, he became up close and personal with the problem when his wife, while moving offices, found out her vendors were not allowed in the building because they didn’t have the right insurance.
“We learned that property managers spend half of their time just working to verify the compliance of vendors coming into their building,” Lerner said. “We wondered why there wasn’t technology for this. Jones was doing construction at the time, and we brought them into commercial real estate because they had an example of how technology could solve the problem.”
Meanwhile, the Series A comes at a time when Stern is seeing Jones’s SaaS tool take off in the past 10 months. He would not get specific with growth metrics, but did say that what is driving growth is “competing against the status quo” as companies are searching for and adapting workflow solutions.
The company intends to use the new funds on product development in both quicker and easier approvals and bringing on new vendors. Jones already works with tens of thousands of vendors. It will also focus on integration, offering an API that could be used in other industry verticals where compliance is necessary.
Stern would also like to continue building the team. Having brought in real estate experts, he is now also looking for people with backgrounds in fintech, cybersecurity and insurtech to bring in additional perspectives.
“We are building an incredible company with the opportunity to be the next big digital marketplace,” he added.
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Homebuying startup Flyhomes closes $150 million Series C
Amid a recent tear in residential real estate investment, venture capitalists are looking to get a piece of homebuying startup Flyhomes.
The five-year-old startup announced today that they’ve closed a $150 million Series C round co-led by Norwest Venture Partners and Battery Ventures. Fifth Wall, Camber Creek, Balyasny Asset Management, Zillow’s Spencer Rascoff and existing investors Andreessen Horowitz and Canvas Partners also participated in the round. Norwest’s Lisa Wu and Battery’s Roger Lee are joining Flyhomes’ board as part of the deal.
The end-to-end residential real estate startup says they handle “every step of the homebuying process, from brokerage to mortgage,” building financial tools that customers need throughout the process. The company has now raised some $310 million in total.
The startup is well-positioned during a historic run-up of home prices in the U.S. that has made deals more competitive than ever for prospective buyers. A recent report by Redfin notes that more than half of U.S. homes are selling above their asking price right now, up from one in four a year ago. A Zillow report notes that nearly half of U.S. homes are selling within one week of going on the market.
Flyhomes’s Cash Offer lending product allows consumers purchasing homes to make more attractive all-cash offers to sellers, with the company noting that even if a buyer ends up backing out of the deal, Flyhomes will still buy the home themselves. Central to the startup’s business is sellers being more amenable to all-cash offers, allowing consumers making them to win deals even when they aren’t the highest bidders.
The company says it has bought and sold more than $2.6 billion worth of homes since launching in 2016.
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Notarize raises $130M, tripling valuation on the back of 600% YoY revenue growth
When the world shifted toward virtual one year ago, one service in particular saw heated demand: remote online notarization.
The ability to get a document notarized without leaving one’s home suddenly became more of a necessity than a luxury. Pat Kinsel, founder and CEO of Boston-based Notarize, worked to get appropriate legislation passed across the country to make it possible for more people in more states to get documents notarized digitally.
That hard work has paid off. Today, Notarize has announced $130 million in Series D funding led by fintech-focused VC firm Canapi Ventures after experiencing 600% year over year revenue growth. The round values Notarize at $760 million, which is triple its valuation at the time of its $35 million Series C in March of 2020. This latest round is larger than the sum of all of the company’s previous rounds to date, and brings Notarize’s total raised to $213 million since its 2015 inception.
A slew of other investors participated in the round, including Alphabet’s independent growth fund CapitalG, Citi Ventures, Wells Fargo, True Bridge Capital Partners and existing backers Camber Creek, Ludlow Ventures, NAR’s Second Century Ventures and Fifth Wall Ventures.
Notarize insists that it “isn’t just a notary company.” Rather, Canapi Ventures partner Neil Underwood described it as the “last mile” of businesses (such as iBuyers, for example).
The company has also evolved to “also bring trust and identity verification” into those businesses’ processes.
Over the past year, Notarize has seen a massive increase in transactions and inked new partnerships with companies such as Adobe, Dropbox, Stripe and Zillow Group, among others. It’s seen big spikes in demand from the real estate, financial services, retail and automotive sectors.
“In 2020, the world rushed to digitize. Online commerce ballooned, and businesses in almost every industry needed to transition to digital basically overnight so they could continue uninterrupted,” Kinsel said. “Notarize was there to help them safely close these deals with trust and convenience.”
The company plans to use its new capital to expand its platform and product and scale “to serve enterprises of all sizes.” It also plans to double down on hiring in the next year.
“Notarize is disrupting outdated business models and technologies, and there’s massive potential, particularly in the financial services space, as more companies will need to offer secure digital alternatives to in-person transactions,” Canapi’s Underwood said.
Notarize’s success comes after a difficult 2019, when the company saw “critical financing” fall through and had to lay off staff, according to Kinsel. Talk about a turnaround story.
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TFLiving, with $4.8M in seed funding, wants to be the Uber for amenities
TFLiving, looking to bring amenities to residential and commercial spaces, has today announced the close of a $4.8 million seed financing led by Camber Creek. Courtside Ventures, and other strategic investors, also participated in the round.
TFLiving uses technology to connect service providers, like massage therapists, yoga instructors and dog walkers, with property managers and their residents. The service allows residents to sign up for classes or services, as well as request other community events or services, directly from an app.
The most popular use case of the service is fitness, both classes and individual trainings, but TFLiving offers a relatively broad variety of services and experiences to residents at its 300 partnered properties.
Here’s how it works.
TFLiving signs partnerships with property managers of buildings that don’t currently offer amenities, or want to complement existing amenity offerings. After checking out the building, TFLiving determines if there is any under-utliized space in the building, such as a rooftop or a vacant unit, that could be repurposed for community classes.
After evaluating the space, TFLiving surveys residents and determines what they’re interested in via the app, which then serves up options from actual service providers on the service within the guidelines of the property manager’s financial guidelines.
One of the strengths of the business, according to founder and CEO Devin Wirt, is that the cost structure of the platform is highly customizable. Who pays is a question that can be answered by the property manager. If the building has a huge budget for community engagement and the property manager sees value in offering five classes/month and unlimited on-demand massage, they can choose to do so. The property manager can also grant TFLiving access to the building without paying a dime, passing on the full cost of the service to residents.
In most cases, property managers will foot the bill for community events, while residents pay for their own individual services like massage and dog walking.
Because TFLiving’s pricing is based on service and not calculated by number of units, the product can be priced at an affordable cost within the budget of the property and based on demand from the residents.
TFLiving also allows property managers to mark up the class or service and keep a cut of the profit. For example, if a property manager doesn’t have the budget for community classes or services, but doesn’t mind letting residents book individual personal training in the on-site gym, that property manager can mark up the cost of fitness classes by 20% and generate some revenue that could eventually go toward community events.
“One of the things that we stay pretty stringent on is just how far they’re able to market the prices,” said Wirt. “As a core mission of staying affordable to all asset classes, we understand that because we’re not paying a lease, we’re able to charge below market pricing. We still want to stay true to our core mission that we want to provide affordable services.”
Unlike ClassPass, which also connects service providers to users in the fitness space, TFLiving does not dynamically price its various classes and services based on popularity or quality. Fitness classes, for example, are always between $50 and $80, with geography being the main determining factor on specific price.
The company declined to share the revenue breakdown between the company and service providers, but noted that it varies by vertical and that service providers receive a majority of the revenue.
TFLiving currently has agreements with properties across 29 states, with contracts at more than 800 properties, soon covering more than 200,000 units.
Wirt says that he sees the potential to implement TFLiving in commercial spaces as well, such as offices.
Moreover, TFLiving has worked on the tech side to be as useful, not necessarily as prominent, as possible. TFLiving integrates with a variety of property management platforms, from mobile doorman apps to platforms for paying rent to maintenance requests. Residents using those apps can request and book TFLiving amenities straight from those platforms.
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