Wednesday, the proptech startup Nest Egg announced that it had raised $ 7 million. CEO Eachan Fletcher said the Chicago-based company initially planned to increase its Series A cycle next year, but added that demand increased for its digital finance and property management services during the COVID pandemic. 19 convinced the team to move their fundraising forward.
“We give homeowners and renters tons of tools to align their spending with their income,” Fletcher told Built In. “It’s always a good deal – who doesn’t want to hit their income sooner and pay their income. bills later, right? But, it’s quadrupling good right now when people are under extra financial pressure. “
NestEgg was officially launched in January, after three years of market research and development. Prior to starting the business, Fletcher was CTO of Expedia and at the same time operated a few small rental properties. At work, he constantly ran into his friend Jeff Slipko – then Expedia’s marketing director – and the two complained about the time and cost of running their rental residences. After a while, they realized that this was the only non-work-related topic they were talking about.
“We looked each other in the eye, challenged each other to quit our day jobs and decided we were just going to do it,” Fletcher said.
The two have decided to commit to NestEgg full-time, with the goal of providing an on-demand property management service to some 12 million independent homeowners across the United States.
With NestEgg, users can coordinate and book property maintenance professionals, find tenants, and update rental, insurance and payment contracts. The company’s subscription service also offers a rental insurance program – NestEgg uses its own line of credit to automatically pay landlords on the first of each month and allows tenants to repay the amount on flexible terms. Fletcher said the feature has been particularly popular during the pandemic, and its monthly subscriber count has grown by 30% each month to reach over 3,000 owners.
“We’ve helped thousands of tenants stay in apartments and stay on good terms with landlords,” Fletcher said. “They wouldn’t be able to do it on any other platform.”
The startup plans to invest the Series A cycle in building NestEgg Pay, a feature that allows homeowners to leverage their rental income as a source of instant, interest-free credit. Scheduled to debut in the first quarter of 2021, NestEgg Pay will offer homeowners a cash advance to cover emergency maintenance and other real estate costs, and allow them to pay interest-free expenses in monthly installments. Fletcher said the feature is now in beta and has reduced the time its owner users take to resolve a maintenance request from 15 days to 24 hours.
“That kind of restores your faith in humanity, doesn’t it?” said Fletcher. “I think owners can have a tough, tough kind of reputation. What this has shown us is that people want to hold onto their assets and they want to provide someone with a safe and functioning home, but some of these financial headwinds are kind of getting in the way. “
Ultimately, the startup also aims to automate the brokerage process, allowing homeowners to refinance their existing properties at more competitive rates, as well as find and buy their next investment property through the platform. The company also plans to expand to all states in the United States, with the goal of making real estate investing more accessible to more people.
The 18-person company plans to hire 40 new software engineers over the next three months. The Series A round brings the total investment in NestEgg to $ 11 million. Hyde Park Venture Partners led the round, with participation from Bonfire Ventures, BAM Ventures, Financial Venture Studios, Dreamit Ventures and Hyde Park Angels.
NestEgg isn’t the only property management startup to have received investments recently.
In August, the Boston-based Breezeway raised $ 8 million in financing; in July, the New York company MeetElise raised $ 6.75 million; and in May, the Seattle-based company Knock raised $ 12 million in funding.