Rental Startup PocketList's Rapid Rise and Fall

Francesca Billington

Francesca Billington is a freelance reporter. Prior to that, she was a general assignment reporter for dot.LA and has also reported for KCRW, the Santa Monica Daily Press and local publications in New Jersey. She graduated from Princeton in 2019 with a degree in anthropology.

Rental Startup PocketList's Rapid Rise and Fall

Armed with nearly $3 million, a list of prominent investors and tens of thousands of users, the apartment rental platform PocketList looked like a startup poised to take off.

CEO and co-founder Nick Dazé touted the proptech software that let potential renters get an inside peek at apartments before being listed as technology that "turned the entire rental market on its head." He sold it as a way for landlords to save billions of dollars by cutting down turnover time between tenants and assured renters access to honest, up-to-date information about units before they went online.


Investors — who poured a record amount of money into seed startups last year — hardly needed convincing. Dazé closed a $2.8 million seed round last April led by David Sacks' Craft Ventures.

"It's no surprise that renters have flocked to the service," said angel investor Spencer Rascoff, co-founder of Zillow and dot.LA, in announcing the raise.

By July, PocketList had unveiled the app in Los Angeles with plans to launch in San Francisco and San Diego by the fall. Seattle, Chicago and New York were next.

Users could rate apartment features like natural lighting and parking in the neighborhood. There was a question and answer page for past tenants to field concerns and a chat function for landlords and prospective renters. The idea was to make renters feel like they had unvarnished insight into a unit, much the way Yelp lets users rate restaurants.

But the rollouts in new cities never came. Even before PocketList went live, renters across the country stopped signing new leases as the pandemic cast a pall over the economy. Landlords — now navigating eviction moratoriums and mounting bills — didn't have the money or the inclination to spend on new apps, Dazé said.

In the last week of April, the CEO and his co-founder Julian Vergel de Dios gave notice to eight remote employees and around 20 investors that the company would be closing operations for good.

"I spent from February until last week fundraising," Dazé told dot.LA during the first week of May. "The ultimate pause of us beginning to wind things down is that we struck out on fundraising and few very, very large customer deals we've been working on for several months fell through."

Dazé attributed PocketList's undoing to the declining renters' market and a reeling economy that kept many landlords from buying in. But in the world of venture deals, losses don't always mark the end of a company. It's the absence of investor faith.

"For a lot of seed investors, it's almost like buying lottery tickets," said UCLA Anderson School of Management professor Olav Sorenson.

"The odds of it paying off are low, but if it does pay off, you could make a lot of money," he said.

Investing capital in early-stage startups is risky and uncertain. It's nearly impossible to collect data on startups that fold given that most close shop quietly, according to Pitchbook spokesperson Kayla Gordon.

But, according to Sorenson, roughly half of all startups that raise seed money will close a Series A. The seed round supplies entrepreneurs with enough money to prove to investors their business can be successful.

That metric of success depends on investors. Most venture-backed companies in this stage don't turn a profit, but some can show enough potential for growth to entice investors back.

The Pandemic and Proptech

Investors' appetite for early-stage startups waned a bit last year, with these riskier companies pulling in $44 billion in capital compared to $47.1 billion in 2019, according to Pitchbook data.

It was a particularly rough year for proptech companies. The industry was hit harder than other parts of tech, such as ecommerce, which flourished during the pandemic as consumers moved online. Venture investments in real estate technology companies plummeted by half to $9.1 billion globally in 2020 compared to 2019, according to Pitchbook.

Most of that drop off came from flexible and co-working office spaces, said Pitchbook analyst Zane Carmean. The stay-at-home economy dried up demand for office rentals.

"A lot of that has to do with the fact that WeWork required a large injection of capital from Softbank and core investors after the failed IPO in 2019," Carmean said by email.

Other real estate tech startups kept their footing. Carmean pointed to a boom in housing demand from young coastal workers moving to the Midwest, South and Mountain West as remote working took hold.

Inside other real estate companies, though, research and development teams were the first to cut spending, said Marcelino Diaz, an analyst focused on proptech at Plug and Play Ventures. With the market dwindling, they didn't have spare cash to experiment with new technologies.

Instead, they were spending on tech that played into pandemic needs.

"Offices and retail were looking at how startups could come to help with sanitization, space optimization and most importantly, social distancing," Diaz said.

Investors backed startups like L.A.-based OpenPath for its touchless entry systems designed to reduce face-to-face contact inside office buildings and elevators. Diaz's firm invested in virtual and augmented reality startups like Avatour and Giraffe360, whose camera devices and software helped real estate managers move tours online. And he kept an eye on startups whose UV light technology promised cleaner, disinfected commercial spaces.

"It was a pivot in terms of where investments went," he said.

PocketList's founders anticipated their app would carve out its own spot in the changing market. But the demand for rental units in coastal cities — the platform's target audience — was shaky.

Pitching the Platform

In 2018, Dazé and Vergel de Dios were coming off 86 venture rejections for their startup Block, a Chrome extension for apartment hunters to sort and share listings with roommates. Dazé admitted the concept was tricky to explain, which he said, is "probably why it didn't work."

They scrapped the software and built a new prototype each month until landing on the idea for PocketList in July of 2019. In the early days, the co-founders operated the service manually through Google Forms and email, matching renters eyeing apartments in each other's neighborhoods.

"I was on my computer 24/7, three-year-old daughter climbing on my back," said Dazé, who was also consulting for Clutter, a storage and moving startup with offices in L.A. "You make it work."

Eventually, he told Clutter's CEO, Ari Mir, he was quitting the job to build his company full time. He asked Dazé for a demo and quickly became PocketList's first investor in its pre-seed round.

"Basically we raised about a million bucks that weekend," Dazé said.

Mir's investment "got the ball rolling" and a few investors who turned down the pitch for Block even chipped in. The pair soon pulled in a new roster of investors for a seed round about six months later: Abstract VC, Wonder Ventures and angel investor Rascoff.

User sign-ups and engagement had been almost doubling month over month and at its height, about 75,000 renters used the app. The platform was free for renters, instead relying on landlords to pay a fee to receive notifications about how often users listed their properties.

But by the time their funding round closed, it was mid-April of 2020 and the economy largely shut down as stay-at-home orders tightened.

"An incredibly prominent investor of ours who has a large audience — a day after lockdown — called me and scared the shit out of me," said Dazé. "He's like 'You need to batten down the hatches.'"

Dazé terminated the company's office lease in Playa Vista and cancelled software subscriptions. He cut monthly spending back by 30% without laying off a single employee.

"If we hadn't done that, we may have ultimately failed earlier," he said.

The company scrambled. It introduced paid features like instant messaging (which later became free) and experimented with new pricing models for landlords. Despite the changes, Dazé said, "every single interaction in our platform slowed down a lot."

He made the call to close the business after a series of rejections for his next funding round. A few undisclosed customers also pulled out of expected deals. On April 29, he and Vergel de Dios broke the news to their eight employees during a Zoom meeting. That afternoon, they emailed investors.

Craft Ventures and Wonder Ventures could not be reached for comment.

"Our bank account isn't at zero," Dazé said. "We're not shutting down shop in a panic because we're running out of money, but there's not enough money for us to do anything dramatic like pivot the company."

Though he would not disclose how much capital remains, Dazé told investors "not to expect anything" back. He'll distribute whatever remains based on the amount each investor contributed.

The CEO was tight lipped about his next moves, but hinted at a potential deal that may acquire the company's software. And he's confident new companies — if not members of his own team — will try their hand at a similar technology.

As for the proptech market, commercial real estate is already picking back up as companies forecast returning to the office. In L.A., leases hardly got cheaper over the past year.

"I consider this a timing issue, like most great failures," said Dazé.

He chalks most of it up to COVID-19. In a world without it, he said, "things would have turned out very differently."

Editor's note: An earlier version said Daze had been working for several weeks to strike a deal with customers, it in fact had been months. This article has also been updated to clarify the total amount raised.

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⚖️FTC’s "Click to Cancel" Rule and Its Ripple Effect on Tech

🔦 Spotlight

Happy Friday Los Angeles,

The FTC’s new “Click to Cancel” rule is shaking up subscription-based tech. Now, instead of navigating a maze of cancellation hurdles, users can cancel subscriptions as easily as they signed up—with a single click. This shift is a wake-up call for SaaS, streaming, and app-based companies, where once-hidden exit options often kept users around simply because canceling was a hassle.

The rule also requires businesses to send regular renewal reminders, ensuring customers stay informed about upcoming charges. It's more than a cancellation button—it’s about transparency and giving users control over their decisions.

For startups, the impact goes deeper than UX adjustments. Many have relied on "dark patterns," which subtly discourage cancellations by hiding the exit. Now, companies must shift toward building genuine loyalty by delivering real value, not by complicating exits.

While this might affect retention rates initially, it could lead to more sustainable business models that rely on satisfaction-driven loyalty. Investors may start prioritizing companies that emphasize transparent, long-term engagement over those that depend on dark patterns to maintain retention metrics.

The rule opens the door to more ethical UX design and a truly user-centered approach across the tech industry. It may even set a precedent against manipulative design in other areas, such as privacy settings or payment methods.

Ultimately, the “Click to Cancel” rule presents an opportunity for the tech industry to foster trust and build stronger customer relationships. Startups and established companies that embrace transparency will likely stand out as leaders in a new era of customer-centric tech, where trust—not tricky design—is what retains users.

As the tech landscape continues to evolve, LA Tech Week 2024 offers a chance to explore these shifts in real-time. Check out the upcoming event lineups to stay informed and make the most of your time:

For updates or more event information, visit the official Tech Week calendar.


🤝 Venture Deals

LA Companies

  • Ghost, a company supporting top brands and retailers with streamlined logistics and fulfillment solutions, raised a $40M Series C funding round led by L Catterton to fuel its continued growth and innovation. - learn more

LA Venture Funds
  • Assembly Ventures participated in a $27M Series A round for Monogoto, a provider of software-defined connectivity solutions that enable secure, cloud-based IoT and cellular network management on a global scale. - learn more
  • Angeleno Group participated in a $32M Series C round for REsurety, a company that recently launched an innovative clean energy marketplace aimed at providing better financial and operational insights to support renewable energy transactions. - learn more

    Download the dot.LA App

    🌴🧑‍💻 Your Guide to LA Tech Week 2024

    🔦 Spotlight

    Happy Friday Los Angeles,

    As many of you know, LA Tech Week is right around the corner, kicking off next Monday October 14th bringing together founders, creatives, investors, and engineers for a week of immersive events, panels, and socials across the city. From blockchain and AI to biotech and design, LA Tech Week is a chance to dive into the ideas shaping today’s technology landscape.


    What to Look Forward To

    Insights from Visionary Leaders: Hear firsthand from industry trailblazers as they share stories, challenges, and key lessons from their experiences. Expect fresh perspectives on AI, venture capital, biotech, and the ethical questions around emerging technologies.

    Interactive Panels: This week isn’t about watching from the sidelines; it’s about engaging directly with the tech community. Participate in hands-on panels discussing everything from startup scaling to ethical AI, with honest insights from those actively shaping these fields.

    Networking Mixers & Social Events: Meet and connect with founders, VCs, developers, designers, and fellow techies across LA. Rooftop mixers, lunch meetups, and creative gatherings offer the perfect chance to spark ideas and collaborate.

    Plan your week with the daily lineup, organized by location for easy navigation:

    For updates or more event information, visit the official Tech Week calendar.

    Enjoy LA Tech Week 2024!!


    🤝 Venture Deals

    LA Companies

    • Clout Kitchen, a Los Angeles and Manila based startup, has raised $4.45M in seed funding, co-led by a16z SPEEDRUN and Peak XV’s Surge, to develop AI-powered digital twins, which enables gaming creators to produce realistic virtual avatars for content and fan engagement. - learn more
    • MeWe, a privacy-focused social media platform, has raised an initial $6M in Series B funding led by McCourt Global to support Web3 integration and expand its decentralized network for 20 millions users. - learn more

      LA Venture Funds
      • EGB Capital participated in a $10M Series A funding round for MiLaboratories, which develops software that enables biologists to independently analyze complex genomic data, accelerating research and discovery in fields like drug development. - learn more
      • Crosscut Ventures participated in the $13.75M seed round for Airloom Energy, a company focused on developing airborne wind energy technology to harness high-altitude winds, with plans to accelerate a pilot project in Wyoming. - learn more
      • Overture VC participated in a $5.5M Seed funding round for Molg Inc., a company developing robotics and software for circular manufacturing, designed to disassemble electronics efficiently and recover valuable materials to reduce e-waste and support sustainable production. - learn more


        LA Exits

        • Options MD, a Los Angeles based telemedicine platform that provides care for people suffering from severe and treatment-resistant mental illness, is set to be acquired by Resilience Lab, an AI-driven provider focused on enhancing mental health care access. - learn more

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        LA Tech Week 2024: Saturday-Sunday Event Lineup
        tech-week

        Here’s what’s happening during the closing weekend (Oct 19 - Oct 20) of LA Tech Week 2024! Events are organized by location so you can easily catch the sessions that interest you most.

        SATURDAY EVENTS

        BEVERLY HILLS

        12:00 PM

        • BIG Showcase (Invite Only):

        BIG Showcase (Invite Only)

        2:00 PM

        Light Dao

        Struck Capital, Seahorse Express

        EAGLE ROCK

        12:00 PM

        Sunrise Integration, Shopify

        EL SEGUNDO

        9:00 PM

        Administratum, Valar Atomics

        HOLLYWOOD

        10:00 AM

        Passes

        MALIBU

        6:00 PM

        • Malibu Beachfront Investors Networking & Wine Tasting:See Details

        Gaya Ventures

        MARINA DEL RAY

        6:00 PM

        • Awaken Your Spirit: A Journey of Transformation (Invite Only)

        Sagos Distro, Alma Wellness

        SANTA MONICA

        7:00 AM

        Founders Running Club

        8:30 AM

        Techstars

        9:00 AM

        Magic Mind

        StartupStarter, Inc., City of Santa Monica

        10:00 AM

        Gen She

        AI LA

        Crea, Barry's, Unsubscribe

        10:30 AM

        Plantologist

        11:30 AM

        • Pickleball Palooza (Invite Only)

        YouTube

        1:00 PM

        • Realfren Games: From strangers to an inner Realfren within 52 weekends: See Details

        Office for Humanity and Circuit Works

        • Talking blockchain technology with special guests: See Details

        LadyDayDao

        5:00 PM

        KARD, What's Plots

        THE VALLEY

        7:00 AM

        Camino5

        VENICE

        9:00 AM

        Westside Yogis

        11:00 AM

        Open App

        1:00 PM

        Ripe and Teddy's Hot House

        4:00 PM

        • Fashion Forward: How AI is Redefining the Fashion Industry: See Details

        VIAVIA, BNTO.RENT, ALMA.AI

        VIRTUAL

        11:00 AM

        BLCK UNICRN

        WEST HOLLYWOOD

        7:00 PM

        Next Sequence

        SUNDAY EVENTS

        INGLEWOOD

        12:00 PM

        Entrepreneur Ventures, VCPE GROUPS

        PLAYA DEL RAY

        2:00 PM

        AI LA, DELL, NVIDIA

        SANTA MONICA

        10:00 AM

        • Women Founders, Cold Brew & Beach View, Rooftop: See Details

        Clutch Talent

        11:00 AM

        11DollarSunglasses.com, Less Litter Foundation

        12:00 PM

        Data in LA, Amplitude

        12:30 AM

        New Moon, Warner UK Innovations

        TOPANGA CANYON

        3:00 PM

        Dreamore

        VENICE

        8:00 AM

        • Surf session with founders, investors, creators: See Details

        Surfed Club, Bow Shock

        12:00 PM

        • Podcast Panel and Brunch: LA Tech Community Builders: See Details

        WeAreLATech.com, Blankspaces.com

        VIRTUAL

        2:00 PM

        BLCK UNICRN


        For updates or more event information, visit the official Tech Week calendar.

        Enjoy LA Tech Week 2024!


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