On today's episode of Office Hours, I'm excited for you to get to know Austin Allison, my co-founder and CEO of our company, Pacaso.
Birds were the first dwellers Austin served with his boyhood bird-house business. Now, with Pacaso, our goal is to democratize second-home ownership by enabling people to co-own an amazing second home --- for 1/8 the cost.
Hear his take on what it meant to have his first company acquired, his number one tip on how to keep his crew focused and how to best navigate what seems like weekly iterations of the start-up environment.
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"Startups are incredibly hard. I mean, like every day is you wake up and it's like eating nails for breakfast. You know, you're just you're just dealing with problem after problem and opportunity after opportunity. And if you love what you're doing and you really believe in what you're doing in your heart, the hard work just feels natural. It feels like a blessing." — Austin Allison
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<strong>Austin Allison</strong> co-founded Pacaso to make the dream of second home ownership a reality for more people after experiencing the profound effect it had on his own life. Pacaso is Austin's second startup. In 2008, he founded dotloop in his hometown of Cincinnati, a company that created software to seamlessly manage real estate transactions. Zillow acquired dotloop in 2015, and Austin continued to run dotloop as a Zillow executive until 2018. He lives in Napa, CA with his wife Angela and dog Paris and enjoys spending time in his second home in Lake Tahoe, CA.
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LeaseLock has made rent deposit-free to renters of hundreds of thousands of apartments owned by companies like Greystar and Cushman Wakefield. It is now also eyeing single family portfolios.
The lease insurance platform closed a $52 million Series B round, and will use the funding to continue supporting the 1.5 million homes it insures, while looking to expand its insurance types to include individual owners.
<p>"We're not playing this as just a deposit game," said chief executive and co-founder Derek Merrill. "[There is] a real need for an insurer tech platform for not just rental housing, but also for [single family housing]."</p><p>LeaseLock was founded in 2013 by Merrill and president Reichen Kuhl, who connected through Mucker Capital's accelerator program.</p>
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<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNTU5NzUwMS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyODUzMTcyMn0.emXB9OVNlILUXwxOL2yrDEFweNpNpDBsCuuOTEBngmE/img.jpg?width=980" id="f31b2" class="rm-shortcode" data-rm-shortcode-id="99baa48080cbaef2d7e8d5bab67db9ad" data-rm-shortcode-name="rebelmouse-image" data-width="2002" data-height="1176" />
<small class="image-media media-caption" placeholder="Add Photo Caption..."> Derek Merrill and Reichen Kuhl are the co-founders of LeaseLock.</small></p>
<p>Kuhl had been struggling with the rental process in New York, and the pair realized that eliminating deposits could make the payment process smoother for renters that wouldn't otherwise meet the criteria. The company launched in 2016, after they put together an insurance product that would scale for future growth.<br/></p><p>"There are almost 50 million apartment homes in the United States," said Merrill. "About a third of those are enterprise and another two thirds are kind-of independent owners. And if you look across all of those, you could ask who would want [to deal with a] deposit in any one of those? And the answer is nobody. So the market is gigantic. And I think we're just scratching the surface."</p><p>The Marina Del Rey company eliminates deposit payments for renters by giving them the ability to pay a small monthly fee in addition to their rent. This payment is integrated in enterprise software systems, so that there is no additional paperwork renters have to complete. If any accidental damage to the property occurs, renters are protected through LeaseLock's insurance.</p><p>It operates in all 50 states, and has insured $1 billion in leases to date. Over the course of 2020, the number of homes on the platform grew fivefold, to 1.5 million.</p><p>There are a few other companies in the deposit replacement market, like Jetty and Rhino, but those are consumer facing and don't integrate into the software landlords used to collect rent. </p><p>"When we started pursuing this kind of integrated approach, it really started to set us apart," Merrill said. "Operators just want to get out of the deposit completely. And the only way to do that is to rip it out of your actual software workflows."</p><p>The round was led by London-based Westerly Winds and Wildcat Venture Partners. Its other investors include SoftBank Ventures Asia, Vertex Ventures US, Liberty Mutual Strategic Ventures, American Family Ventures, Moderne Ventures, Strata Equity Group, Veteran Capital and Mucker Capital.</p>
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The largest property technology or "proptech" venture firm Fifth Wall is joining the SPAC boom.
In a filing with the Securities and Exchange Comission this week, the firm said its creating a special acquisition company (SPAC) and intends to raise up to $287 million by selling 28.75 million shares at $10 a piece to seek out opportunities in real estate tech.
<p>A SPAC is a company created solely to raise capital and merge with a private company. These so-called blank-check vehicles <a href="https://news.crunchbase.com/news/2020-is-the-year-of-the-spac/" target="_blank">have become enormously popular</a> with more SPACs completing IPOs last year alone <a href="https://www.fool.com/millionacres/real-estate-investing/articles/real-estate-venture-capital-firm-fifth-wall-launching-a-new-real-estate-spac/" target="_blank">than in the previous 10 years combined.</a></p><p>The filing discloses that Fifth Wall manages $1.3 billion and has invested in more than 40 companies, including six that have gone on to become "unicorns." Fifth Wall ranks as one of the largest VC firms in Los Angeles and is the largest proptech firm in the world. </p><p>The company <a href="https://www.prnewswire.com/news-releases/fifth-wall-closes-new-503-million-fund-the-largest-real-estate-venture-capital-fund-raised-to-date-300885325.html" rel="noopener noreferrer" target="_blank">announced the close of its second real estate technology fund </a>in 2019, with $503 million in dry powder. Last year, <a href="https://dot.la/fifth-wall-treehouse-games-2646256556/fifth-wall-venture-firm-is-now-a-b-corporation" target="_blank">it became a Certified B Corporation or "B Corp,"</a> which means it is legally required to consider the impact of its decisions on workers, customers, suppliers, community and the environment.</p><p>A spokesman for Fifth Wall declined to comment on the offering.</p>
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