Property management startup led by former DoorDash execs raises $15 million
Photo by Ronnie George on Unsplash
Single-family homes are the fastest-growing segment of the US rental market, fueled by a shortage of affordable starter homes and the rising rate of Millennial household formation.
Darwin Homes, a property management startup aimed at single-family rental investors, announced today that it has secured $15 million in Series A financing. The round was led by Canvas Ventures, a group of early-stage capital investors, and saw new contributions from Camber Creek as well as existing backers Khosla Ventures, Wave Capital, Pear Ventures and Silicon Valley Bank.
Angel investors included Tony Xu, CEO and co-founder at DoorDash, Ryan Graves, former SVP of Global Operations at Uber, and Andrew Marks, partner at TQ Ventures and the son of billionaire Howard Marks.
Darwin Homes was co-founded by Ryan Broderick and Zach Kinloch, both early executives at DoorDash. Observing a high rate of individual investor-owned single-family rental (SFR) homes, the duo sought to simplify the management of these properties by pairing local teams with proprietary software.
“Single-family rentals are among the most attractive yet untapped asset classes in the US today, offering similar performance to the S&P 500 over the past 25 years with significantly less volatility,” said Darwin Homes co-founder Ryan Broderick in a press release.
“But, until now, managing these rental properties could be excruciating — ownership struggling to find reliable and professional local property managers in a highly fragmented industry.”
Darwin Homes currently operates in five cities in Texas and two in Ohio. The company offers a flat monthly management fee — typically $99 per month, plus 75 percent of the first month’s rent — and provides a variety of services from repairs and maintenance, to resident screening and rent collection, all accessed through a single online platform.
Darwin Homes-backed properties appeal to renters seeking accountability from landlords, featuring 24/7 digital support for maintenance requests, online rent payments and easy-to-schedule repairs. Renters can go on self-guided tours of available rentals thanks to smart locks and submit applications with the click of a button.
Tapping into the Series A funding, Darwin Homes plans to expand to additional markets in Florida, Ohio, Tennessee, Colorado and North Carolina. There are approximately 23 million SFR units in the United States, comprising 53 percent of the rental market, according to Freddie Mac. This burgeoning sector experiences high occupancy rates and sustained rental growth.
While apartment rentals have been hard-hit by the COVID-19 pandemic, demand has increased for SFRs due to the additional square footage, outdoor space and privacy they offer. As home prices rise and inventory dwindles, more renters could look to SFRs in the coming years to fill the void in the starter home market.
Published at Mon, 25 Jan 2021 23:06:24 +0000