Much of what we invest in at M13 is driven by changes in consumer behavior. Still, in a fast changing world, it’s important to think about the things that won’t change. People will always need a place to live and the decision of where to live, regardless of whether you’re buying or renting, is one of the most important decisions a consumer will make. For millennial consumers, rent represents 45% of their income during their first decade in the workforce. Yet the technology used in the housing industry and in the buying, selling, or renting process is still nascent.
Over 100M consumers rent in the US, a number that is growing and represents the largest percentage of US households in the last 50 years. In a rental transaction, there is always a landlord and tenant but often also a property manager. Landlords hire property managers as an extension of themselves - representing the landlord in filling the unit, responding to service requests, and handling payments.
Property management is a large category ($50B spent in the US), but when speaking to landlords, the industry is in need of a transformation. Property managers are given an average NPS of 8, indicating that the system is broken for both landlords and tenants. From a landlord’s perspective, property managers help fill the unit and respond to maintenance requests. However, across the US, large property managers have an average 43 day vacancy which equates to billions in economic losses for landlords.
Enter Doorstead. Doorstead is creating a new class of risk-free property management by aligning the incentives between property owners, managers, and tenants. Doorstead leverages technology, tightly coupled with operations, to automate and simplify the rental process - in the end, providing guaranteed rental income to landlords regardless of occupancy. Doorstead’s offering combines software, data, and service to drive better outcomes for their partners and a better quality of service for tenants. This unique value proposition is simple: higher rental income with less risk and better service, and why Doorstead has found success so early into the company’s journey.
The story of how we came to know Doorstead actually started 12 years ago. I met with Doorstead Co-founder and CEO, Ryan Waliany, to talk about his first startup when he was a college senior. Over the years, Ryan and I kept in touch and reconnected at the various turns. Shortly after Ryan left Uber to launch Doorstead, we reconnected along with co-founder, Jenn Lu, to talk about the residential rental world. In short order, Ryan and Jenn have built an incredible founding team with relevant experiences inside and outside of property management.
At M13, we seek to partner with audacious entrepreneurs trying to transform large industries, unafraid by complex systems. We are thrilled to partner with Doorstead in their seed financing alongside SVDC and our friends at SOMA capital and The VR Fund. Congratulations Doorstead on this important milestone!