PocketList launched in July of last year with almost $3 million backing its innovative take on listing rentals on the market. The startup promised renters a way to see an apartment before it was listed. The CEO and Co-Founder, Nick Dazé, stated that the platform would turn “the entire rental market on its head,” and many investors bought into the promise that PocketList would save landlords billions by cutting down the turnover time between tenants while being offered a unique and up-to-date information hub about units before they hit the market.
Investors who participated in seed funding the startup last year, include David Sacks' Craft Ventures and angel investor Spencer Rascoff, co-founder of Zillow and dot.LA.
PocketList’s platform launched in Los Angeles, with San Francisco and San Diego planned for the fall of 2020, and later Seattle, Chicago, and New York. But the expansions never happened. Before PocketList went live, the real estate market took a hit due to the Covid pandemic and the number of new lease signings dropped dramatically. As everyone floundered with what to do to keep businesses up, according to Dazé, landlords stopped looking for new avenues to manage their businesses.
By the end of April, Dazé and Co-Founder Julian Vergel de Dios, said the company had eight remote employees and around 20 investors, marking the end of PocketList.
Dazé explained to dor.LA,
"I spent from February until last week fundraising. 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."
Investing in a startup is already tricky business, with the whole ordeal being equated to entering a lottery. Adding a global pandemic to the mix made 2020 a particularly hard year for companies when it came to raising additional funds, let alone funding rounds to launch a company.
In fact, many investors saw the mistake in investing in 2020 thanks to the WeWork nightmare. SoftBank pumped millions into WeWork to get it to go public and its IPO failed before the pandemic started.
Still, PocketList’s team was hoping their startup was different and able to hold its own within a drastically changing market climate. But the demand for rental units, specifically in coastal cities, was unstable. And no matter what the company tried, it couldn’t keep up.
Maybe it was solely because of the pandemic. Maybe it was because the business model relied on landlords to pay the fees instead of the tenants. Maybe this was a model that excluded those living off of Section 8 and didn’t take into consideration other platforms that do the same but for less.
Whatever the reason, PocketList is officially shutting its doors not even a year since its launch. Dazé said:
"Our bank account isn't at zero. 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."
Dazé has yet to release a statement on what his plans are next, but he chalks this failure, "like most failures" up to bad timing.