US Startup Doorstead Raises $21.5M in Series B Funding

Doorstead has raised $21.5M in Series B funding as the startup looks to expand its property management and rent guarantee offering.

The investment round was led by Avanta Ventures with contributions from MetaProp, M13 and Madrona. As part of the investment round, Doorstead also snapped up the Boston assets of investment property-focused startup Knox Financial to bolster its portfolio of properties.

Doorstead uses data science and machine learning to predict the rental income potential of a property, and makes money through an 8% management fee.

According to Doorstead's website, the company's process includes getting an offer that "guaranteed rental income and when your property will start generating rent", property inspections, repair management and photography. Doorstead lists the property when it is rent-ready and finds a tenant, then provides guaranteed rent payments risk-free.

The risk is that Doorstead takes on the risk of paying the difference if the property doesn't generate the "guaranteed rent" decided by its algorithm.

It's a risk that paid off. Doorstead was founded in 2019, has 150 employees, and has already raised $37m in investment thanks to a patent pending pricing system and guaranteed income product. Waliany says the company now wants to focus on "profitable growth".

In an article posted originally on TechCrunch, Doorstead co-founder and CEO Ryan Wailany said:

"When we started, we thought that, ‘we’re just going to make a tech-enabled property management company. We’re going to build like Uber Eats for property management.’ But when we started talking to customers, we realized that we were wrong.

"We realized that there was a bigger problem that was unaddressed in the market, and that was that property owners were getting overpromised rents. Their properties could sit vacant for three or six months and in some cases, it cost them their home. So we thought, ‘what if we can give them a guarantee upfront before we find a tenant?’”

The startup operates in seven markets in California, Washington and Massachusetts with plans to “double or triple” its footprint this year—with upwards of $1Bn worth of property currently under management.