June houses, a proptech startup that aims to make leasing less painful and more flexible for tenants and landlords, is coming out of hiding today with total funding of $ 50 million.
SoftBank Ventures Asia led the startup’s latest round – a $ 27 million Series B. The company’s other funders include FJ Labs, Kairos, TQ Ventures II LP (Scooter Braun, Schuster Tanger, Andrew Marks), Reshape, Quiet Capital and angel investors including musician Demi Lovato and Behance founder Scott Belsky.
The New York-based company also previously raised (but did not announce) a $ 13 million Series A – also led by SoftBank Ventures Asia – and $ 10 million in seed funding.
Founder and CEO Daniel Mishin first became interested in real estate with a missed train and an unscheduled stay at a cheap hostel in Berlin at the age of 11. The experience inspired him to start his first business at an early age, turning his grandmother’s empty apartment into a short-term rental space for backpackers. After starting and selling a hotel business, Mishin founded June Homes in 2017. He was motivated after his one struggle with finding an apartment in New York City.
“Prohibitive costs, foreclosure fees, complicated requirements, long-term rental commitments – it seemed incredibly difficult to get housing on these terms,” Mishin said. “I started to think that there was a real opportunity for innovation that could benefit tenants as well as pop moms and owners, and that’s how June Homes was born.”
Mishin founded the company on the premise that the current rental system is “broken” for both tenants and small landlords. Even the fact that we are using the word “owner” itself is very outdated, he said, as the word literally means “lord over the earth”.
“We still speak as if we were in the 16th century,” he said.
So how exactly does it work? The company says it has developed an algorithm that detects poorly priced rental apartments that often need repairs. He has also developed a process that he says can inspect, upgrade, renovate and list units for rent in under 72 hours. Then, according to Mishin, people can discover, apply for and move into a new apartment “in as little as three hours.”
“Our proprietary algorithm automatically performs a best-use analysis for each building and chooses which June Homes model to apply to it,” Mishin said.
The startup claims that its units are fully customizable. Tenants can rent furnished or unfurnished, with roommates or alone, and have the option of staying between one and 18 months. The company says that unlike some short-term social housing companies that charge tenants considerably for flexibility, its rental rates are more in line with the price range you’d expect to pay with a traditional lease.
On the flip side, June Homes says she helps homeowners by working to help them fill properties faster and by dealing with things like tenant defaults, non-payments and building performance. The startup also eliminates brokerage and management fees, and never charges owners an upfront fee, according to Mishin. Instead, the June houses processes all rent payments from tenants through its platform and pays landlords either a smaller fixed payment each month or a portion of income collected from tenants.
Over the past six months, according to Mishin, June Homes has seen a 150% increase in tenant growth and a 137% increase in unit growth. Specifically, he signed thousands of tenants in New York, Washington, DC, San Francisco, Los Angeles, Philadelphia and Boston. In particular, millennials and Gen Z looking for convenience and flexibility are among the platform’s biggest users.
“The new generation deserves more when it comes to housing, and June Homes has created the easiest and fastest way for them to find their place in a new city,” said singer Demi Lovato, who invested in the framework. of the company’s A-Series last year. , in a written statement.
Because it offers more flexible rental conditions, tThe company claims to have 25.5 times fewer defaults than the industry average. It also states that it can refill units 10 times faster than traditional legacy systems. For example, Mishin said, in July 2021, the average June Homes New York apartment was rented in 7.5 days, while all other rental listings were rented on average in 76 days.
Going forward, June Homes plans to use the new capital primarily to expand to other markets in the US in the short term and then globally over the next 12-18 months. He also plans to do more hiring. Currently, the company has 144 employees, three times more than at the same time last year.
Sherman Li, Partner of SoftBank Ventures Asia and Member of the Board of Directors of June Homes, believes that June Homes provides today’s tenants “exactly what they want in the post-pandemic world – flexibility, access and convenience He wrote by email.
He said SoftBank was also impressed with the company’s ability to build such a large housing company “without owning a single property.”
While SoftBank Ventures Korea initially focused on the South Korean market, it has since expanded to start-ups around the world.
“We are actively looking for early stage or growth stage startups that have strong business potential regardless of geographic boundaries, and June Homes is certainly one of those cases,” Li said.