The platform is geared toward small independent landlords who need help with property maintenance, rent collection and searching for new tenants.
Residential rental management startup NestEgg has raised $7 million in Series A funding, according to an announcement on Wednesday. Hyde Park Venture Partners led the round with participation from Bonfire Ventures, BAM Ventures, Financial Venture Studios, Dreamit Ventures and Hyde Park Angels.
This brings the startup’s total funding to $9.4 million, with BAM Ventures, Financial Venture Studios, Dreamit Ventures participating in the company’s Pre-Seed and Seed rounds in 2017, 2019 and March 2020.
“With more financial pressure on landlords and tenants as a result of the current economic climate, it’s more important than ever for landlords to have access to tools that deliver strong cash flows,” said NestEgg co-founder and CEO Eachan Fletcher in a written statement. “As small independent landlords ourselves, my co-founders and I have built a platform that makes the income reliable and the management easy.”
NestEgg’s platform is geared toward small-time, independent landlords who need help with property maintenance, rent collection, upkeep services and searching for new tenants. Landlords can sign up for a free NestEgg subscription, which includes access to on-demand customer service, a maintenance help desk and access to NestEgg-vetted maintenance pros, online rent processing, an income and expenses tracker, and a tenant portal.
However, landlords can sign up for NestEgg’s Rent Advance and Rent Assured programs, which offer additional features. For $5 per month with Rent Advance, NestEgg provides advance rent payments on the 1st of the month. Then, NestEgg sends payment reminders to each tenant and collects rent through the NestEgg tenant platform. For $49 per month with Rent Assured, NestEgg will cover up to four months of lost rent due to tenant default and provide eviction coordination assistance.
“As long as the resident pays by the end of the month, we’re happy,” Fletcher said in an emailed statement to Inman about Rent Advance. “So if they owe $1,000 on the 1st, we pay the landlord $1,000 on the 1st.”
“Then the resident can pay $300 on the 1st, and $700 on the 25th if they want [and] if the resident doesn’t pay the full amount back, we’ll get the funds back from the landlord,” he added. “They won’t be surprised by that because they can track the status in real-time in the app and we’d be in touch.”
In addition to rent collection services, landlords in Illinois, Wisconsin and Texas can sign up for on-demand maintenance services from NestEgg-vetted professionals. All the costs are pre-negotiated and provided upfront, with a 30 percent discount. NestEgg’s team will coordinate and schedule all services, which come with a 14-day happiness guarantee.
For upkeep, landlords can receive HVAC maintenance for $299 per year, yard care for $99 per visit, and snow removal for $59 per visit, all of which come from NestEgg’s network of professionals. Like NestEgg’s rent services, landlords can request and track all maintenance and upkeep services from their desktop or mobile devices.
“NestEgg assures that landlords will receive rent by the first of the month, have the option to resolve maintenance issues using NestEgg Pros or their own contractors, and reduce the administrative burden small independent landlords face,” Fletcher explained. “[We] currently have over 3,000 landlords using their platform across the United States, with nearly 2,000 joining in the last five months.”
Fletcher said the Series A funding will be used to hire 40 new employees by the first quarter of 2021. Those new hires will be spread across NestEgg’s landlord and resident experience, rent collection, NestEgg Pay, maintenance marketplace, research & development, marketing and finance teams.
The funds will also be used to launch NestEgg Pay, which falls in line with the boom in pay-in-four services by companies such as Afterpay, QuadPay, Klarna and PayPal. With NestEgg Pay, landlords can pay for NestEgg maintenance and leasing expenses in two, four or six monthly installments.
“For example, a $600 plumbing job can now be paid in six $100 installments seamlessly deducted from their rental income,” the press release explained. “NestEgg Pay allows landlords to worry less about cash flow crises and pay on a schedule that best fits their financial needs.”
Hyde Park Venture Partners partner Ira Weiss said NestEgg fulfills the needs of the 12 million small-time landlords who don’t have the same support as larger, institutional property owners.
“The founders of NestEgg have a compelling vision to make owning residential rental property as easy as owning stock and bonds,” he said. “This team spent years building tech products at Expedia, and are bringing the same creativity to the DIY landlord market.”
“We are excited to be a part of NestEgg’s journey in bringing financial security and freedom to smaller, independent landlords across the nation,” he added.