Commercial Observer — Funnel Leasing Raises $32 Million in Series B2 Funding
Software platform for multifamily property managers looks to expand sales
BY PHILIP RUSSO OCTOBER 30, 2023 9:00 AM
In the dynamic multifamily rental sector, investors have placed a big bet on Funnel Leasing, a software platform for property managers, which announced Monday that it had raised $32 million in what it is calling a Series B2 round.
RET Ventures led the round, with Trinity Partners and a group of multifamily owner-operator co-investors participating, according to Funnel, whose software offers customer relationship management, a virtual leasing agent, online leasing, onboarding, and a portal for communicating with residents.
The 14-year-old Tampa-based company plans to use the funding to further market its centralized property management software platform.
“Funnel was initially just prospect-focused,” said Tyler Christiansen, CEO at Funnel. “With the initial funding in the Series B we built the products for residents. Now the B2 round is allowing us to build a sales organization to sell those products to our customers, property managers.”
“Funnel was initially just prospect-focused, with the initial funding in the Series B we built the products for residents.”
— Tyler Christiansen, CEO, Funnel
Johnny Hanna, a multifamily veteran and a co-founder of property management platform Entrata and sales portal Homie, was recently added to Funnel’s leadership to lead the expansion of its sales team, said Christiansen.
“The market demand for centralized tools remains a very big topic in the industry as well as, obviously, AI automation,” added Christiansen. “Centralized leasing exists in Funnel, but we will be adding centralized administration. In short, sales and marketing, and depth of functionality, but no new products per se.”
“The market demand for centralized tools remains a very big topic in the industry as well as, obviously, AI automation. Centralized leasing exists in Funnel, but we will be adding centralized administration. In short, sales and marketing, and depth of functionality, but no new products per se.”
— Tyler Christiansen, CEO at Funnel.
As the apartment market continues to evolve, rent increases have begun to slow and operators are looking to improve efficiencies, John Helm, founder and partner at RET Ventures, said in a statement. RET works with its base of more than 50 investors who own and manage more than $600 billion of real estate assets, with a particular focus on multifamily and single-family rentals.
“We expect their industry adoption to continue to accelerate,” Helm said of Funnel. “Our conversations with our strategic investors point to the need for a streamlined, centralized operating model that leverages automation to reduce costs for multifamily operators, while improving the customer experience.
“With [Funnel’s] completed platform, owners and operators no longer need to use antiquated software to manage their renter journeys, and can now graduate to a modern platform architected around how owners, teams, and renters behave today.”
Funnel’s renter management software platform is designed to give property management companies of all sizes — from large REITs to privately owned and third-party-managed companies — the flexibility to reorganize their operating model and prioritize teams’ task lists so that high-value items are completed first, the company said. Teams can focus on their most valuable follow-up, trusting AI and automation to handle rote tasks.
Unlike competing property management software companies such as RealPage and Yardi, which were built to run operations at a single property and don’t allow for centralized operations, Funnel says it’s built to operate across multiple assets, said Christiansen.
“The challenge for operators is that the average rent growth — year-over-year rent replacement — is flat,” he said. “They’re not getting rent increases anymore, whereas previously they were seeing 15 to 20 percent. That’s not good or sustainable, because their costs are going up 10 to 20 percent, labor is still in short supply, and debt and insurance are more expensive.”