June Homes’ Algorithm-Based Apartment Rental Platform Raises $50M
Platform enables residents to discover, apply for, and move into their new home in as little as three hours.
PropTech company June Homes, which uses algorithm technology to assist mom-and-pop owners and apartment residents find economically viable rental matches, announced this week that it has raised $50 million in total funding.
The funding is led by SoftBank Ventures Asia with participation from TQ Ventures (founded by Schuster Tanger, Scooter Braun, and Andrew Marks), FJ Labs, K50, Reshape, Quiet Capital, and angel investors, including musician Demi Lovato and Scott Belsky (founder of Behance).
The $50M in equity financing includes a recently raised $27M Series B as well as a previously unannounced $13M Series A and $10M in seed funding. Capital will be used to fuel the company’s expansion to other U.S. markets and further its mission to create a more fair, transparent, and efficient real estate system.
Company in Six Large Markets
June Homes Founder Daniel Mishin tells GlobeSt that his 4-year-old company operates approximately 1,600 apartment homes in six major markets – New York, Boston, San Francisco, Los Angeles, Washington, D.C., and Philadelphia.
His business proposition to landlords is to use his proprietary algorithm to study a market and prospective renters and enable both to bypass the broker fees and other up-front costs in a simpler process. June Homes’ renters can discover, apply for, and move into their new home in as little as three hours, Mishin said.
June Homes has experienced 2.5x in tenant growth quarter over quarter, and 2.5x in unit growth over the past six months.
He said his system has helped reduce the time on market for vacant apartments from 75 days to 7. 5 days, based on July 2020 performance. The homes are fully customizable — tenants can rent furnished or unfurnished or include roommates.
June Homes handles the leasing, rent payment and landlord communications over any issues. Apartment owners can choose to have June Homes manage the apartment homes or continue to use their current management company.
The company has 25.5x less tenant defaults than industry average. Should a tenant default, June Homes will pay the remaining months’ rent on the lease as it seeks to find a new renter.
June Home renters can opt for variable lease terms from one month to 18 months. During their first seven days in the unit, if they are not happy, they will not be charged rent and can more to another June Homes apartment with no charge in moving costs. June Homes will rent an entire apartment, or seek three different people who wish to rent, for example, within a 3-BR apartment.
Owners Choose Their Own Risk Level
Owners can choose how much risk they want to have in the strategy, Mishin said, by either sharing a percentage of the rent collected or by paying a management fee.
The company’s algorithm detects apartments with untapped potential (often in disrepair) and has developed a process to inspect, upgrade, renovate, and list units for rent in just under 72 hours.
“Innovation in the rental market is long overdue, and we believe that June Homes’ modern approach will solve major pain points for both tenants and landlords,” said Sherman Li, Partner at SoftBank Ventures Asia and June Homes board member.
“June Homes lives at the intersection of a few trends that have lasting effects – broken rental system, hybrid/remote workforce, and a challenging housing market. We’ve watched the June Homes team tackle problems in the space and redefine the market by providing more efficient and reliable services.”