Historic Shift From Buying to Renting Spurs RentSpree’s $17.3 Million Series B

RentSpree will use the new funding to expand product offerings for renters and agents, as well as to secure additional strategic partnerships, as the company continues to ride the growing wave of renters nationwide, said Michael Lucarelli, CEO and co-founder of RentSpree.

“A lot of the growth that we see in rentals has already been occurring and been in motion for the past couple of decades,” Lucarelli said. “I think it was last year that Zillow came out with a report that mentions the median age of the first-time homebuyer is about 36 years old. And this is before what we’re seeing now with the rising interest rates.

“So it was already becoming more and more challenging for someone to buy a home. It’s likely to continue on that track and maybe even become more difficult, pushing that age of the first-time homebuyer older.”

RentSpree’s strategy has focused on addressing the small rental landlord market, rather than the large institutional owners.

“When most people think about rentals, they generally default a little bit to thinking about large institutional multifamily, multimillion-dollar management companies with hundreds or thousands of units,” said Lucarelli. “But those large institutional management companies only account for roughly 50 percent of the rental units in the U.S. For those large institutional management companies, it is a very competitive market. There’s a laundry list of companies that may provide technology to them, whether it’s Yardie, AppFolio, RealPage, MRI, and the list goes on and on.”

Instead, RentSpree focuses on the market’s other half, what it calls “mom and pop” landlords.

“When you think about that segment of the market, it’s roughly the equivalent of the large multifamily segment, which supports multiple-billion dollar companies,” said Lucarelli. “There’s actually not that many companies that can effectively serve, and that you can think of as a household name, that provide technology for these long-tail landlords.”

Founded in 2016, the Sherman Oaks, Calif.-based RentSpree started working with the CAR and the California Regional Multiple Listing Service the following year, Lucarelli said.

“At our core, we strive to create much more of an equal playing field with the stakeholders that are involved, which can include renters, landlords, and agents that work with rentals,” said Lucarelli. “These are the three groups that we look at and we are making sure that the renter has more of an equal footing.”

RentSpree’s software platform attempts to make the rental application and qualification process easier for renters, he said, adding: “Our goal over the next 24 months is to have 30 percent-plus of all active U.S. agents leveraging RentSpree, and, together, we will assist millions of rental clients annually.”

The proptech startup has partnered with more than 250 MLSs, real estate associations, and brokerages, with more than a million users in the U.S. The company was ranked 625th on Inc. 5000’s list of fastest-growing private companies in 2022.

“We recognized a marked shift toward renting that has been years in the making,” says Michael Walsh, general partner at green visor capital. “That transformation has only accelerated over the last 24 months. RentSpree is well-poised to continue leading the industry through these changing dynamics due to its partnerships, product innovation and momentum.”

Philip Russo can be reached at prusso@commercialobserver.com.