Spend Management Platform Banner Raises $10 Million Series A Round

Investors bet on proptech startup’s capex platform for institutional real estate owners and developers

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Investor interest in proptech startups servicing real estate owners and developers notched another data point Tuesday, as Banner announced that it has closed a $10 million Series A funding to expand its capital expense (capex) platform for institutional real estate owners and developers.

Blackstone Innovations Investments, Pruven Capital, Fifth Wall, Basis Set Ventures and Y Combinator participated in the round. Banner plans to use the funding to expand into new markets and launch products as well as to grow its team, including in research and design. The latest round brings the total capital raised by Banner to date to $13 million.

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Co-founded by Mark Murphy and Kunal Chaudhary in 2019, Manhattan-based Banner provides institutional real estate owners with visibility into portfolio- and property-level capex spending.

“There’s about a trillion dollars a month in the U.S. that goes into real estate development, and the vast majority of that spend is tracked and managed in Excel workbooks,” said Murphy, CEO of Banner. “That’s a lot of manual data entry, incorrect information, a lack of organization generally that leads to additional expense. Banner manages the entire capital process — everything from creating budgets to bidding out projects, tracking project schedules, contracting, invoicing, and everything in between.”

Banner uses optical character recognition to gather and clean information from developers’ spreadsheets, Murphy said.

“The big uptick over Excel is you get real-time integration with the accounting system,” he explained. “It automatically reconciles with Yardi, MRI Software, Entrata, or whatever your accounting system is, which saves a lot of time. We scrape off that pertinent information and stage it in our software, and then the workflows that we have get you out of email and into a streamlined process for anything that involves a capex expense.”

Banner’s prime focus has been on the multifamily space, including clients LivCor, Starwood, Morgan Properties, April Housing, Harbor Group, and Industrious, and others.

“Our sales effort is going to focus on getting broader adoption in the multifamily industry where we’ve made a good name, and then expanding to other verticals like office, retail and industrial, where we have a smaller client base,” said Murphy.

Among Banner’s funders, an institutional real estate investor and a proptech venture capital firm see current and future growth opportunities for the startup.

“We are excited to partner with Banner to drive continued growth,” said John Fitzpatrick, chief technical officer of alternative asset management technology at Blackstone. “We’ve been able to see firsthand the value that the platform drives to real estate owners undertaking a significant volume of capex projects to make their properties better. Mark and Kunal are relentlessly focused on driving value for their customers, and we’re looking forward to helping them further expand into new markets and to broaden their product offering.”

As a partner at Fifth Wall who co-leads the early-stage real estate technology venture fund, Sarah Liu also sees future applications for Banner’s platform.

“We really like the fact that Mark is building something that is applicable across asset classes and is applicable in both new construction as well as existing developments,” said Liu. “Banner is essentially building a true construction capex management tool that can be used across our entire base of 110-plus [limited partners].”

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