Colton Pace of Ownwell: 5 Questions

Ownwell founder and CEO Colton Pace has built a successful proptech startup on a subject most of us never think about: appealing their property tax bill.

Last week, Pace’s company announced a $50 million Series B raise to support continued product development and the launch of its national property tax appeal offering. The company also announced the launch of its National Appeals Packet, an AI‑powered, ready‑to‑file appeal tool that it claims gives homeowners across the U.S. access to the tax information and expertise used by professional appeals teams — for free.

Austin-based Ownwell has now raised $74 million in total equity funding since its founding in 2020. Alpha Edison and Mercato Partners co-led its latest round, with participation from Intuit Ventures, Left Lane Capital, First Round Capital, Long Journey Ventures, Proof Fund and Wonder Ventures. Western Alliance Bank provided the $20 million in debt financing.

The rapidly expanding Ownwell has grown across a dozen states. It says it has facilitated more than 1 million property tax appeals and saved over $400 million for homeowners, while serving 200,000-plus first-time appeals customers in Texas alone.

Commercial Observer spoke with Pace last week about the greenfield he found in real estate and other properties’ tax appeals and management, as well as how Ownwell’s proprietary artificial intelligence aids in multiplying the effectiveness of the data from more than a million appeals on behalf of its clients.

This interview has been edited for length and clarity.

PropTech Insider: Congratulations on your latest funding. Why did you raise money now, and for what specific purpose?

Colton Pace: We went out and raised to help more people and to make a bigger impact. We started Ownwell six years ago to help democratize access to real estate expertise. To get to more geographies and customers, we needed more capital to market, educate, raise awareness of the company, and to build operations in new markets using three different levers: One, geographic, meaning operations in new geographies we’re not currently in. Property taxes and real estate are very specific by market. You need to have teams and local consultants for our property tax product in each of those markets. We’re in about 10 states and just opened in Colorado, Pennsylvania and Michigan, with about 10 new ones coming. 

Two, product expansion. We’re expanding into helping people with their insurance, mortgage, and utility bills, and helping customers with what we call our nationwide tax packet, a new product development.

Three, segment expansion into helping more and more small to medium businesses (SMBs). And, so, whether you own a franchise restaurant or a small strip mall or a gas station, we can help with that, in addition to your home.

What led you to found Ownwell? How did you know that homeowners and SMBs need help with tax appeals?

I had a finance background and I worked in investment management for the late billionaire Paul Allen’s family office business, Vulcan Capital. Seeing how billionaires manage their real estate and assets and optimize every expense is what led me to question my own expenses, my family’s expenses, those of my friends and beyond.

And, then, the question of can we build software to make it profitable and realistic for people to find the tools, tips, resources to manage their real estate with confidence and like a sophisticated investor? So we started Ownwell to bring those tools and build software for the largest asset class in the world, which is real estate. 

In creating Ownwell, did you find the open playing field you expected?

We ran surveys across different geographies, and there are lots of lawyers and tax consultants that serve people with $20 million, $50 million or $100 million properties. It makes a lot of sense for professional services firms to go after that. There are not many people servicing the $1 million home or $200,000 home or mobile homes. No lawyer wants to do that from a profitability perspective. We think less than 10 percent of homeowners across the country have ever done a property tax appeal. In commercial real estate, it’s much higher — closer to 50 percent. And, so, we have an absolutely greenfield opportunity.

Education and awareness is our first barrier to cross. We need to educate people that this is a thing. “You can save money. Here’s how it works. Here’s how you think about your tax assessment and whether or not you should push back or file an appeal to make sure you have those adequate exemptions.” There’s a lot of raising awareness in our marketing, rather than trying to convince people to switch. It’s mostly new customers for us who have never experienced what we do.

Is Ownwell designed just for single-family homes, or for co-ops and condos, too?

All of the above. Even real and personal property that is taxed. We work for $50 million industrial warehouses and for a ton of single-family homes, as well as for consumers that own one or two properties, but also customers who own thousands of properties. The types of software we’ve built leads to the best appeal and exemption standpoint for all of our clients. 

And we’re expanding rapidly to all kinds of real estate owners. I would love Ownwell to be synonymous with property expenses, where we help you manage all expenses associated with your home or real estate and make sure that you’re not overpaying.

Concerning Ownwell’s technology, you said that you are gathering vast amounts of data and have proprietary AI. How did you gather the data and how much of your AI is reflected in your tech stack?

Proprietary AI basically runs off the proprietary data. We are using the best foundational models on our proprietary data set and learnings that we have built over the last six years in the million appeals we filed. So we have many different data sources — private, public, and things we have homegrown ourselves. That data learning builds upon itself and says, “This is the best way to reduce property taxes, file exemptions and reduce your utilities in this geography, which is not the same as others.” 

After a million reps, we have this data set that helps us to help more and more customers with the learning that we’ve built internally. We track every aspect of the property tax appeal and how it went, testing over and over again. And there’s historical data out there. That’s where we started five years ago, but now that we’ve done it a million times.

As far as our AI being accepted legally in different states, we are very human in the loop-based product shop. Like government entities, we are dealing with tax data. We are dealing with your personal information to pull new insurance quotes. There is a human in the loop in every appeal and every exemption. It’s about how we get the best results and provide the best experience for our customers, whether that be talking to a real human or absolutely having a real human talking to the tax assessor on your behalf. We need that piece and will maintain it as we need to make sure there’s no hallucinations. The human in the loop isn’t going away in any near term, unless the government or the licensing requirements change. I don’t see any of that going away in the near future.

We’ve also just introduced our National Appeals Package, which is enabling new markets that we can’t get to fast enough with our AI and proprietary data set. So we are giving away this nationwide appeals packet for free in markets we can’t service yet. Using our internal, proprietary data set and the AI models that we’re working with, we are providing a free tool for property owners where we aren’t currently servicing to evaluate how to appeal their property taxes or manage their taxes and make sure they have the exemptions they should in new markets. This basically gives you, from our perspective, the best way to approach an appeal and exemptions in every market.

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