Nick Deveau of Grotto AI: 5 Questions

In February, Grotto AI announced a $10 million seed round to address multifamily housing vacancies, which reportedly cost owners $500 billion in lost property value.

Iconiq, an AI investment firm that co-led Anthropic’s $30 billion Series G funding round, led the Grotto AI round, making the proptech startup among the earliest-stage investments in the firm’s history. Advisers and angel investors included industry veterans David Dear of Bilt; Caren Maio, co-founder of both Get100 and Funnel Leasing; Avi Dorfman, co-founder at Compass; and Asymmetric Capital Partners.

Co-founded in 2025 by CEO Nick Deveau and Ben Epstein, Grotto AI’s proprietary platform, called Guidance, analyzes leasing interactions to identify revenue drivers for each property. It then delivers real-time coaching during calls and tours to reinforce those drivers, helping agents close lease deals.

Commercial Observer spoke with Deveau last week about how he and Epstein came to start Grotto AI, why it is growing so rapidly in its sector, and the challenges of finding top-quality engineers in the race to develop artificial intelligence.

This interview has been edited for length and clarity.

PropTech Insider: It’s estimated that $500 billion in property value will be lost due to vacant properties. Grotto AI raised a $10 million seed round to address that problem. How will you do that?

Nick Deveau: My background isn’t originally from the real estate world. It is from the data machine learning and AI world. I’ve spent my whole career building companies really focused on different industries to solve problems — in health care, insurance and hiring. 

Real estate was an industry in which I’ve always been interested. So I got connected with a few folks in multifamily, and just started asking some broad questions about the biggest problems in the industry. In every conversation the theme of vacancy loss came up.

Your startup has a proprietary AI platform called Guidance that analyzes leasing interactions to identify what you call the key revenue drivers for each property. How does it do that?

We’re specifically focused on human-to-human interaction calls and tours. We analyze our customers’ interactions through audio transcriptions of these. There’s often 12 months of recordings that exist. And we’ll go on site and actually record tours using a microphone. So we get all this information about what these interactions look like, and then we use AI — we have an incredible team of AI researchers — to learn what things the top performers are doing differently than median and bottom performers. 

We build something that we call a scorecard. It’s essentially a set of standard operating procedures based on the top performers. Then, for calls in real time, the AI nudges the agent taking the call to deploy those behaviors. So, if you’re taking the call and looking at your screen, there’s a sort of a heads-up display prompting you.

So, in effect, is Grotto teaching agents how to be more human?

It does certain things that only humans can do best today, which is to persuade and sell. AI today is not good at persuasion. It’s not good at selling. It’s not convincing. It’s not good at convincing people to do things. It’s really good at answering questions. Our stats around laughter and curiosity — all that stuff in selling — that’s a critical process that is fundamentally human, and we support those behaviors.

We have analyzed millions of leasing phone calls and we’ve seen this pattern. We said, “What are the things that the top-performing agents do?” Literally, whether that agent converts that prospect into a tour if they’re laughing on the phone. Agents are 48 percent more likely to convert if they’re leading with curiosity, and not fake curiosity, but about where this person is coming from and what their life story is. That’s where some of those stats come from. What are the individual components of a relationship and building rapport?

Are you finding agent acceptance and demand for this type of AI support?

Definitely. At the top level, we sell into the multifamily marketing leadership and operational leadership, and obviously there’s clear demand. They get it instantly. 

But I think the thing you just hit on is that we need adoption at the end-user level. That’s sort of our north star — increasing conversion and reducing vacant days. That’s what we care about, and the agents need to be doing the sort of things that we’re suggesting they do. There has been tons of adoption, because from the product design perspective, we spent a huge amount of time making sure that the product feels intuitive. We tested many iterations to make sure that the AI is not overwhelming, including things like iterating the length of our prompts so that they didn’t feel overwhelming in the conversation.

What’s the next step for Grotto AI? Will it replace agents at some point?

So, we closed the funding and we have really healthy demand. We want to keep growing, but the demand for engineering today is incredible. We have the best engineers I’ve ever worked with and better AI, but it changes at light speed. I think that the part of the business that is more resource intensive is the implementation side, rolling this out and getting it in the hands of customers, training people up, etc.  

And we spend a lot of time talking about how as software gets easier and easier to build, what is going to be a differentiator amongst vendors? I think it’s the strength of the relationship between us and our customer. It’s a resource-intensive thing. 

As for replacing agents, not at all based on the data we have right now. What’s really clear as we dive into the data is that humans have an edge. How much and where does the human edge matter? I think there’s tons of back office tasks and certain things that we definitely don’t need humans for. But what’s clear is that doubling down on humans in these moments that matter most — in the relationship-building moments and tours, those elements — is the smart business decision. 

And, when you think about it, the bottom-line impact is just selling more. So it’s just a smart business decision to focus on humans where they move the needle, and we know exactly where they move the needle.

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