Toronto-based RealSage, which sells artificial intelligence (AI)-powered data intelligence software to help multi-family rental housing asset managers operate more efficiently, has secured $5.5 million CAD ($4 million USD) in seed funding.
The proptech startup intends to use this funding to fuel its continued United States (US) expansion and product development efforts. In an interview with BetaKit, RealSage co-founder and CEO Arunabh Dastidar claimed the startup has seen strong early signs of product-market fit and that the timing is optimal for RealSage to invest in growth south of the border.
“Everyone is looking at data in a very, very different way.”
Arunabh Dastidar, RealSage
A year ago, RealSage had just closed $2.1 million CAD in pre-seed funding, and the company’s focus was on educating the real estate industry about the need for data-driven decision-making platforms like the one it had built. These days, as market conditions have remained tough, Dastidar claimed that RealSage’s platform has become an easier sell.
“It’s not 2017 anymore, where real estate companies are throwing money out of the window and still making a lot of money,” said Dastidar. “Now, there’s this [high] interest rate environment with stricter policy guidelines, regulations, [and] movement towards sustainability. Everyone is looking at data in a very, very different way.”
Founded in 2019 by Dastidar, Gaurav Madani, and Zain Nathoo and formerly known as SoulRooms, RealSage is led by folks with experience in real estate, banking, and tech. The company has focused on multi-family rental housing providers to date, but over time, it intends to expand into other segments of the real estate market.
With the help of AI and predictive analytics, RealSage claims its software can help clients analyze market trends, improve tenant selection, optimize unit pricing, predict occupancy rates, and reduce vacancies, among other things.
RealSage’s all-equity, all-primary seed round closed last month and was financed primarily by American investors. The financing was led by York IE with support from Karman Ventures (which is backed by early Uber employees), proptech-focused Stellifi VC, Golden Section, former Facebook employees, and real estate family offices in New York and Toronto.
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The round, which also saw participation from existing backers, including Second Century Ventures, the strategic investment arm of the US National Association of Realtors, brings RealSage’s total funding to $7.6 million. Dastidar declined to disclose the firm’s valuation.
“RealSage’s approach to transforming real estate through AI and data analytics is exactly what the industry needs to advance,” York IE vice president of investments and strategy Marshall Everson said in a statement. “We are excited to back a team that brings the necessary combination of industry and AI experience to pave the way for a new era of data-driven and predictive real estate decision-making.”
As the real estate industry has become more aligned with the value proposition of players like RealSage, Dastidar noted that some competitors have emerged, but he believes that RealSage’s team and the maturity of its product differentiate the company from other upstarts.
Currently, 70 percent of RealSage’s customers are based in Canada, and 30 percent are located in the US. Dastidar hopes to flip that breakdown over the next year by adding new US clients and expanding with its existing customers, which include Drewlo Holdings, Oxford Properties, Harrington Housing, and Dastidar’s former employer, Zahra Properties. To do this, RealSage plans to grow its team and invest some of the round’s proceeds into sales and marketing.
Feature image courtesy RealSage.