Rental homeownership startup Doorvest has raised a total of $39 million in a new funding round, the company announced on Thursday.
The startup, which helps consumers buy and manage rental properties, netted $14 million in equity financing and a $25 million credit facility. The funding round was led by M13, with participation from Mucker Capital, Gaingels and individual investors, including Opendoor Chief Product Officer Tom Willerer and Founder of Invitation Homes Marcus Ridgway.
“For most people, the obstacles to owning a rental home — a high down payment, geographic limitations, finding and keeping residents and maintaining the home — are insurmountable,” Brent Murri, M13 Principal, said in a statement. “Doorvest’s full-service solution removes these barriers by handling the end-to-end experience for its customers, from finding the home to renting it out. In doing so, the company has democratized access to one of the most stable asset classes in the U.S. — single family rentals.”
Through its end-to-end real estate investment platform, Doorvest helps consumers select a home to invest in (knowing that individual’s financial circumstances), the consumer places a deposit on the home, Doorvest purchases the home on their behalf, and then conducts repairs to the property.
Then, the individual investor buys the home from Doorvest (typically, with a mortgage) and Doorvest manages the property for a 10 percent fee from the property’s rental income. The company also takes a 5 percent commission fee from the property’s final sales price.
Andrew Luong
The funding round will help the company add on more hires, expand into new Sun Belt markets and invest in its product and technology. With this latest round, Doorvest will have raised a total of $17.5 million in equity, in addition to its $25 million in working capital, building off its $2.5 million in seed funding raised about eight months ago.
Doorvest’s consumer demand has increased 15-fold since it first started selling to customers in April 2020, according to a statement, and the company now has 30 full-time employees.
“We’re eager to put this new funding to work and build our team with good humans who are energetic about our mission to advance financial security for all,” Andrew Luong, CEO and co-founder of Doorvest, said in a statement. “Unlocking homeownership for the average American continues to motivate our growth and we’re proud to say that 70 percent of our customers are first-time homeowners.”
The company also announced that it is launching a selling arm to its platform, whereby anyone can sell their property to the company at any condition. The service is currently available in the state of Texas and in Atlanta.
