Darwin Homes, a single-family rental property management startup, announced a $15M Series A funding on Monday.
Darwin Homes incorporates new proprietary property management software that allows owners and managers to take control over and scale their portfolios across different markets nationwide. The company tripled the number of homes it managed in 2020, and will use the funding to expand from Texas into Florida, Ohio, Tennessee, Colorado and North Carolina.
Investors for the round of funding included Canvas Ventures and Camber Creek, among others, along with contributions from Tony Xu at DoorDash, Ryan Graves at Uber, and Andrew Marks with TQ Ventures.
The company was co-founded by early DoorDash executives Ryan Broderick and Zachary Kinloch, who said Darwin Homes aims to marry high-quality local property managers with best-in-class software.
“Single-family rentals are among the most attractive yet untapped asset classes in the U.S. today, offering similar performance to the S&P 500 over the past 25 years with significantly less volatility,” Broderick said. “But, until now, managing these rental properties could be excruciating – greatly fragmented ownership struggling to find reliable property managers, and all parties dealing with a lack of trust and transparency in the fragmented industry.”
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Darwin Homes employs Origin as its management automation software, which streamlines accounting, leasing, inspections, maintenance, and repairs across an integrated platform.
Per data provided by Darwin Homes, single-family residential units are the largest segment of the rental market in the United States – with about 23 million units, representing 53% of the total rental market.
“When people invest in a single-family rental property, they don’t want a second job, but that’s often what they end up with,” said Kinloch. “Existing software were all closed ecosystems that created more challenges than they were designed to solve. Building our own property management software to work across all disciplines and locations enables Darwin Homes to lower the hurdles that hold people back from this fantastic asset class.”
Rent fluctuated across America in 2020 due to the economic turmoil brought on by the COVID-19 pandemic, and single-family units were no exception. By July, the annualized increase in rent had slowed to 1.7%, the smallest gain in nearly a decade, down from 2.9% a year ago, according to the CoreLogic Single-Family Rent Index.
Leading up to COVID-19, rent growth had stabilized at an annual average of 3%, according to CoreLogic data.