London-based startup Dwelly, which buys property management firms and automates their operations with artificial intelligence (AI), is currently negotiating around $200m in combined equity and debt financing.
General Catalyst, which led the company’s previous funding round, is projected to participate.
Dwelly has previously raised £32m in equity and £37m in debt in February, when it managed over 10,000 properties across ten acquired leasing agents. The firm was founded by previous executives from Uber Technologies and Gett.
Dwelly is an emerging category of rollup companies that acquire fragmented operators in low-margin industries and implement AI to increase profitability and scale.
Other examples of recent rollups include General Catalyst portfolio company Long Lake’s $6.3bn acquisition of Global Business Travel Group and Thrive Holdings’ $10m investment in Shield Technology Partners, who consolidates IT service firms.
Investors see prospects in deploying AI in operationally dense sectors such as legal services, accounting, construction and real estate management. Dwelly automates tenant communications, property maintenance requests, and rent collection, causing a reduction in the manual workload in traditional property management.
Previous PropTech ventures focused on consumer-facing marketplaces and search platforms, however companies like Dwelly are betting that back-office automation offers larger returns.
Property management appears to be fragmented, labour-intensive business in most markets, with small operators addressing collections, repairs and tenant screenings manually. AI tools which can streamline these functions could reduce operating costs and attract institutional buyers seeking programmatic acquisition targets.
If Dwelly closes the round, they are expected to test whether capital markets value technology-enabled consolidation works in property services as highly as they do software-only models.
