Proptech Startup Knock Secures $20M Funding - SaaS for Property Managers

Record Rentership Fuels Growth for Property Tech Startup Knock

The number of renters in the United States has reached its highest level since at least 1965, as indicated by a recent analysis of Census Bureau housing data conducted by the Pew Research Center.

Increased Competition Drives Tech Adoption

With heightened competition for rental properties, property managers are increasingly leveraging technology to gain a competitive advantage.

To address this growing demand, Knock, a Seattle-based startup specializing in tools for property management companies, has secured $20 million in a growth funding round.

Funding Details and Existing Investors

Fifth Wall Ventures led the financing round. Previous investors, including Madrona Venture Group, Lead Edge Capital, Second Avenue Partners, and Seven Peaks Ventures, also participated.

This latest funding brings the total capital raised by Knock to $47 million.

Founding and Early Insights

Knock was co-founded in 2014 by Demetri Themelis and Tom Petry, following their experiences renting in highly competitive markets like New York City, San Francisco, and Seattle.

Themelis noted that discussions with property management companies revealed significant gaps in their existing technology infrastructure.

Knock's CRM Solution for Property Management

Knock aims to modernize front office operations for property management companies by providing comprehensive CRM tools.

These tools enable features such as virtual tours and streamlined communication with renters through text, email, or social media, all managed from a unified interface.

For prospective renters, the platform offers a more convenient way to connect and interact with landlords.

Focus on Customer Acquisition and Retention

Themelis emphasized that, like most customer-focused businesses, apartment buildings compete to attract, convert, and retain renters.

For property management companies, these renters represent their primary customer base.

Rapid Revenue Growth and Market Penetration

Knock, operating on a SaaS business model, has experienced substantial growth, with revenue quadrupling over the past two years.

Its software is currently utilized by hundreds of the largest property management companies throughout the United States and Canada.

The platform supports over 1.5 million apartment units, serving clients such as Starwood Capital Group, ZRS, FPI, and Cushman & Wakefield (formerly Pinnacle).

All-in-One Sales and Communication Platform

Petry explained that Knock functions as a centralized hub for sales activities.

It integrates chat, SMS, phone, and email communication, along with a sales calendar and CRM system.

The platform also automates tasks like outreach and appointment scheduling, while prioritizing sales opportunities for both new leases and renewals.

Preparedness for the COVID-19 Pandemic

Themelis stated that the company was well-positioned to navigate the challenges presented by the COVID-19 pandemic.

Knock’s software supports property management companies operating high-density apartment buildings, which remained essential even during lockdowns.

Adapting to Remote Leasing

During the initial lockdowns, in-person property tours decreased by approximately 80% within weeks.

Knock facilitated a transition to a centralized and remote leasing model, enabling agents to manage properties remotely rather than being confined to on-site leasing offices, as Petry highlighted.

The company also supported the adoption of self-guided, virtual, and live video-based tours, providing renters with alternative ways to view properties.

Positive Business Impact in 2020

Petry noted that this transformation proved to be a significant catalyst for Knock’s business in 2020.

The company achieved record results in terms of new customer acquisition, revenue growth, and revenue retention.

Furthermore, Knock’s clients outperformed market averages in both occupancy and rent growth.

Future Plans and Expansion

Knock intends to allocate its new capital towards expanding its teams across product, engineering, sales, marketing, customer success, finance, and human resources.

The company anticipates a headcount increase of 40% to 50% before the end of the year.

Plans also include expanding its product portfolio to incorporate AI-powered communications, fraud prevention, applicant screening, leasing tools, and intelligent forecasting.

Industry Validation and Investment Rationale

Vik Chawla, a partner at Fifth Wall, will be joining Knock’s board of directors.

Chawla pointed out that the current macroeconomic environment is driving increased institutional investment into multifamily real estate, making Knock’s offering particularly relevant.

Competitive Advantage and Team Expertise

Chawla believes that Knock surpasses its competitors in terms of product quality, technical capabilities, and overall functionality.

He emphasized the team’s success in attracting top-tier product design and engineering talent to address a complex challenge in the tenant acquisition process.

Strategic Alignment with Fifth Wall’s Investment Thesis

Chawla explained that companies like Knock align with Fifth Wall’s investment strategy.

Knock can benefit from Fifth Wall’s network of corporate strategic partners and serve as a valuable solution for real estate industry leaders in various countries.