The pandemic has made many reevaluate our relationship with our housing situations. In order to address this new reality, the rental market shifted to offerings that match the flexibility associated with remote working options for tenants. For landlords, flexible lease options allow them to capture much-needed revenue at a time when there’s been so much economic uncertainty. June Homes is a rental marketplace that specializes in flexible rental options across several cities in the US. Presently featuring apartments in NYC, DC, San Francisco, Los Angeles, Philadelphia, and Boston, the company offers leases ranging anywhere from 1-18 months, furnished or unfurnished, and either entire apartments or even just single rooms in shared situations. The company’s technology identifies apartments that would be well suited for its marketplace and is able to prepare the unit for rental in under three days. Tenants can move into their home in as little as three hours, once an apartment is listed; saving both the tenant and landlord time and money. In the last six months, June Homes has seen a 150% growth in the number of tenants as well as a 137% growth in the number of apartments listed.
AlleyWatch caught up with June Homes CEO and Founder Daniel Mishin to learn more about the need for flexible housing, the company’s strategic plans, latest round of funding, which brings the total funding raised to $50M, and much, much more.
Who were your investors and how much did you raise?
Our funding is led by SoftBank Ventures Asia with participation from TQ Ventures (founded by Scooter Braun, Schuster Tanger, and Andrew Marks), FJ Labs, K50, Reshape, Quiet Capital, and angel investors including Demi Lovato (musician and human rights activist) and Scott Belsky (founder of Behance). The $50M in equity financing includes a recently raised $27M Series B as well as a previously unannounced $13M Series A and $10M in seed funding.
Tell us about the product or service that June Homes offers.
The rental market is broken for both tenants and landlords, and June Homes provides a service that solves the problem for both parties. June Homes is a proptech startup that’s challenging outdated practices to improve the rental experience for tenants and small mom-and-pop landlords. Members can discover, apply, and move into their new home in as little as 3 hours, with no broker fees and fair market prices. On the landlord side, June is a turn-key partner that guarantees long-term building occupancy while decreasing their expenses.
What inspired the start of June Homes?
June Homes was started in 2017, after I experienced the challenge of apartment-hunting in NYC firsthand. Prohibitive costs, predatory fees, complicated requirements, long-term lease commitments—it seemed impossibly difficult to secure housing under these terms. I assumed the broken system was the landlords’ fault at first, but when I dug deeper, I found that a majority of these landlords are “mom and pops,” people who are 60-70 years old and have worked their entire life to buy this asset, and want to pass the property onto their children – and yet, they’re stuck dealing with high transaction fees, broker fees, management fees, and, anytime a tenant moves out, they’re the ones stuck with an (often last-minute) vacancy.
When I realized that the whole rental system is problematic for tenants and landlords, I felt that there just had to be a better way to do things. I created June Homes to remove all the friction in renting for the new generation of renters while helping landlords maintain their businesses and make money.
How is June Homes different?
Unlike typical short-term corporate housing companies that target large corporations and luxury travelers that upcharge tenants by up to 2x for flexibility, we are focusing on the everyday consumer, and our rental rates are more in line with the price range you’d expect to pay on a traditional lease.
June Homes is for those who want to make their space their home on their terms. Our homes are fully customizable — tenants can rent furnished or unfurnished, with roommates or by themselves, and have the option to stay for as long as they’d like (1-18 months) while paying fair and accessible prices in the price range of local rentals.
On the landlord side, June Homes has learned the lessons from the first wave of proptech startups that signed long-term master leases with owners and burned through VC cash. We have chosen a different strategy. Our algorithm offers landlords programmatically a range of different models depending on their building strategy and risk appetite. That allows June Homes to work with any type of landlord and properties, while also growing faster and remaining asset-light.
On the landlord side, June Homes has learned the lessons from the first wave of proptech startups that signed long-term master leases with owners and burned through VC cash. We have chosen a different strategy. Our algorithm offers landlords programmatically a range of different models depending on their building strategy and risk appetite. That allows June Homes to work with any type of landlord and properties, while also growing faster and remaining asset-light.
What market does June Homes target and how big is it?
June Homes plays within the $500B rental market, and June Homes targets both tenants and landlords. Since our founding, we’ve seen early success amongst millennials and Gen Z professionals who value ease, convenience, accessible pricing, and customization. June Homes is very appealing to a young audience in their early to mid-twenties, who are stepping out on their own for the first time. Our audience deserves a better option when it comes to housing, as a lot of them don’t want to be locked down with traditional 12-month leases but can’t afford to pay a premium for short-term housing.
In terms of landlords, our owners are often mom-and-pop landlords who own a small portfolio of buildings or small to midsize management companies.
What’s your business model?
We’ve built an algorithm that detects rental apartments with untapped potential and developed a tech-forward process to inspect, upgrade, renovate, and list units for rent in just under 72 hours. Once the apartments are listed on our site, tenants can discover, apply for, and move into their new home in as little as 3 hours. For landlords, our proprietary algorithm detects rental apartments with untapped potential (apartments that are often in disrepair). We then partner directly with landlords, guaranteeing fewer vacancies and eliminating high broker and management fees.
How has COVID-19 impacted the business??
Like for any other business, there was a lot of uncertainty at the beginning of the pandemic. However, we recovered our occupancy to 90% in less than 4 months and became operationally profitable by November 2020. We’ve experienced 2.5x in tenant growth quarter over quarter, and 2.5x in unit growth over the last six months.
What was the funding process like?
Raising the initial funding was seamless—in fact, before I even landed in SF we had our first check confirmed. At that time, the property tech was exciting, and within our first two weeks, we had raised $2.5M. Raising our most recent round during the pandemic was more difficult, as there were a lot of uncertainties in the back of investors’ minds. However, once we secured our lead check, the additional funds came together to total our $27M.
What are the biggest challenges that you faced while raising capital?
We put out 200+ pitches in a matter of one month, and endured lots of rejection. People were (understandably) cautious, but many were still open to conversations despite monetary losses.
What factors about your business led your investors to write the check?
Investors believe in our vision to become the world’s largest housing company without owning a single property. They understand and see the major tailwinds for our model right now and that we’re providing customers with exactly what they want in today’s world—flexibility, access, and convenience.
What are the milestones you plan to achieve in the next six months?
Most immediately, we’re planning to launch in additional cities across the country. Our vision is to become a global company, and we’re planning to launch overseas in the next 12-18 months.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
The advice we can offer is to try to de-risk yourself and your business as much as possible for an investor. Before you try to raise a single dollar, build a landing page, compile customer feedback, secure paperwork, and provide as much evidence as possible to show that there is a clear demand for your business – this should help you close the round.
What’s your favorite outdoor dining restaurant in NYC
My absolute favorite outdoor dining restaurant in NYC is Som Tum Der over in the East Village. They have the best Thai food.
