The shortage of affordable housing is reaching crisis proportions across the country where many individuals are spending more than fifty percent of their income to secure housing. While new housing starts continue to increase, developers have traditionally opted to shy away from the affordable housing market and the associated regulatory requirements to focus on more lucrative opportunities. Pronto Housing is an end-to-end SaaS platform that manages the affordable housing compliance process, relieving property owners of the administrative responsibilities. By reducing the burden with technology, affordable housing projects become more economically viable, and in turn, this leads to an increase in the supply of affordable homes for those that are at risk of housing instability. By streamlining the process for property developers, they are able to take advantage of the many affordable housing development programs offered by the federal government and local government agencies. With Pronto, property owners can reduce the time spent on compliance by 5x. For residents, their annual certifications and application process is also optimized. The company, in beta, already works with a number of property owners that manage over 2000 units.
AlleyWatch caught up with Pronto Housing CEO and Cofounder Christine Wendell to learn more about how technology can drive the creation of affordable housing, the company’s strategic plans, recent round of funding, and much, much more.
Who were your investors and how much did you raise?
Pronto Housing’s lead investor is Wilshire Lane Partners, a LA-based venture capital firm focused on early-stage PropTech startups, and rounded out by Nine Four Ventures, Essence Development, led by former NFL player and Vice President of Related, Jamar Adams, Lemor Development Group, principles of Housing Trust Group, and notable early-stage tech investor and advisor Sara Shank. Pronto Housing raised $2.5M. This marks Pronto Housing’s seed funding round.
Tell us about the product or service that Pronto Housing offers.
Pronto Housing is the first and only off-the-shelf affordable housing compliance Software-as-a-Service (SaaS) platform, ensuring that a higher quality of living is accessible for the more than 11 million Americans who are continually facing housing instability, while enabling property owners to meet their financial goals. Whether it is amid initial lease-up or annual compliance, owners and renters alike have historically faced slow and painful processes rife with uncertainty and risk. Pronto Housing is laser-focused on ensuring a quick and easy process for both sides of the equation. By automating the application and annual recertification process for US affordable housing programs, Pronto Housing reduces this friction, automating manual data entry, and increasing transparency for asset managers and renters.
What inspired the start of Pronto Housing?
I’ve known KC Crosby (cofounder) since our early days in New York City’s real estate scene. I most recently worked in asset management and acquisitions at Megalith Capital Management and KC owned and operated a hospitality business in the Caribbean, before which she was in New York with Spear Street Capital. A mutual acquaintance in the industry introduced us back in 2016, and we became fast friends and industry peers, bouncing ideas off of each other throughout the years. During the affordable lease-up process, I noticed time and time again pitfalls, inefficiencies, and lack of transparency in the traditional process. I reached out to KC to partner in creating the solution to this problem, marking the inception of Pronto.
How is Pronto Housing different?
Pronto Housing is the first and only off-the-shelf affordable housing SaaS platform. While there are large property management software companies that dedicate a portion of their software offering to limited affordable housing functionality, none provide the end-to-end solution found in Pronto’s platform. Pronto’s Platform guides renters and property managers through the affordable housing application process, reducing the time that it takes for renters to qualify for an apartment. As the only end-to-end provider laser-focused on the space, with key investors and leading asset managers onboard, we are well-positioned to become the go-to software in this space.
What market does Pronto Housing target and how big is it?
The US affordable housing market is a nearly trillion-dollar market, with an estimated $3B spent annually on compliance alone. There are over 5M federally publicly supported rental units, and an estimated 5M additional units created by local zoning and affordable housing programs, which often follow the federal compliance processes. Amid COVID-19, nearly one in five renters are not caught up on rent, with renters of color facing the greatest hardship. President Biden aims to invest $640B in housing in the next 10 years.
What’s your business model?
Business to business, selling our SaaS platform to property owners and property management companies, with asset managers and renters as the end-users.
What are your post-COVID office plans?
Our market-leading team currently consists of ten full-time employees split between our headquarters in Manhattan, in addition to our engineering team primarily in Guadalajara, Mexico. We value flexibility including WFH, in addition to in-person time. As an early-stage startup, we are investing the time and effort now to build our product, processes, team, and culture, ensuring that as we grow strategically and rapidly, our team feels connected to our identity & to the role that they play in it. This is allowing us to set the foundation needed for even more flexibility in the future.
What was the funding process like?
We have been fortunate to find investors who believe in our vision of bringing innovation to affordable housing, and are aligned in our core values — efficient, intuitive, and inclusive. Wilshire Lane led the round, with Adam Demuyakor joining our board. Given this was our first round of funding, there was a lot of trial and error to find investors who understood the massive market opportunity of affordable housing software, and aligned with our vision for how to grow that business. For our next round of funding, we are focused on investors with experience helping companies scale software, as well as additional strategic investors with affordable housing ties.
What are the biggest challenges that you faced while raising capital?
Post-COVID-19, the PropTech market boomed, as a multitude of existing trends in the real estate market were expedited as the real estate industry aimed to not only remain afloat but competitive. In many ways, this saturated the marketplace, with an abundance of technology companies seeking venture capital. By far the biggest challenge in today’s climate is setting yourself apart from the rest. We benefited from solving an undeniable need in the marketplace, with no comparable competition, and a massive value proposition.
What factors about your business led your investors to write the check?
Pronto Housing’s software and services are focused on providing a key, long-lasting solution to a critical national problem – the housing crisis – an essential offering investors jumped at. Safe and stable housing is the foundation for people to engage with their community. The Pronto platform allows owners to lease up affordable units faster, so units don’t sit vacant. The traditional application and recertification process (also known as “affordable housing compliance”) is manual, confusing, and inefficient, often requiring applicants to take time off of work to meet in person and gather documentation. The Pronto platform allows applicants to submit on their own time, or add a helper. Improving the compliance process for affordable housing with the Pronto platform allows today’s renters to obtain secure housing, while helping property owners save time and money. Property owners are required to complete this process, so there is a clear market need, and Pronto offers a better way.
What are the milestones you plan to achieve in the next six months?
Over the next six months, we are hyper-focused on utilizing funds from our seed funding round to continue to build out our state-of-the-art platform and recruit top talent to support our growth and create a heightened level of service to users. Pronto aims to be available to the larger US market post its series A round – we are anticipating starting to raise in 2022.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Investors are far more than a financial commitment — they are partners in achieving your mission and you should be extraordinarily conscious of selecting them through this lens. For starters, ask yourself if they hold your same near-term and long-term vision for the company; if they are someone you would seek input from on a consistent day-to-day basis and do you share similar values; and if they represent someone you’d want out in the market speaking on behalf of the brand. If you can answer yes – you are on good footing to obtain unlimited value.
Investors are far more than a financial commitment — they are partners in achieving your mission and you should be extraordinarily conscious of selecting them through this lens. For starters, ask yourself if they hold your same near-term and long-term vision for the company; if they are someone you would seek input from on a consistent day-to-day basis and do you share similar values; and if they represent someone you’d want out in the market speaking on behalf of the brand. If you can answer yes – you are on good footing to obtain unlimited value.
What’s your favorite outdoor dining restaurant in NYC?
Anything on Stone Street (walking distance from Pronto’s office) is always a good time!
