It’s estimated that 47% of commercial real estate deals fail due to issues that surface during the due diligence phase. Many surprises that are discovered post-transaction are the result of a poorly-designed due diligence process. ProDeal is a cloud-based due diligence platform that’s built specifically for the commercial real estate industry, founded by industry insiders, to facilitate and centralize the process that can be quite cumbersome based on the sophistication of the deal. Featuring the simplicity of popular productivity tools like Slack and Dropbox coupled with robust and automated workflows needed for commercial real estate transactions – large and small – ProDeal features virtual deal rooms that are secure and meet the needs of all stakeholders. In 2021 alone, the company supported 10,000+ deal rooms and has facilitated $70B transactions since 2017 for users like Silverstein Properties, 54 Madison Partners, EasyKnock, and Fortress.
AlleyWatch caught up with ProDeal COO Patrick Janson to learn more about the inspiration for the business, the company’s strategic plans, latest round of funding, which brings the total funding raised to $8.6M, and much, much more…
Who were your investors and how much did you raise?
We just closed $4M in our Seed 2 funding. The round was led by Pretium and Second Century Ventures, with participation from returning angel investors.
Tell us about the product or service that ProDeal offers.
ProDeal is commercial real estate’s premier cloud-native due diligence solution. We’ve been dubbed Dropbox for due diligence, but ProDeal goes beyond file-sharing: every feature, from our workflow management to our data storage to our security measures, was deliberately designed to facilitate fast, organized, and secure due diligence. ProDeal makes even the most complex cases easy to deal with through one simple, intuitive tool.
What inspired the start of ProDeal?
ProDeal was inspired by the experience of real estate veterans working on multiple transactions and losing huge amounts of time because everything was done via email and manually tracking PDF checklists. The old way of handling due diligence is messy, tedious, frustrating, and risky from a cybersecurity standpoint. ProDeal was made to take the headache out of due diligence.
How is ProDeal different?
ProDeal is the only proptech due diligence solution out there. There are lots of solutions available for the front office—from sophisticated CRMs to pipeline management tools—and products for managing assets, leasing, you name it. But when it came to the middle office, there was nothing to bring it into the 21st century. ProDeal changed that.
What market does ProDeal target and how big is it?
Commercial real estate is the world’s largest asset class. In 2020, Statista estimated the value of the global CRE market was approximately 32.6 trillion U.S. dollars. That’s a lot of dollars. The brilliant thing about ProDeal is that it’s applicable to every deal across every asset class—all of that market is fair game.
What’s your business model?
ProDeal is primarily, but not strictly, a SaaS business. We charge for user licenses, but we also have an API that allows users to build their tech on top of ours. For clients with simpler needs, we offer a transactional model where customers can use ProDeal for a specific transaction. For clients with more complex needs, we enhance our tech with transaction coordination services: a suite of services, from loan sales support to access coordination to project management, all enabled through ProDeal.
What are your post-COVID office plans??
ProDeal was always remote-first, even before COVID. Our employees are all over the world and we’ve worked hard to create a tight culture and a global presence. But we were founded in New York and we’ll always have a presence here. Real estate is a relationship business—we’re looking forward to getting back out there and being with our clients.
What was the funding process like?
Pretty smooth. We already had quite a bit of investor interest—proptech is a hot topic right now and there aren’t a lot of companies of our size with a client roster like ours. We gained a lot of additional exposure through the NAR REACH Commercial program, which was also how we were introduced to Second Century Ventures. And to close our capital raise, we used ProDeal, so that part was seamless and secure.
What are the biggest challenges that you faced while raising capital?
COVID broke the week our funding round was originally supposed to close. We had to put that on hold until we had a better understanding of how the market would be affected. We started back up in the summer of 2021. By then, people were more used to collaborating online and we were able to manage our capital raising process completely remotely.
What factors about your business led your investors to write the check?
Several factors. Market fit is one—our product is proven, with many enterprise clients happily championing ProDeal. Leadership is another—our team is stacked with software and real estate veterans, and in Andrew, our CEO, we’ve got an experienced leader with multiple billion-dollar exits under his belt.
What are the milestones you plan to achieve in the next six months?
We’ll be scaling up our engineering team under the leadership of our new CTO, and we’re actively hiring sales and marketing resources—anyone interested should drop by our website and check out our open roles. We’re also developing exciting new features and functionalities to enrich the user experience for our clients.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Time is money—and that’s a two-way equation. Without money, time becomes your most valuable resource. So it pays to be super focused on prioritization. We’ve run ProDeal as a resource-light environment for years because we cut through the noise to ask, every day, on what needs to be done to move the needle. Especially for New York startups, there’s so much fanfare around social media activity, events, conferences: things that seem like work but don’t add value. Allocate your time towards the things that grow your community or your revenue.
Time is money—and that’s a two-way equation. Without money, time becomes your most valuable resource. So it pays to be super focused on prioritization. We’ve run ProDeal as a resource-light environment for years because we cut through the noise to ask, every day, on what needs to be done to move the needle. Especially for New York startups, there’s so much fanfare around social media activity, events, conferences: things that seem like work but don’t add value. Allocate your time towards the things that grow your community or your revenue.
Where do you see the company going now over the near term?
ProDeal was founded with a vision to change commercial real estate by organizing, automating, and bringing insight to due diligence. With the number of clients using ProDeal, and the number and size of transactions that use ProDeal, we are pleased with our progress. In terms of product development, we’re always thinking about new ways to deliver more automation and innovation, so ProDeal can continue to be that valuable, invisible partner that’s always working, even when you’re not.
What’s your favorite outdoor dining restaurant in NYC?
Joe’s Pizza on Carmine Street. Enjoying a slice while sitting in the park at Father Demo Square is tops for me.
