Read the press release here.
Recent reports of a dying herd of unicorns in Silicon Valley highlight the tech industry and its venture capital bicep in a squeeze for 2016. Investment in startups was down 35% YoY in Q4 of 2015 and valuations have been slashed at companies like Dropbox, Zenefits, and Snapchat. This sounds dark, but it’s part of a larger transformation that could ultimately result in a positive outcome. Competition has increased for series A and B financing, however the available funds have not.
To accommodate for escalating competition in the series A funnel, companies like OneRent are facing intensified scrutiny on unit economics and the framework for a sustainable growth model. Less weight rides on an idea, the what-if possibilities of your product or service, and its flashy app. Venture Capitalists are going after teams and technology that solve hard-hitting social issues and can successfully address these larger, more complex problems.
As one advisor wisely said:
“VCs are now using their brain more than their imagination.”
Technology is moving out of Silicon Valley, spreading ripe talent across many new cities around the world. Startups across all industries are embracing a technology-first approach, paving the path for small businesses to scale with affordable and accessible infrastructure. The downside of this transformation and the “tech bubble crunch” means more companies are raising seed rounds (which is generally a more flexible, fluid source of capital) and thus competition for series A or B financing has increased.
However, some companies are making it through those layers of competition just fine. So what are the key differentiators for the ones that succeed? The answer is, of course, not simple. But there are a few factors that can help investors reach for their checkbooks.
- A simple, repeatable model with an infrastructure that’s easy to set-up, deploy and subsequently scale. Investors want to see an innovative business model that’s making an impact with a larger audience and capable of reaching corners of its specific industry that has not yet been served.
- An opportunity that taps a market ripe for change. For example, at OneRent we recently took $4M to lead the transformation in a 50-year old property management industry in which we’ll be solving many key problems on both sides of the value chain.
- Deliver a POC that solves a real problem. Customers come to OneRent to solve problems related to some of the most important aspects of their lives. For property owners, it’s their investment property and often, their most valuable asset. For renters, they want an easy and quick way to find somewhere to call home, where they can raise a family or start a career and not have to worry about any of the hassles of being a renter.
Setting a new standard in any industry is no small feat, but there’s light at the end of the tunnel with a strategic approach. OneRent is leading the charge in disrupting the real estate space with a new model that both sides of the rental engagement have needed for years: a seamless, unified and transparent experience. In less than a year, OneRent has built a portfolio of more than $500M and will continue that strong trajectory of growth in 2016. The new round of funding will back the expansion of our scalable business model into several new, high-demand cities including: Los Angeles, San Diego, Portland, Washington, D.C., Boston and Sacramento. We’re serving landlords and real estate investors from all around the world, and this is just the beginning of our path to overhaul long-term renting as we know it.
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