The News: Seattle startup Picket Homes raised $20 million to boost development of its platform that helps investors analyze, purchase and manage single-family rental properties.
The Product: Picket Homes’ platform features more than 50 million US single-family properties in 25 rental markets. Using machine-trained models and data, it helps investors sift through real estate property listings. The platform provides reports that forecast sale/rental values, expenses, cash flow, and long-term asset appreciation. It also facilitates transactions.
When investors purchase a property, their assets move to Picket’s property management system. The platform offers digital leasing, smart home tech, online bill pay and maintenance requests. It also provides access to a service team and mobile app for residents.
Leadership: The company was launched in 2019 by co-founder and CEO Quinten “Q” Shay. He previously served as the co-CEO of Ador, the well-funded Seattle e-commerce startup originally known as Lockerz, which was acquired by Chinese holding company LightInTheBox in 2014. Shay also held leadership positions in Amazon’s international and tech teams, working for more than six years with the e-commerce giant.
Shay is joined by co-founder and president Henchman LeMaistre, who launched tech-focused property management firm Elara, and co-founder and CPO Charlie Mullan, who helped launch influencer affiliate marketing startup Spangle. Picket has more than 100 employees.
Funders: The Series B financing round was led by LL Funds. It included participation from RET Ventures, which led Picket’s Series A round in 2022. The company did not disclose its total funding to date.
Traction: Picket facilitated more than $270 million in single-family rental home investments last year, primarily with institutional customers. The company said it plans to expand by targeting individual investors.
Picket said purchases on the platform have been concentrated in the Southeast. However, the company added that it’s “rapidly expanding” in the Southwest, Midwest, and Northeast.
The startup generates revenue through its software platform and brokerage and property management services. It said its investor pool has “grown rapidly” in the last 18 months, and its tech and property management services serve “thousands of residents.”
Pushback: Real estate investing companies have faced criticism in the past. Critics argue their business models help investors gobble up the limited amount of available housing, driving up costs and outbidding first-time home buyers.
Asked about these concerns, a spokesperson pointed to data released last week from John Burns Research and Consulting that shows the cost disparity between owning and renting has risen to an average of $1,030 per month, compared to $884 a year ago. The spokesperson added that its broader mission is to help renters have better rental experiences, driven by its resident mobile app and services team.
“When people want or need to rent a home, we want them to have more and better options,” the company said in an email. “We believe that only by facilitating the acquisition and management of rental properties at scale can we have a meaningful influence over the quality of supply.”
Competition: Several real estate investing startups focus on single-family homes. Seattle-based Havium sells a platform for identifying and managing rental properties, while Arrived Homes allows investors to purchase fractional shares of rental properties.
Real estate market: Picket’s funding comes as higher interest rates have weakened investor appetite for buying homes. Investors purchased nearly 49% fewer properties in the first quarter of 2023 than the year-ago period, according to a report by Redfin. The share of single-family home purchases dropped to 67.3% of investor purchases, the lowest share in the past six years, the report found.
There are also fewer homes for sale. The US housing market was short 6.5 million homes between 2012 to 2022, CNN Business reported. As of April, the monthly supply of homes on the market would last 7.6 months if no new houses were built, according to Federal Reserve data.
