Cozy, a startup trying to take a lot of the headache out of the landlord-tenant relationship, has raised $1.5 million in seed funding.
The round was led by The Social+Capital Partnership, the venture fund created by former Facebook vice president Chamath Palihapitiya. Other investors include Google Ventures (Kevin Rose is Google’s partner on the deal), Tim Ferriss, Jason Calacanis, and Gary Vaynerchuk.
Co-founders Gino Zahnd (CEO) and John Bragg (CTO) gave me a quick tour of the service on Wednesday. They say it tackles two of the big interactions between landlords and tenants — the rental application and the actual payment.
When it comes to applications, landlords really only care about a few things, Zahnd says, namely the applicant’s job, employer, income, and the percentage of their income that they’d be paying in rent. Everything else on the standard application is just noise. So instead of forcing renters to fill out a long application that the landlord probably won’t read, applicants create a shorter profile on Cozy. Landlords get an online dashboard where they can sort through the applications, while renters get a single profile that they can send to any interested landlord, rather than filling out the same application over and over.
Once the landlord has actually selected a tenant or tenants, Cozy also manages the rent payment process. Zahnd notes that for many people, rent is the one check that they still write each month. Thanks to Cozy, it may finally be time to get rid of your checkbook. Both the landlord and renter enter their bank account information on the site, then the renter can visit Cozy whenever it’s time to make a payment, or they can set up automatic monthly payments. And renters can divide the costs between multiple roommates — Cozy collects the money from each roommate, combining it into a single payment for the landlord.
It sounds like Cozy comes out of the frustrations Zahnd and Bragg have experienced as renters themselves, like the time a landlord ran a credit check on Zahnd six times in eight hours, lowering his credit score, or the months that Bragg struggled to find an apartment in San Francisco. (As a renter myself, I definitely see the appeal.) At the same time, the pair says it has spent a lot of time speaking to landlords to learn what their problems are and what they’d want to see in this kind of product.
For now, Cozy is targeting landlords who own between 1 and 25 units. In other words, these aren’t large property management companies, but rather individuals who have experienced plenty of frustrations of their own. Approaching the landlords is probably the right way to go, because they have more control in the relationship — a tenant probably isn’t in a position to force a new payment system on their landlord. The challenge, Zahnd and Bragg admit, is trying to recruit customers when the landscape of small property owners is so fragmented. They say they’ve come up with some strategies to deal with the problem, though they’re not ready to talk about them yet.
Cozy is also expanding its invite-only beta today beyond the initial hand-picked landlords. Interested property owners can now sign up at the Cozy site, and the company will gradually bring new users into the service.
The company emerged from i/o Ventures, the incubator and co-working space in San Francisco’s Mission District (Cozy was originally called Avenue). The team is also developing iOS apps, though Zahnd says the website already works on an iPad browser.