It’s estimated that over one-third of Americans rent their homes, according to the National Multifamily Housing Council. And half of those people are under 30-years-old.
But what’s the best way for this often transient group of people to find a new place to live? Craigslist has been a leader in online rentals, but not everyone is satisfied with the user experience.
Apartment List is one of the many sites vying to stand out in the crowded rental marketplace. And it’s raising another $50 million in capital, which should help. Passport Capital, Canaan Partners and Industry Ventures all participated. The startup has raised a total of $110 million since 2011.
Co-founder and CEO John Kobs said that despite the competitive landscape which includes Zillow, HotPads and PadMapper, he believes Apartment List has a business model that’s different. It only collects payment from listings that actually result in a transaction.
“We’re the only company that gets paid exclusively for success,” said Kobs. He said that this helps prevent scammers.
Rich Boyle, general partner at Canaan Partners said that others in the space have been charging “regardless of propensity to close or the fit with a given property, which was unsatisfactory to all and wasted a lot of time and money on both sides.” He says that the current Apartment List model has resulted in a business that’s “scaling very, very quickly.”
Kobs says that their most successful communities are Denver, Dallas, D.C. and other “demand-constrained markets.” Apartment List aims to help landlords find renters in competitive regions.
Consumers also have a different experience on the Apartment List platform. Instead of doing a search for availability, users answer a brief survey that helps Apartment List figure out their top priorities. Convenience, price and specific amenities are all weighted in accordance with stated preferences.
Apartment List is “triangulating exactly what renters are looking for early on,” said Kobs.
And while the aptly-named business is focused on apartments for now, it will eventually add condos available for rent. Kobs believes that this is a “huge opportunity” for growth because it will satisfy customers who are looking for “unique spaces.” (He hasn’t reserved the Condo List domain, however).
Ultimately, he has big dreams for his business. When asked if the startup could IPO someday, he said “absolutely.”
For now, Apartment List is using the funding to double down on its existing business. It’s also making key hires including VP of Engineering Paw Anderson, who is joining the company from Uber; VP Partnerships Amanda Short who comes from Netflix; Chief Sales Officer Matthew Woods, formerly of SunRun.