HappyCo raises $72m to fund build-to-rent ambitions

Adelaide-founded, San Francisco-based property technology company HappyCo has raised US$52 million ($72 million) to expand its platform, which currently holds data on one in eight professionally managed units in the US and is eyeing the build-to-rent market for growth.

Founded in 2011 by Jindou Lee and Andrew Mackenzie-Ross, HappyCo provides workflow software that improves efficiencies and leverages its data to help customers make faster and better decisions, with real-time operational and reporting tools that are utilised by lenders, investors and asset managers.

As one of the first Australian startups to come through the accelerator Startmate in 2012, HappyCo's data is relied upon to transact approximately 26 per cent of all US sale transactions of multifamily units last year, with 3.5 million rental homes on the books.

The data - including unit-level photographs - are required for every property loan in the US and are gathered by inspectors and underwriters who use HappyCo's technology.

The latest Series B raise led by US-based venture capital firm Camber Creek will also enable HappyCo to expand its platform, add new services and hire more Australian employees. 

"This funding round marks an inflection point in the growth of our business, not only in our capacity to develop new products and innovative solutions, but also to lay down a stronger team presence in Australia as the build-to-rent market here gains traction," says Lee.

"As well as hiring a load of technical talent in Australia, the funding will allow us to pursue acquisitions in the major markets where we’ve built a best-in-class network of institutional real estate investors, property managers and lenders," he says.

"HappyCo delivers on its promise – and its name – by providing powerful but easy-to-use products to help our partners perform routine onsite tasks, including maintenance requests and property condition assessments. We then make this data accessible across the industry to drive important decisions about underwriting, investment strategies and management."

Camber Creek’s managing partner Casey Berman says partnering with HappyCo will mean billions of dollars in annual transactions will benefit from the three-dimensional perspective that the startup can and will provide.

"HappyCo is the market-leader, with scale, vision and a track-record of success," Berman says.

"This investment gives HappyCo the resources to move the infrastructure status quo away from static snapshots of buildings towards dynamic insights that inform more precise valuations, inspire plans for how to reposition assets, drive down insurance costs and identify modifications that provide the greatest return on investment."

As an early alumnus from Startmate, HappyCo was one of the first companies to receive investment and mentorship from the accelerator's original founder Niki Scevak, who is also a partner at Blackbird Ventures.

"Jindou and Andrew are tenacious and hungry, the type of founders Startmate exists to champion from day one," Scevak says.

"We feel extremely proud to have witnessed the beginnings of their journey at HappyCo, and to see the company flourish over the past decade only affirms the swift maturation of the local startup ecosystem."

Lee says the foundation Startmate provided was essential to getting HappyCo off the ground at a time when the network supporting the success of Australian startups was relatively small.

"It takes a village to raise a child, and a startup is no different. The magic of Startmate, both when we went through the program and today, is the engine of its network," Lee explains.

"The peerless mentorship provided to us by Niki and others has been a constant source of guidance for us over the past decade."

Other investors that took part in the round include The BAM Companies, Berger Rental Communities, Bonaventure, CA Ventures, Continental Realty Corporation, Embrey Partners, Klein Enterprises, Koman Group, Mark-Taylor, Masco Ventures, Pier 88, Standard Communities, Strata Equity Group, Vesta Ventures, and Wermers Companies.

Current customers include Freddie Mac, Walker & Dunlop, Berkadia, Greystone, CA Ventures, Maxus Properties, Cushman & Wakefield and AMC.

The company's platform seamlessly integrates with the multifamily platform of Freddie Mac, a major US mortgage lender with more than US$2 trillion in assets.

"Freddie Mac was thrilled to work with HappyCo to develop our digital inspection tool, Optigo Happy,” says Lauren Garren, chief business officer for Freddie Mac Multifamily.

"HappyCo also supported the rapid development and deployment of a new virtual inspection feature that proved essential throughout the pandemic when traditional in-person inspections were not feasible. We look forward to leveraging our work with HappyCo well into the future."

Investors and asset managers such as CA Ventures and GID use HappyCo to elevate their operations with real-time data and visibility into property conditions and operations for streamlined and cost-effective due diligence.

"HappyCo enables CA to perform quarterly inspections of the assets in our buildings," says Mark Zikra, senior vice president of technology and innovation at CA Ventures, a real estate management company with assets in more than 100 markets.

"By leveraging the data we aggregate during that process, we have saved hundreds of hours of work for our teams during disposition and capital improvement planning.

"Having a one-click database of a building’s inventory enables our team members to focus on impactful, human-centric interactions with our residents and guests."

HappyCo also serves property managers, offering a complete suite of apps to simplify processes, drive better performance and generate comprehensive views of assets within a portfolio. The tools and services are designed to help managers create “sticky” communities with high occupancy rates and frictionless operations. 

"Operationally, HappyCo enables our team members to shift focus from the minutiae of property management and spend more time building relationships with our residents and guests. When all aspects of maintenance, inspections, workflows, and tasks just work, we can get back to what really matters: our residents,” said CA Ventures’ Zikra. 

"We value the relationships we’ve built with our partners beyond the tangible products or services. The entire team at HappyCo embodies the truest definition of a partner and working with them continues to be an outright pleasure.

"Their relentless passion shines through in every interaction, and we are overwhelmingly excited for HappyCo’s future and the next iteration of industry-shifting products and services they will develop."