Here in San Francisco, there’s never been a crazier time to try to rent an apartment. As fortune-seekers rush to the region to get in on the continuing tech boom, demand is far outstripping supply. That means more prospective renters are competing for each unit, landlords and brokers have more applications to sort through, and rents in popular neighborhoods are rising through the roof. (It doesn’t help when a massive fire delays the construction of hundreds of new rental units.)
So it’s no surprise that entrepreneurs keep coming along with new technologies intended to make the process smoother for all concerned, meaning landlords, brokers, property managers, and prospective renters. As soon as one San Francisco-based rental-tech startup leaves the scene—the way RentJuice got bought by Zillow in 2012 for $40 million—another pops up in its place.
This time it’s Zumper. The two-year-old, seven-employee company, which just raised $6.5 million in Series A funding from marquee venture firm Kleiner Perkins Caufield & Byers, offers an app called Zumper Pro that landlords and brokers can use to create and publish apartment listings directly from their iPhones, while they’re on the road (an Android version is coming soon). Renters can use a separate consumer-focused Zumper app to browse available apartments in their neighborhoods of interest and submit inquiries to landlords.
Older real estate listing sites Zillow and Trulia have their own mobile apps. But co-founder and CEO Anthemos Georgiades says Zumper’s advantage is that its service is designed to work first on mobile devices, then the Web. “Professionals in rental do not want to spend any time at their desks. They want to be out getting leads and showing apartments,” he says. “We feel that being mobile-first is a huge competitive advantage.”
Zumper is also backed by Andreessen Horowitz, NEA, Greylock, CrunchFund, Dawn Capital, and Experiment Fund, and already has thousands of listings for apartments in 30 top U.S. cities. Georgiades, who comes from a real estate family in London and spent years renting apartments the old-fashioned way—through classified ads and printed rental applications—says the startup set out to fix several problems at once.
One is the difficulty of creating an apartment listing. In the past, landlords or brokers usually had to visit a unit to take pictures (or send a photographer, at serious time and expense), then head back to their office, where they merge the photos and some text into a listing on a desktop website. With Zumper Pro, the whole process happens on a smartphone. “I can use GPS to locate the unit, use the camera phone to do photography—on the iPhone 4 and above the megapixel quality is usually higher than what a lot of people have in their desk drawers—and post to the platform in real time,” Georgiades says.
Posts on Zumper automatically go out to Trulia, Zillow, and a third rental site called HotPads. If a renter comes across the listing inside the Zumper app, there’s a button that lets him or her call the landlord immediately. “Brokers will say they posted a listing from their iPhone, and before they even leave the apartment, they get a call from a renter who saw it,” Georgiades says. That kind of immediacy is a big advantage for brokers, especially in cities like New York and Boston where landlords allow multiple brokers to list the same units and the first broker to publish a listing is often the one who rents the apartment and wins the commission.
Another problem with the ancien regime, Georgiades says, is that it’s hard for renters to tell whether the apartments listed on many sites, especially Craigslist, are really available. Many a renter’s e-mail goes unanswered simply because a listing was out of date and the apartment has already been rented, he says. But because Zumper knows the status of each unit a landlord or broker has listed, it can remove an apartment from its listings the moment a lease is signed. “What we are trying to build,” Georgiades says, “is the notion of a real-time platform, where landlords are updating their inventory directly from their smartphones or tablets. We want you to have a much higher response rate when you inquire.”
[Pricing details updated 3/17/14] Zumper currently makes money through subscriptions. Landlords and brokers pay $29.95 per month per user for the ability to create unlimited listings, along with marketing tools such as flyers and postcards. There’s also an “enterprise” subscription with custom pricing that lets multiple users within an agency post to Zumper; Georgiades says this can bring the price down to $15 per month per user.
Brokers can also opt to pay extra to have have specific properties placed at the top of Zumper’s listings for a given neighborhood, on a cost-per-lead basis. Zumper only charges for this placement when renters contact a broker about a listing, and brokers can set a cap to control their costs. In the future, Zumper might modify this program, charging by the acquisition rather than by the lead, Georgiades says. “We have a strong and loyal Pro user base who spend all day in our software, so we are in a great position to track tenant leads from original email through to close.”
And farther down the road, Zumper could also let brokers bid against each other for the exclusive right to publish a listing for a given unit. “In the short-to-medium term, the cost-per-lead model is a very attractive monetization strategy, but long term, there is a huge opportunity to create an internal marketplace for brokers to be the only ones who can show that listing,” Georgiades says.
Right now Zumper is testing an improved version of the Zumper Pro app that will let landlords manage their interactions with renters all the way from publishing the initial listing to handling incoming inquiries, booking appointments, managing rental applications, running credit checks, and generating lease documents. It should be ready for all brokers and landlords within a couple of months, Georgiades says.
After that, Zumper will upgrade its consumer app so that renters can also have the ability to book appointments and submit applications from their phones. Consumers shouldn’t have to think of renting as “something where you drop offline the moment you set up an appointment.” Georgiades says. “We want to own the whole stack and keep you online through the whole process.”
Other companies want to own that stack too. Startups like Mokriya have begun to make Craigslist’s vast listings more accessible on mobile devices. RentJuice handles many of the same back-office tasks, and its services are now part of Zillow’s “Rental Pro” offerings. “We come up against Zillow quite often” in sales pitches to brokers and landlords, Georgiades says. “It’s a friendly competition—we ultimately still send them our listings—but I’m sure they also see the advantage of getting listings first.”
But Chi-Hua Chien, a general partner at Kleiner Perkins, says it made sense to bet on Zumper because the startup was ahead of the game in creating a mobile-first listings platform that served both brokers/landlords and renters.
“The bottom line is that Zumper finally delivers on the complete promise of mobile in the residential rentals market,” Chien says. “Brokers can instantly create a high-quality listing, pushed out to all other marketing endpoints directly from their mobile device. Renters can discover and will soon be able to close on a rental straight from their smartphone. While there are lots of other software solutions out there, they only offer half the solution.”
