See the pitch deck a real-estate startup used to raise $27 million from SoftBank to build the world’s largest housing company — without owning any homes

Daniel Mishin, CEO and founder of June Homes
  • Housing startup June Homes has come out of stealth mode with $50 million in funding.
  • The property technology firm most recently raised $27 million in a round led by SoftBank Asia.
  • CEO and founder Daniel Mishin walked Insider through the pitch deck he used to raise the round.

Daniel Mishin wants to turn June Homes into the world’s largest housing company — without owning a single home.

The real-estate technology startup offers property management for landlords, apartment-hunting tools for renters, and customizable leases for mom-and-pop landlords to use with tenants.

On Wednesday, June Homes announced that it has raised a cumulative $50 million since its founding in 2017. Most recently, June Homes raised a $27 million Series B round, led by Softbank Ventures Asia, which comes on the heels of a $10 million seed round and a $13 million Series A. The company did not provide a valuation.

Mishin told Insider that the idea for June Homes came from his own challenges renting an apartment when he moved to New York. Rent is, on average, the largest expense Americans face. Zillow estimates that renters in the US shell out more than $485 billion a year, according to Zillow.

Renting, Mishin said, “is the single largest recurring expense with the single lowest net promoter score.” Net promoter score is a calculation that determines customer satisfaction.

Scoring a home was not only pricey, he added, it was also hard.

At first, Mishin blamed landlords for the hassles, but realized that landlords had to shoulder the costs of broker fees and property management, while still risking the possibility of default if tenants can’t pay. This is especially true for smaller landlords, who don’t have the efficiencies of scale and deep pockets that landlords with multiple units enjoy. Mishin — who formerly founded and sold a portfolio of hostels around Ukraine and Russia — decided that his new startup could be an “arbitrator” between landlords and tenants. It would, effectively, replace brokers.

Now June Homes offers renters in six cities — New York, Los Angeles, Washington DC, Boston, Philadelphia and San Francisco — the ability to rent an apartment within a week of signing papers for one to 18 months. The longer the lease, the cheaper the monthly rate. The firm allows renters to decide whether to take the apartment unfurnished, partially furnished, or fully furnished. Once tenants move in, they continue to pay rent through June Homes and use the company’s online concierge to answer any questions or lodge maintenance requests.

For its property management and broker-free rental services, landlords either give June Homes either a cut of the rent or pay a monthly fee.

The company aims to ease the rental experience for middle-income tenants, including digital nomads, the hordes relocating new cities during COVID-19, and young professionals who may not have the upfront cash or long-term desire to invest in their own furniture.

Mishin walked us through the pitch deck the company used to raise its most recent funding round from investors including angel investor and musician Demi Lovato, FJ Labs, K5 Scooter Braun’s venture capital firm TQ Ventures, Reshape and Quiet Capital.

June Home’s goal is far from modest, shooting to eventually become the largest housing company.

June Homes

The focus on not owning or leasing property is especially important to keeping expenses down.

The WeWork IPO fiasco in 2019 and the challenges of coworking and short-term rental companies in the early days of the pandemic showed the risks of real estate tech companies directly leasing space on their own balance sheets.

This makes it cheaper, and easier to scale, and while the upside potential may not be as high, it is significantly safer for the company.

Housing sucks, as many people know.

June Homes

Mishin said that one of his first questions while pitching was, “Are you a renter yourself?” Many VCs and angel investors are likely homeowners and may have avoided the worst of the rental market. Mishin said that renters know at an experiential level how broken our rental markets are.

This slide is a helpful cheat sheet for those who don’t rent

June Homes

Affordability, upfront costs, the time and energy to search and apply for a an apartment, lack of flexibility and absentee landlords all contribute to renting’s abysmal net promoter score.

This slide highlight’s Mishin’s own realization that landlords hate renting almost as much as renters do.

June Homes

Property management fees add up, while the idle time between tenants and the challenge of evicting non-paying tenants leads to a looming threat of default.

MIshin said that many current rental standards, like having an annual income that is 40x the monthly rent, are outdated systems from the past.

June Homes

The slide is careful to say that it isn’t the only one who can fix these problems, but instead that it one of many that has a part to play in solving them.

The company’s focus on small landlords is somewhat rare for the category.

June Homes

Small landlords mean more sales representatives, more time spent acquiring customers, and more time communicating with them in times of crisis or when there are changes to the business, like during the pandemic. Many other companies have chosen to serve the largest landlords, and minimize their clients, but Mishin sees small landlords as those who can benefit the most from the tech and services of June Homes.

This slide highlights some of the main draws for tenants.

June Homes

The company offers a range of furniture packages, from fully furnished to not furnished at all, flexible leases, and roommate vetting, which is especially important if someone can’t afford a whole apartment to themselves.

Design also plays a major role in the company’s pitch.

June Homes

Flexibility is key as well. Lease terms are customizable, and June Home offers shared or solo apartments that come with various levels of furnishings.

June Homes

The company offers one app for every step of the process.

June Homes

Tenants can use the app to search for homes, book virtual tours, apply for apartments, and sign leases. They can also use it to actually enter the apartment upon move-in.

The company touts its positive reviews, setting it apart from traditional landlords who are lambasted on Yelp.

June Homes

June Homes’ algorithm is central to its business model, both in how it acquires new landlords as customers and how it attempts to fetch higher rent prices for their apartments.

June Homes

To find landlords whose units June Homes can spruce up and lease out, the company uses an algorithm that highlights poorly performing, mispriced, or outdated listings on real-estate websites.

The company’s business development team works closely with the algorithm’s findings, reaching out to the landlords to ask them to use June Homes.

The algorithm also helps to highlight what small maintenance tasks should be completed for the unit to lure renters faster and command higher prices.

June Homes

The algorithm also suggests design changes that to make in those units to make them more appealing. The company promises to fix up the apartment using local vendors and put it back on the market within three days.

The company uses repeatable template designs to keep the upgrades as quick as possible.

June Homes

The company’s designers quickly match a room’s characteristics to their different templates, ensuring that units are quickly ready for the market.

The company has studied how to market apartments so that they can quickly be rented out, usually just from virtual tours.

June Homes

While the slide has the average amount of days on the market blanked out, Mishin told Insider that June Homes units are typically on the market for only about a week.

The company estimates its potential size is a staggering $6.9 billion.

June Homes

It’s not as high as valuations of the largest multifamily real estate investment trusts (REITs), but this potential market size dwarfs any other company that, like June Homes, doesn’t actually own the underlying assets it rents out.

The company plans to sign 10,000 units over the next 24 months.

June Homes

The pandemic has caused dislocation and chaos in the multifamily market. At the time of the pitch, apartments were still priced well below pre-COVID-19 levels. With rents trending back up, the company could see even more upside through revenue sharing.

The company’s occupancy rates took a major hit in the early days of the pandemic, but had mostly recovered by the end of 2020.

June Homes

Mishin told Insider that the company lost a lot of customers in the early days of the pandemic, many of them international visitors who rushed to get back home before borders closed. The company quickly moved to connect with each landlord, scheduling biweekly calls instead of sending one-size-fits-all communications.

Mishin said that this approach made landlords more open to giving the company some time to recover. By the end of 2020, Mishin said, June Homes was operationally profitable.

This slide has its exact numbers blurred out, but projects the company’s plans for big growth over the next two years.

June Homes

The company plans to have its largest year of onboarding next year, growing the company’s gross rental income by almost 300%.

The company also guarantees rent for landlords, swapping out traditional security deposits for its own underwriting formula.

June Homes

The company is so confident in its underwriting formula that it guarantees at least some of the rent for tenants that default and are no longer able to rent. Mishin said that this underwriting formula is able to underwrite tenants with nontraditional streams of income as well.

“If someone has a full-time job in a startup, a side gig doing something else, and invests in crypto, how do you even underwrite that tenant?” Mishin said.

Traditional underwriting, using a credit score and an income-to-rent ratio, can sometimes reject renters that wouldn’t be at risk of default. Mishin said that their data set is able to solve for this problem.

The company has announced a slew of recent hires from both big-name startups like Casper and more established firms like IBM as it exits stealth mode.

June Homes
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