NEW YORK — Doorkee, which operates an all-in-one digital platform in NY for landlords and tenants, has raised $5.7 million in early-stage funding. The seed round was led by New York City landlord Simon Baron Development and early-stage venture capital firms Corigin Ventures and Alpha Edison. Investors in the round also included landlords Stonehenge NYC and Bushburg Properties.
Co-founders John Fagan, CEO, and Jordan Franklin, COO, created Doorkee in 2019 to streamline and optimize the rental process by creating a peer-to-peer market that solves for inefficiencies and common problems experienced by landlords, departing tenants and apartment seekers. By bringing the entire process online, Doorkee creates a flywheel effect that benefits all parties:
- Landlords can easily integrate Doorkee’s platform into their existing leasing systems, saving them money on new tenant onboarding, eliminating broker fees, reducing in-house leasing costs, gaining free advertising and cutting the costly, unnecessary vacancy time between tenants.
- Departing Tenants are incentivized to notify landlords of their plans to move as early as 100 days in advance, earning a reward of $1,000 on average for coordinating virtual tours at their convenience. Departing tenants using the Doorkee platform are providing notice an average of 71 days in advance, resulting in nearly six weeks of extra time for landlords to find replacements.
- Apartment Seekers gain access to rental inventory farther in advance, giving them added flexibility to schedule virtual tours, sign a lease months earlier than previously possible and eliminate the hefty cost of using a broker – which in New York often averages as much as 15% of annual rent.
“As a renter myself, I grew tired of having to navigate the outdated, frustrating and fragmented search and leasing process. The truth is, you’d be hard pressed to find a renter or landlord who doesn’t have at least one horror story to tell – so I set out to modernize it in a way where everyone can win,” said Fagan. “Technology-driven innovation has rapidly become an indispensable pillar of society, but the real estate industry has been notoriously slow to recognize its benefits. In a sense, we view Doorkee as the iPhone of apartment renting – created with the end user in mind as a practical, intuitive solution that is engineered to provide all the tools you need in one place. It also eliminates the need for expensive brokers on all sides of the transaction.”
In New York City, where Doorkee is currently operating, rental broker fees total approximately $600 million per year. Doorkee’s end-to-end digital platform is engineered to put this money back into the pockets of landlords and renters by providing them with full control over the rental process. The platform is designed to dramatically reduce the amount of time apartments sit vacant between tenancies, helping to reduce the estimated $3.1 billion in unnecessary annual vacancy costs across New York City. These benefits are core reasons why Doorkee has managed to steadily grow its landlord and renter user base since its launch in September 2019. Capital from the fundraise is being used to expand Doorkee’s platform, as well as fuel its expansion into other major markets across the U.S.
“Simply put, removing the middle man has allowed us to create significant cost savings for landlords and renters alike. For example, the total cost to New York landlords of using Doorkee is around 60% lower than the typical combined broker fee and vacancy cost, representing an average savings of around $5,000 per apartment,” said Franklin. “The time for innovating the rental process is long overdue, and this has never been more true than in the situation we find ourselves in today with COVID-19, which is forcing people to transact almost entirely online. This reflects an acceleration of shifting consumer behaviors that have been long in the making. We are confident it will have a meaningful impact on consumer behavior for the long-term, further supporting the significant market opportunity to scale our platform.”
Landlords currently using Doorkee own more than 40,000 rental units throughout New York City. In addition to Simon Baron Development and Bushburg Properties, other notable landlords on the platform include Corigin Real Estate, Plaza Management, First Service Residential, MD Squared and R.A. Cohen & Associates.
Matthew Baron, President at Simon Baron Development, said, “As a landlord with hundreds of rental units across New York, one of the most difficult logistical hurdles to overcome is resident turnover. We often find out less than 30 days in advance that a tenant doesn’t plan to renew their lease, which presents us with a short runway to market and lease the space – often resulting in longer vacancy time between tenants. This is why a platform like Doorkee is so promising, and it’s why we chose to invest. They’re helping us to reduce our vacancy time, leading to significant cost savings, and providing a viable alternative to the traditional rental process that benefits us and our tenants.”