Apartment List raises $50M to expand to smaller apartments and single-family homes

Vator Splash winner expects 1 in every 64 renters to use Apartment List this year

A larger percentage of people are renting now than they have in decades. According to data from the Pew Research Center, 36.6 percent of households opted to rent rather than buy in 2016, the highest number since 1965.

That's good news for rental marketplace, and former Vator Splash winner, Apartment List which announced a $50 million Series C round of funding on Thursday.

The round was led by John Burbank, Founder of Passport Capital, led the round, with participation from Allen & Company LLC, Canaan Partners, Industry Ventures, Matrix Partners, Quantum Partners LP, a private investment fund managed by Soros Fund Management LLC, Tenaya Capital, and WTI. In addition to investing in the company, it was also revealed that Burbank will be joining the company’s Board of Directors.

Apartment List, which last raised a $30 million round at the end of 2016, has now brought its total funding to $110 million.

Launched in 2011, John Kobs and Chris Erickson, Apartment List consolidates millions of listings from across the Web, working with partners such as Forrent.com and others, offering users features for comparing and sharing properties, as well as information on individual neighborhoods, such as “workability” and “stroller index.”

All Apartment List rentals are verified with the property owner in real-time. The company tracks factors and makes it easy for renters to search and filter for things like commute time biking/driving and using public transportation, pets, laundry and parking.

The company has grown quite a bit in the last year, increasing the number of properties on its marketplace by 50 percent, meaning that it now powers over 10 percent of all rentals in the United States for a total of four million listings. 

Last year, 1 out of 183 renters found their home on Apartment List; this year the company expects that figure to rise to 1 out of 64. And in 2019, it expects to grow its share of the U.S. rental market by another 285 percent. The site has helped 150 million renters since it started.

"2018 is going to be a good year. We are on the road to helping even more renters find their next home. We’re innovating our marketplace and scaling our business to help people make better, smarter decisions about where they live and we won't stop until we've won this market," Kobs told VatorNews.

In addition to the increased number of renters on the market, Apartment List's own data shows that rents all over the country are going up as well.

"Rental fever is real; our Rentonomics data found that only nine out of 100 of major US cities have seen rents fall over the past year. At the same time, this year the cost of buying a home will increase, yet 70 percent of millennials have less than $1,000 saved for a down payment," Kobs said.

The numbers will start to fall eventually, but when that does happen he doesn't expect that to have an effect on Apartment List's businesses.

"While we can’t control rent prices, we can be a voice for the next generation of renters and help them get the most out of their rental home," he told me.

Apartment List will use its new funding to double its headcount; it currently employs 117 people.

"We’ll be hiring across the company with a particular focus on our sales and engineering teams to continue establishing strong relationships with property managers and building quality features for renters," Kobs told me.

It will also use the funding to expand its market share by growing its property inventory to include smaller apartment buildings and single-family homes. That will be in addition to the large apartment communities it already serves. 

"We’ve spent the past few years prioritizing the multi-family market and creating a presence in major cities around the country. The multi-family industry is only one-third of the rental market today," said Kobs.

"With this latest round of funding, we are looking towards the remaining two-thirds of the market: smaller apartment buildings and single-family homes. We won’t stop until we’ve won the entire US market. Our goal is to offer renters more choices and empower them to live the life they want in a home they love."

(Edit: We inaccurately listed Chris Herndon as co-founder of Apartment List)