Lessen, Property Services Startup, Scores Unicorn Valuation

Lessen CEO Jay McKee and Fifth Wall managing partner Brendan Wallace (LinkedIn, Fifth Wall, iStock)

A historic year for proptech fundraising has produced another unicorn.

Lessen, a real estate management platform that connects property owners and operators to electricians, cleaners and other service providers, raised $170 million in a Series B round, pushing its total funding so far to $214 million — nearly quadruple its previous fundraising — and valuing the two-and-a-half year-old company at more than $1 billion.

Proptech venture capital firm Fifth Wall, which led Lessen’s $35 million Series A round in June, returned to lead the new round. Khosla Ventures, General Catalyst and Navitas Capital were also repeat investors.

The Series B was oversubscribed, Lessen CEO Jay McKee said, and the company plans to detail additional investment from special purpose vehicle partners before the end of the year.

Lessen’s fundraise comes at a pivotal time for the U.S. housing market, with an unprecedented combination of high demand and low supply driving home prices to record highs as developers, owners and operators grapple with labor shortages and supply chain disruption.

“Lessen is seeing a difficult hiring environment, complicated materials procurement system, and increased appetite for portfolio scaling all at the same time,” McKee said by email.

McKee’s experience is not limited to tech. He previously founded the single-family rental company Colony American Homes, which merged with a Starwood Capital Group affiliate in 2015.

Scottsdale, Arizona-based Lessen’s client base, which spans 30 U.S. markets, includes large multifamily and single-family rental REITs, who use the platform to source more than 2,000 plumbers, electricians, cleaners and other servicers. Users can manage multiple work orders as well as bill and analyze data from previous jobs.

McKee said Lessen’s transparency, comprehensive data and ability to “optimize workflows” improve the “timing, quality and pricing of jobs,” and set the platform apart in a crowded field.

“We believe that we are approaching the property-services industry in a unique way that combines tech and field delivery in a way that no one has done before,” McKee said.

Lessen, which also has offices in Seattle and Miami, plans to launch its platform nationwide soon and triple its employee count in the coming months, McKee said. “Eventually, we believe there is opportunity for international expansion,” he said.

Proptech investors have produced a few unicorns over the last year. The most recent was Place, a technology and business services platform for agents, which achieved a $1 billion-plus valuation with its first funding round this month.