🦄 Unicorner Startup of the Week:

Simply Homes

✍️ Notes from the Editors

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The idea of “we buy ugly homes” isn’t new. But there’s always a way to improve on a concept.

We met Simply Homes CEO Brian Bagdasarian a little over three years ago when Clubhouse was a thing (yes, it was three years ago, and yes, it makes us feel old). He was in his early days of building his company, much as we were with Unicorner. It’s amazing to see how things come full circle.

This week, Derek Wong writes that “it’s possible to build a successful company and do good.” Let’s see more of that mindset in 2024. 🚀

- Ethan and Arek 🦄

Helping homeowners sell as-is

Simply Homes is a programmatic homebuyer specializing in older and outdated homes. Leveraging AI and automation, the company swiftly formulates competitive offers on homes, similar to a process known as iBuying. Upon acquisition, Simply Homes renovates the properties, making them suitable for renting to individuals holding Section 8 vouchers. Whereas most iBuyer companies will purchase middle or upper-class homes to flip, Simply Homes buys older and outdated homes to renovate and rent out long-term. This inclusive approach caters to a diverse range of tenants, including low-income families, the elderly, and the disabled.

🔗 Check it out: simplyhomes.com

💰 Business Model

Simply Homes generates its revenue from fees that are applied when people sell and renovate their homes. Simply Homes also has a second company, a property holding company, which generates revenue from the fees from investors.

📈 Traction and Fundraising

• Raised $22 million in recent funding from Gutter Capital, Watchung Capital, Village Global, Ambush Capital, RavenOne Ventures, Neil Parikh, Gabe Flateman, Luke Sherwin, and others

• Owns over 100 units

• Has seen revenue grow 50% quarter over quarter since launching Q1 of 2023

👫 Founders

• Brian Bagdasarian, CEO: Over 20 years of human process automation and machine learning, previously Head of Conversational Growth Strategy @ HubSpot, Founding Member @ Motion (acquired by Hubspot)

• Robert Kavanagh, CFO: Previously led the acquisition of Ireland’s largest social housing portfolio and spent 10 years as an investment banker

📖 Founder Story

Brian Bagdasarian is obsessed with solving inefficiencies. 

Starting out his career underwriting real estate properties, he quickly learned how to develop an efficient algorithm to use these processes. While spending time traveling the world, underwriting these properties both large and small, Bagdasarian’s eye for inefficiency became sharper and sharper.

When his previous company, Motion AI, was acquired by HubSpot, it was the biggest chatbot company, with over 34,000 users and 73,000 bots on the platform — with a 4 person team. 

But Motion AI and building chatbots were more than just building a new technology. Building a chatbot was about building a technology that makes companies more empathetic and humane. 

Simply Homes became that synergy between underwriting real estate and using technology to build an empathetic and humane company.

💼 Opportunities

• Project Manager for Renovation of Section 8 SFR

🔮 Our Analysis

There is a huge need for more affordable housing. On one hand, there’s currently a shortage of over 7 million affordable housing units across the nation. For people working a minimum wage job, affording a place to live would mean working 150 hours per week. This shortage of affordable housing has long-lasting effects. 

A Harvard Economist showed that if a child can move to a better neighborhood before the age of 13, their lifetime earnings increase by 31%. While interest rates fluctuate and real estate booms and busts, millions of people simply need a home. Cue, Simply Homes.

Simply Homes is using automation to overhaul this process. It buys value-add homes, renovates them, and rents them out to section 8 voucher holders. Using over 700 different data points extracted from the Department of Housing and Urban Development and the U.S. Census, its underwriting model allows for a thorough and complete offer. 

Simply Homes has seen the hockey stick growth. The company began its property acquisitions in January 2023 and accumulated a total of 106 properties by the end of the year, including a noteworthy increase of 42 new acquisitions in December 2023. Scaling is built into its business model, as it’s been able to grow with only 13 full-time employees, using Bagdasarian’s background in human automation to remove unnecessary tasks. 

Simply Homes is currently operating in Pittsburgh, Cleveland, and Detroit. It is looking to grow sustainably and approach new markets, with the goal of acquiring over 100 new units per month by the end of Q1 2024. Built into this growth is the possibility of helping the underserved. Simply Homes is showing that it’s possible to build a successful company and do good.

📚 Further Reading

• Simply Homes nabs $22M, leverages AI to tackle affordable housing crisis [TechCrunch]

• Simply Homes’ $22 Million Boost Aims To Tackle Affordable Housing Shortage [Superb Crew]

• Our Investment in Simply Homes [Medium]

Written by Derek Wong

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