Series B Funding to Grow Go-To-Market Teams

SEATTLE—Founded in 2014 to simplify the way property managers and renters communicated during the leasing process, Knock’s first products included tools for scheduling, messaging and workflow organization, which have become essential for operating and managing apartment communities. The platform has grown to encompass much of the marketing, sales, service and retention tools for apartment managers, while providing business intelligence solutions to asset managers and owners focused on the bottom line.

The Seattle-based startup recently raised $12 million in Series B funding. The round was led by Madrona Venture Group, with participation from Lead Edge Capital and Seven Peak Ventures, bringing the company’s total capital raised to $27.5 million.

“The Knock team has executed exceptionally well since we led the Series A,” said Scott Jacobson, managing director at Madrona Venture Group. “They have distinguished themselves as the clear leader in front office software for multifamily operators and have delivered strong customer value in robust rental markets. Knock is that much more critical to its customers in what could be softer rental markets to come, and we are excited to have the opportunity to double down on our investment in the company to help accelerate their product roadmap and ability to add value to multifamily operators.”

Knock will use the new capital to continue growing its go-to-market and product teams while furthering its front office product roadmap, including a suite of productivity and business intelligence tools that are critical to improving occupancy and renewal rates.

The company also more than doubled revenue in 2019, and more than 1 million apartment units are managed on the platform. Knock is used by multifamily portfolios such as Pinnacle, FPI, Highmark and ZRS.

“Every apartment building is like its own small business, but many management companies haven’t modernized their front office technology to understand what is driving performance at each property, from marketing to sales to retention,” said Tom Petry, CEO and co-founder of Knock. “The result is asset under-performance, which may become even more pronounced with an uncertain macro-climate. Knock elevates property managers and leasing teams into high performance, modern sales organizations in any environment, delivering the visibility, accountability and productivity gains that owners need more than ever.”

Indeed, the Series B comes during a time of unprecedented challenges for apartment managers. The impacts of COVID-19 have put significant pressure on rent collections, and companies have had to transition onsite teams to remote workers, a change for which much of the industry was not prepared.  With that said, messaging and mobile tools have been essential in this transition for Knock customers, with usage skyrocketing in recent weeks. In addition, Knock has accelerated the delivery of critical new features including new resident engagement and renewal workflows, new centralized leasing tools to work from home, as well as new self-guided and live video touring capabilities.

“In many ways, our product was built for times like these and the value we deliver to our customers has never been more apparent than during this crisis,” Petry tells GlobeSt.com. “There’s a renewed appreciation for delivering prompt and personal responses to help cope with so much uncertainty.”

Petry says Knock can address numerous COVID-specific challenges:

• Knock is cloud based, so its customers are able to access the Knock web and mobile applications from home or remotely
• The startup launched live video touring, so prospects who want to lease remotely are able to view units and consult with a leasing professional from anywhere
• The platform launched self-guided touring integration in partnership with Rently, so prospects who still want to visit properties in-person are able to do so safely, and on their own schedule with fully autonomous scheduling
• The firm launched Renewal CRM so front office teams have a proactive, organized and streamlined workflow to engage with residents during the renewal cycle, which has been particularly important during COVID

“We expanded our multi-team leasing capabilities, so leasing teams are able to engage across multiple properties in order to provide highly responsive service at scale, available on web and mobile,” Petry tells GlobeSt.com. “While these new and improved capabilities were accelerated in response to COVID, we believe they are all permanent fixtures in a modern front office software platform.

As for COVID’s impact on the rental market, Petry says multifamily is a resilient asset class and is holding up pretty well so far.

“In general, (it) will be less impacted than what you’ll see in office and retail, consistent with other economic slowdowns,” he says. “Certain geographic markets with high exposure to hospitality and manufacturing jobs will be impacted more than those with high tech. Regardless of geography or asset type, unemployment will certainly put pressure on rent growth and rent collections in most markets, so everybody is monitoring how quickly jobs and incomes are able to rebound. In general, occupancy and rent growth are expected to soften, but the majority of operators think that occupancy and rents will be back to previous levels within 12 months. Time will tell.”

As a result of the healthcare crisis, Petry says the firm is seeing unprecedented surge in product usage. Two-way communications, not marketing blasts/drip, managed through the product has spiked since the start of COVID. Compared to usage levels at the beginning of January 2020, email has increased by 149%, SMS/text has increased by 189% and phone has increased by 50%.

“Further, although in-person apartment visits dropped by 76% from their high point to their low point, the amount of signed leases was virtually flat, even while accounting for customer growth,” Petry says. “This is evidence of both the resilience of the apartment sector, as well as the efficacy of our leasing tools.”

While revenue and team growth has exponentially scaled, Knock recently hired enterprise software executives from Google, Microsoft, Seismic and SAP, among others. The SaaS platform recently hired Eitan Saban (formerly with Seismic and Docusign) as VP of sales, Darren Koch (formerly with SAP, Concur and Hotwire) as chief product officer, and Matt Hillman (formerly with Google and Microsoft) as VP of engineering.

“We have dialed back on our headcount plans for the year, but we are still actively hiring for a few roles,” says Petry.