AppFolio Expands Through a Platform Marketplace

Property management software company AppFolio recently announced its AppFolio Stack offering, which it bills as an “integration marketplace.” Still relatively uncommon in proptech, it’s an approach that has become a standard marketing and business development strategy in the greater software industry.

As the company claims, “AppFolio Stack resolves the integration challenges previously unaddressed by legacy real estate solutions, empowering property managers of all sizes to boost productivity, simplify workflows and improve resident experiences.” Third-party vendor partners include ButterflyMX, Conservice, HappyCo, Knock, Lowe’s, and Property Meld.

“As we partner with operators with larger, more complex portfolios, we consistently hear about the need for better technology that unifies specialty PropTech solutions within a single, modern platform,” Will Moxley, the company’s senior vice president of product, said in prepared remarks. “Simultaneously, small, high-growth property management companies are looking to increase their productivity by leveraging the latest technology. With the launch of AppFolio Stack and our certified integration approach, we provide the real estate industry an alternative to legacy property management platforms and their limited integrations, while protecting our customers against the risks of poorly implemented and unvalidated integrations. This enables property managers of any size to finally deploy the modern technology stacks that give their businesses a competitive advantage.”

This seems a somewhat unusual approach to product offering development and integration in proptech, but it has been seen in various ways for 30 to 40 years in the software industry. Early on, major computer operating system companies would partner with smaller companies to ensure a robust set of capabilities. Over time, some of the biggest corporations would then start to integrate more features, displacing the smaller individual players.

However, others worked differently and continued to support third-party infrastructures because it was an economical way to address more user interests and also create a set of supporting marketing organizations. A clear example is Salesforce, which has built itself into a force in customer relationship management with a current market cap of about $180 billion, according to data from S&P Market Intelligence.

In the case of AppFolio, its partners offer smartphone-based access control (ButterflyMX), rent and utility billing and payment (Conservice), property data access (HappyCo), CRM (Knock), e-procurement (Lowe’s), and direct messaging and communications services for billing and invoicing (Property Meld).

It would be expensive and a distraction from core business for a startup to develop its own takes on all these. Given the cloud nature of AppFolio, the company can ensure property integration once with the expectation that customers would be able to use all the various parts. Presumably AppFolio would get a cut of subscription sales of other services through its platform.