Steller Picks Up $20M for Its SFR Maintenance Marketplace

Proptech firm Steller Home Maintenance announced a $20 million Series-B fundraising round. Leading the round was a new investor Weatherford Capital, with existing investors Brick & Mortar Ventures, S3 Ventures, Alerion Ventures, and Navigate Ventures taking part.

According to the company’s press release, with the new round the total venture capital investment in the company is $35 million. The Series-B proceeds will help fund improvements in the company’s technology and platform, new talent acquisition, and geographical expansion into additional U.S. markets.

“The company will invest in new talent and plans to scale the staff by nearly 100% by the end of 2023 in the areas of Operations, Sales, Marketing, and Technology,” Steller said.

The company has a marketplace that addresses “maintenance at scale for the Single-Family Rental (SFR) market” and “the challenges that residents, property managers, and contractors collectively face” while claiming to serve “10 of the 11 largest SFR operators across 150,000+ properties.”

The SFR market, unlike build-to-rent, has a frequent inherent weakness of geographic scattering. At small scale, like for a mom-and-pop operation, that may not be an enormous issue. The more properties someone has, the more likely that they are at best scattered in a metro area, which complicates maintenance. Increase the number of holdings, and the result is a higher percentage chance that something needs addressing at more than one property simultaneously. That adds travel time for maintenance personnel resulting in more paid downtime.

Then there are the concerns on the part of contractors, which is getting valuable work at a good rate and not having to spend too much time and effort in looking for work.

Residents have the third leg of the problems stool. When something is wrong, they want to

“The equity financing round positions Stellar to enhance its platform which leverages artificial intelligence and machine learning to enable property managers and contractors to successfully resolve home maintenance issues, giving residents peace of mind,” the company says. “Unlike local contractors, Stellar uses technology to make the maintenance experience seamless, simple, and scalable. Work is completed with integrity and heart and quality is guaranteed.”

Which does raise some questions, because ultimately work is done by local contractors and the addition of software alone doesn’t assure how well people carry out tasks.