Andrew Dodson | July 25, 2019
For the first time in its nearly decade-old history, a Denver real estate-tech company has raised outside money as it looks to expand its interactive mapping technology that has been primarily used by apartment property management firms into other segments, including retail, industrial and the delivery economy.
Engrain, which employ 65 people today mostly out of its Denver Tech Center office closed on a seed round of $1 million earlier this month that’s going to allow it to hire on more people to expand the company’s mapping software. Up until this point, the company, which started as a marketing agency, has sold its suite of products — TouchTour and SightMap — to property management firms that use the white-label mapping technology on websites to show locations of apartment units, along with apartment photos and amenities. Those property owners can then embed additional data, like lease rates and dates and tenant information for their back-end operations.
The firm is now in conversations with a slew of industries and the seed amount, plus a future Series A round that’s targeted to be between $5 million and $10 million, will allow the company to expand quickly, said Brent Steiner, its chief executive officer.
“We’ve been able to self fund and still achieve double-digit organic growth profitably the entire time, but in the last three years … we’ve gained a lot of traction and we now need to grow mapping resources faster than we can grow organically,” he told Denver Business Journal.
There are obvious markets for Engrain to expand to, Steiner said, like self-storage centers, student housing and senior living — all similar cases that can use the company’s maps for marketing and better visualizing business data.
What has Steiner excited are the types of services that big companies, like Amazon, hasn’t quite figured out yet. The delivery economy, he says, is an opportunity for drivers to have property maps loaded on their phones so when they come to deliver a package to a condo or apartment building, they have an easy-to-read map that can direct them there.
The company is also in discussion with 911 dispatch centers and first responders for implementing similar technology.
“They can get to the apartment building, but something that Google and the large map companies haven’t really started yet is pinpointing those exact unit locations,” Steiner said.
To make that happen, multifamily properties would need to subscribe to Engrain’s service and then elect to have their maps available in other web services.
Retail is another interesting segment that is getting attention from other mapping platforms because of the opportunity to monetize the data behind where a product is located, Steiner said.
And then there are self tours, which would be another need for apartment property managers, as more potential tenants want the opportunity to tour a unit on their own time, Steiner said.
“All of those applications need maps, so we’re essentially creating this open-source platform to allow for things like that,” he said.
Real estate tech is a growing industry that’s gaining traction quickly as startups look to disrupt some antiquated components of traditional real estate. Zillow and Opendoor’s iBuying plays are good examples of consumers opting for the convenience the services offer over profits from home sales. Earlier this month, venture capital firm Fifth Wall closed on a $500 million fund that’s solely focused on real estate technology. It’s the largest fund to date with domestic investors including CBRE and Cushman & Wakefield.
The seed funding round allows Engrain to add a few extra employees, but the planned Series A round should help grow the business considerably, Steiner said. Commonwealth Ventures, an affiliate of Commonwealth Residential, which uses Engrain’s products for its multifamily developments in the Washington, D.C., metro area, and an investment group headed by Jessica Humphreys Baxter, Engrain’s vice president of strategic partnerships, led the seed round.
“Our confidence in Engrain and its current suite of technology not only stems from personal experience, but also our overarching belief in this company’s future as an innovator that will continue to move the industry forward across all sectors,” Brad Gilchrist, principal at Commonwealth Ventures, said in a statement.