PadSplit, an Atlanta-based affordable housing tech startup, has raised $10 million in a Series A round. Core Innovation Capital led the round, followed by Alate Partners, Citi, Kapor Capital, Impact Engine and Cox Enterprises.
The funding will primarily be used to bring PadSplit's affordable housing model to more people, cities and property owners. Founder and CEO Atticus LeBlanc said the goal is to help more people, especially at a time when millions are facing housing insecurity.
"I don't think anyone thought 2020 was going to be the roller coaster that it has been, but being mission driven has kept us motivated and moving forward during these challenging times," he said. "We know that when we succeed, we're able to generate transformational life impacts."
LeBlanc said the company would be hiring as a result of the raise.
"Over the next six to 12 months, we will be expanding opportunities for a number of roles, including product, sales and launch teams, operations, customer service and marketing," he said.
PadSplit uses existing housing stock to convert single-family homes or apartments into shared housing for workers and retirees earning less than $35,000 a year. Room rates range from $109 a week and include furniture, utilities, WiFi, laundry, 24/7 access to telemedicine and credit reporting for all on-time payments, according to a news release.
To date, the company has more than 1,000 units in the Atlanta area and will continue to grow locally. LeBlanc said the startup plans to expand to new markets, including Houston.
"We are focused on markets that have high areas of need and available inventory," he said. "Houston is a great example of a progressively minded city that is actively working to create affordable housing solutions. Part of our current technical focus though is to allow housing providers anywhere to be able to onboard listings independent of our boots on the ground, while we can still provide the services and partnerships necessary to support low-income workers."
The company reports its member profile includes "essential" community workers, including teachers, grocery store and restaurant staff and retired veterans. The average PadSplit member earns about $25,140 in annual income with an average age of 39 (residents range from ages 19 to 77). The racial background of its member profile is 97.5% Black.
PadSplit has helped residents save an average of $516 a month and more than $203 million for taxpayers in capital subsidies alone, according to a news release. The company claims it has increased revenue for property owners by 60%.
In addition to the startup's growth to other cities, PadSplit announced it will continue to partner with nonprofits that house vulnerable individuals, offer emergency financial assistance and launch an employment assistance program to support its members during the Covid-19 pandemic.
"Through this initiative, called 'Starting Point,' nonprofits and government agencies are able to more quickly identify housing opportunities for their clients and save on placement costs," LeBlanc said.
PadSplit was founded in 2017 and employs 46 people. The new raise brings the company's total funding to $14.6 million.
"The rest of 2020 is about operational execution and expansion for us, especially at a time when the pandemic and economic fallout are leading to housing insecurity for millions of people -- many of whom we now deem 'essential workers,'" he said. "PadSplit believes the individuals who serve our communities also deserve an opportunity to live in them. That unfortunately hasn't been the case for quite some time, but the rest of the country has now been exposed to this reality."
