Just over a year after property tech startup Zeto launched with support from serial entrepreneur David Cummings, the company has shut down.
While the company was profitable, Atlanta Ventures didn't see a fast growth potential, said Jon Birdsong, a partner at Atlanta Ventures.
Zeto originally started as a home management company that helped owners take care of residences’ maintenance needs. Homeowners could’ve become members for up to $300 a month. Members could text what they need and the startup would book a service expert or professional.
“Every home had a unique set of customized problems, and that proved challenging, not only to execute, but also for gross margins,” Birdsong said. “Some people want sprinklers fixed, some want doors fixed, there wasn't a one-size-fits-all solution that made economic sense.”
Now, Zeto is going in a new direction. It will pivot into a security services startup focused on both commercial and residential buildings.
Zeto founder and CEO Christian Ries will lead the new iteration of the company. The team is researching customer demand and proactive security technology. Within the year, Zeto plans to launch its new business model. A name for the company or specifics on its services has not been determined.
The U.S. is behind on security technology compared to others where crime is higher, Ries said. The new startup is interested in providing software that alerts homeowners about perpetrators as soon as they’re on the property, opposed to “reactive” technology like Ring LLC that makes notifications on threats already taking place, he said.
Atlanta Ventures Studio
Zeto launched out of Atlanta Ventures Studio, an incubator program that accepts early-stage startups with high growth potential. Atlanta Ventures provides an initial investment and resources to the company, such as marketing help or advice. In exchange, Cummings, founder of Atlanta Ventures and Atlanta Tech Village, becomes a co-founder of the company.
The studio program has been successful so far. It incubated sales engagement startup Salesloft, which has surpassed a $1 billion valuation, marketing technology startup Terminus, which has a global presence, and landscaping robotics startup Greenzie, which recently raised $8 million. Tech-enabled Intown Golf Club is also in the program.
The program’s goal is to create a business with $100 million in revenue within 10 years, Birdsong said. Zeto's original business model didn't fit those projections.
Zeto's startup journey
Zeto was founded by Ries in April 2021 after becoming an entrepreneur in residence at Atlanta Ventures. In March, Atlanta Business Chronicle selected the startup as a Startup to Watch.
Cummings previously told Atlanta Inno that Zeto’s potential came from Covid’s reshaping of society around the demand for single-family homes and remote work.
There's still potential for a strong business around the original model, Birdsong said, but not right now.
“You can build a great, profitable lifestyle business with Zeto and there is unquestionable demand,” said Birdsong. “It's just the unit economics, gross margins and the ability to scale we're limiting.”
Zeto had five employees and 60 customers by the time it closed, Ries said. Its staff has since found other work.
Entrepreneurs often have to be flexible to changing market conditions and demand as they try to start new businesses. Ries' first business, another property technology startup called Jonny On It, also folded because of the Covid-19 pandemic.
