To help mom and pop landlords more easily manage their properties and tenants, Chicago startup NestEgg is building a software to assist with getting those tasks done.
The startup, which launched last year in the Windy City, is an online platform that allows landlords to collect rent, manage maintenance requests, and streamline mortgage and loan payments.
NestEgg was co-founded by CEO Eachan Fletcher, who was formerly the chief technology officer at Expedia. Fletcher also held roles at Betfair and Hotwire, which was eventually acquired by Expedia.
After accumulating a couple properties in San Francisco and becoming a landlord himself, Fletcher quickly realized the common challenges that came with the job, whether it was collecting rent on time or addressing maintenance requests quickly.
“The income is actually not as reliable as it appears on the surface,” Fletcher said. “And that’s particularly true now with Covid. If you have a couple of unexpected maintenance items during the month, you might have to sit on them for a while to wait for one more rent check to come in."
NestEgg’s other founders include Amie O’Donohue and Jeff Slipko, who also previously worked at Expedia.
“We tried everything else out there on the market today and we couldn’t find anything that directly dealt with the frustrations that face independent landlords,” Fletcher said.
To help make his and other landlord’s lives easier, Fletcher began building a management software that is now known as NestEgg and used by 2,000 property owners.
One of the startup’s most useful features is that it works with tenants to collect rent on their pay schedule, which helps landlords protect themselves from missed payments. Using this method, landlords are able to receive full rent on the 1st of every month because tenants have been paying into the system throughout the previous month.
NestEgg also allows landlords to make mortgage payments directly in the app using rental income, and seamlessly schedule maintenance repairs. As opposed to tenants contacting landlords directly, they submit requests to NestEgg’s platform, which then schedules, coordinates and pays repair workers, taking that busy work off the landlord’s plate.
Though he lived in San Francisco for a number of years, Fletcher decided to launch NestEgg in Chicago because of its diverse landlord makeup. Many apartments in the city are owned by independent landlords rather than commercial rental companies, he said.
“Our target market is mom and pops with families and day jobs, owning one to 10 units,” Fletcher said. “That’s the big market that’s really underserved and needs a lot of help.”
“Chicago stood out as being a city with the best mix,” Fletcher continued. “The majority of the rental properties in the city outside of the downtown area are all single-family and small multi-family properties.”
By “cherry-picking” some colleagues from Expedia to form NestEgg, the startup has been able to grow quickly, Fletcher said. It now employs 19 people and business has been growing 30% month-over-month even through the pandemic.
About 80% of NestEgg’s landlord clients are based in Chicago, but the company has recently started ramping up marketing elsewhere as it works to grow its national footprint. To help it expand, NestEgg has raised about $3 million in funding from investors like Bonfire Ventures, BAM Ventures and Financial Venture Studio.
NestEgg isn’t the only DIY landlord software startup in town. Livly, which launched in 2017 to be a one-stop-shop to help property owners manage their rental properties, raised $8 million earlier this year to grow. Chicago startup Avail also helps landlords collect rent and manage maintenance issues, and has raised nearly $10 million to date, according to Crunchbase.
