An Overland Park-based property tech company closed on a $3 million fundraising round after a pivot to focus on its ideal customer skyrocketed revenue by 300% last year and made the business profitable.
"Now we need the capital to just scale and pour fuel on the fire," Lula co-founder and CEO Bo Lais said.
RET Ventures is helping the startup do just that. The Utah-based venture fund led the round for Lula, which developed a technology platform and vetted service provider network to help property managers manage maintenance at single-family and multifamily sites. Lula's services now are available in 12 cities, including Kansas City, Denver, Atlanta and Dallas.
Ripe for opportunity
RET invests in the next generation of real estate technology. Its strategic investors own or manage more than 2.4 million rental units and represent $600 billion in real estate assets.
"There is no better strategic investment in our eyes," Lais said. "It's already opening more doors. We're already having meetings with some of the largest property management companies in the U.S. for potential pilots."
Lula also is talking to RET's portfolio companies about potential partnerships.
The startup employs 12 but plans to use the funding to hire as many as 35 by year's end in roles such as sales and project coordinators. It recently hired its first chief data officer, Laxman Degala, who will help Lula identify ways to leverage its data, such as tapping into the biggest needs of property managers.
Lula also brought on co-founder Will Parrish full-time as COO in January and hired its first customer sales acquisition representative two weeks ago. Parrish most recently was a national sales manager for Thomson Reuters, and Lula already is reaping the benefits of his active involvement in the startup, Lais said.
The company plans to continue enhancing its product and projects that this year's revenue will be two to three times what it achieved in 2021.
"We're bringing on customers left and right," Lais said.
Finding a new niche
Lula primarily targeted homeowners previously and was spending "a lot of money on marketing and getting very little penetration," Lais said during a previous interview.
Often, entrepreneurs "battle themselves" and think they just haven't approached a market correctly or aren't trying hard enough, said Joni Cobb, former Pipeline Inc. CEO and current chair of the Center for American Entrepreneurship. But they need to focus on where they can get the biggest bang for their buck, she said.
"The one resource that is absolutely finite is time," Cobb said. "In the end, wisdom usually prevails for those entrepreneurs who are successful, that it's just time to cut ties with that effort because it's distracting them from the really profitable and productive part of their company."
When Lula, a Pipeline fellow, took a hard look at the business, it discovered that 80% of job orders were coming from 10% of its customers — property managers. So in 2020, Lula nixed its homeowner base to catapult revenue.
Lula offers more than 37 maintenance services for property managers and provides software to streamline the process and provide real-time updates on service calls and completed tasks. What really gives Lula the edge, Lais said, is pairing that software with a vetted service provider network.
It also uses artificial intelligence and natural language processing with some human interaction to "de-escalate" service calls. Some maintenance requests, for example, don't require a service provider because they're simple fixes that the renter can handle. For common issues, Lula sends how-to videos with steps for tenants to try first before it dispatches a service provider. A hot water complaint, for example, can be as simple as checking whether the pilot light went out.
"On the front end, we try to provide cost savings opportunities before the work order ever goes out to our network," he said. "That's something we're really prideful of."
