Last week Reonomy announced $30 million in Series C funding, led by Sapphire Ventures with participation from existing investors Bain Capital Ventures and Softbank Capital. You can read the full press release here and catch up on some of the coverage via Twitter or LinkedIn.
I’d like to sincerely thank our customers, employees and investors for their partnership and support in reaching this milestone. What we’ve accomplished together is without a doubt cause for reflection and celebration. But I’m even more excited about what this funding round means for our future. I see this as rocket fuel to establish Reonomy as the data and analytics platform of choice in commercial real estate – a platform that drives incredible new value and creates new opportunities for our CRE customers, from commercial roofers to the world’s largest enterprises.
Catching Lightning in a Bottle—Twice!
When Charlie and I started Reonomy, our philosophy was to start small and focus on a specific niche. That seemed like the most sensible way to master a space. We gathered CRE property data in New York and initially gave it away for free so we could maximize the opportunity to get customer feedback and improve the product. It was painstaking work, but as we started getting traction in the world’s biggest and most complex commercial real estate market, we knew we were on to something.
The next step was to go national, but we realized pretty quickly that the “handcrafted” and bespoke way we’d gathered data in New York City simply wouldn’t be practical or cost-effective when repeated for hundreds of additional markets. (We’re talking about going from 320,000 properties in New York to a comprehensive national database covering roughly 50 million properties nationwide.)
We began curating a best-in-class network of data sources (public and private) to aggregate property information across the country. The data itself was solid, but it was messy and required a lot of work to unify it, clean it and organize it. We invested in technology and process innovation to curate and manage the data at scale, and in the process, developed a powerful data engine that propelled our success across a number of new markets and client segments nationally–at a pace and on a scale that, frankly, we didn’t anticipate. We’d caught “lightning in a bottle.”
Incredibly, the second bolt of lightning followed soon thereafter, as we realized the technology we’d developed to scale nationally also met a huge unmet need for an entirely new class of customers: large enterprises. That was the genesis of last year’s launch of our enterprise data services and API feeds, which have since opened the doors with enterprise customers who need great data, better tools and ultimately a faster path to insight. They have quickly embraced Reonomy’s Entity Resolution API to “weaponize” their own CRE data (e.g., cleansing, de-duping, normalizing), while tapping Reonomy’s huge database (100m+ companies and 150m+ people) for even greater insights into their respective markets.
Powerful Platform, Meet Network Effect
We started 2018 with a lot of momentum, adding dozens of enterprise customers and data partners – all with very interesting use cases for combining their data and tools with Reonomy data and tools to uncover new opportunities. We also raised $16 million in funding from Bain Capital Ventures and a few strategic industry investors, announced in February. Fast growth, happy customers, great team, cash in the bank – all good.
Enter Sapphire Ventures, whom we met last year and had been doing its own due diligence on the CRE market opportunity. In talking with customers, they heard great things about Reonomy and saw all the signs for a “platform opportunity” – combining innovative functionality with valuable data to drive change in a market. We didn’t need new money per se, but Sapphire knows platforms – and we agreed to double down with a Series C round to take full advantage of the opportunity in front of us.
This funding round validates the “hockey stick growth” we’re seeing as a result of being (a) the first mover, with (b) the best technology, and (c) the most comprehensive data set. Our data engine uses machine learning and custom algorithms to get smarter every day, finding patterns in CRE data that humans simply can’t. As more customers use the platform, everyone benefits from the “network effect” as the platform learns.
So what’s next for Reonomy? We plan to double our headcount over the next 12-18 months, hiring new people in engineering, sales, client success, and other departments. We will continue to invest in the platform by adding new data sets, building out our library of algorithms, extending the use cases for entity resolution, and creating new applications for different use cases. We will also pursue international expansion, starting with Canada and Western Europe in 2019.
With that said, our original focus will not waver – to establish Reonomy as the platform in commercial real estate, one that delivers ever-increasing value as we (and others) build new services and capabilities on top of the platform. I’m so excited for the next part of our journey.