Accounting Firm Secures $9M Series A to Automate Property Management

Proper Secures $9 Million in Series A Funding

Proper, a company providing automated accounting and bookkeeping solutions tailored for property managers, announced on Wednesday the successful completion of a $9 million Series A funding round. The investment was spearheaded by QED.

Investment Details and Previous Funding

This funding round saw participation from existing investors including MetaProp, Expa, and Bling Capital. With this latest injection of capital, the San Francisco-based proptech company has now raised a total of $13.8 million. Previously, Proper secured $4.8 million in seed funding last August.

The Founding Story and Identifying a Market Need

Mark Rojas, the CEO of Proper, brings a background in product development to his role. He established Proper in 2017 following a year and a half spent gaining practical experience within a property management firm. It was during this time that he observed significant deficiencies in the accounting processes, describing them as being in a state of disarray.

Rojas explained to TechCrunch that he recognized a substantial opportunity to address these issues. He noted that accounting often represents a critical, yet overlooked, component of property management operations.

Challenges Faced by Property Managers

“Property managers frequently lack formal accounting training, often possessing a real estate license instead,” Rojas stated. “This absence of specialized knowledge can hinder portfolio expansion or lead to operational breakdowns when attempting to scale.”

Proper’s Solution and Demonstrated Benefits

Proper’s service utilizes technology to streamline and automate real estate accounting tasks, particularly those that are repetitive. The company reports that property managers overseeing 1,000 properties can achieve 63% greater profit margins and reduce their accounting-related time commitment by 45% annually.

A Neglected Area of Proptech

Rojas believes that automation within real estate accounting has been historically underrepresented, with limited startup activity focused on this specific area. He views the broader proptech sector as still evolving, with innovation primarily concentrated on home buying, selling, and maintenance rather than financial management.

Currently, the industry lacks a dominant leader in accounting solutions.

Pivoting to Accounting and Rapid Growth

Proper strategically shifted its focus to accounting in early 2020, which resulted in “explosive growth” over the subsequent year. Rojas identified an opportunity to not only rapidly increase revenue but also to establish a sustainable and enduring business model.

“Given the immense value of real estate as an asset class, the potential scale of this industry is substantial,” he added. “The lack of direct competition allows us to aggressively pursue market leadership and capitalize on the existing high demand.”

Future Plans and Expansion

With the new Series A funding, Proper plans to prioritize operational improvements, continued product development, the creation of a new customer platform, and expansion of its team across various departments. The company experienced significant growth in 2020, increasing annual recurring revenue from zero to $2.3 million.

In 2021, Proper’s employee base grew from 15 to 120, with projections to reach approximately 200 by year-end.

Resuming Sales and Marketing Efforts

Proper temporarily paused its sales and marketing activities to facilitate internal scaling. Rojas is now prepared to resume these efforts and is enthusiastic about collaborating with QED, whose vision aligns with Proper’s objectives.

New Board Member and Expertise

As part of the investment, Matt Risley, a Partner at QED, will join Proper’s board of directors. Risley’s expertise lies in fintech, and he previously served as the Chief Financial Officer of Klarna, an e-commerce payment platform.

QED’s Perspective and Industry Recognition

Risley shared with TechCrunch that he initially connected with Rojas during Proper’s seed funding round and has been closely monitoring the company’s progress. He considers Proper to be a notable success story within the real estate industry, alongside established companies like RealPage, Yardi, and AvidXchange.

He engaged directly with small business owners utilizing Proper’s services and confirmed a strong product-market fit.

The Value Proposition for Property Managers

“We consistently observe that these business owners are deeply committed to delivering exceptional value to their clients and possess genuine expertise in their field,” Risley said. “Furthermore, we witness the significant relief Proper provides property owners and managers from the burdens of bookkeeping. Any solution that empowers small businesses to dedicate more time to the aspects they enjoy will be readily embraced.”