The real estate technology, or proptech, sector has experienced significant growth with numerous startups aiming to revolutionize the home buying and selling process. Some focus on distressed properties, while others utilize the “iBuyer” model – purchasing, renovating, and reselling homes to buyers seeking move-in ready options. However, the majority of home sales still occur through traditional methods, facilitated by real estate agents working under a broker.

Today, a new company is announcing the completion of its seed funding round, not to disrupt this established system, but to enhance it by offering a more adaptable approach that empowers agents to operate more effectively and ultimately expand the number of professionals in the field.

Avenue 8, which identifies as a “mobile-first residential real estate brokerage,” is introducing a new suite of tools designed to help agents source, list, and sell properties, as well as manage all related tasks. The company has secured $4 million in seed funding, which it intends to use to broaden its reach in existing markets – currently in beta testing in the San Francisco and Los Angeles areas – and extend into several new cities.

The investment is particularly noteworthy due to the prominent investors involved. The round is led by Craft Ventures – a firm established by David Sacks and Bill Lee with a strong track record of successful companies – and includes participation from Zigg Capital and Good Friends, an early-stage fund founded by the creators of Warby Parker, Harry’s, and Allbirds.

Over the past decade, proptech companies have collectively raised over $18 billion, resulting in numerous attempts to integrate technological advancements – from cloud computing and mobile technology to artificial intelligence, data science, and e-commerce innovations – into the real estate market.

Michael Martin, co-founder of Avenue 8 alongside Justin Fichelson, emphasizes that the rapid pace of change necessitates a continuous evaluation of new strategies.

“It’s crucial to remember that Compass initially focused on deploying its technology within traditional brokerages,” he noted, referencing a major player in the industry (which has also encountered its own difficulties). “However, if that approach were to be developed today, it would look considerably different.”

He posits that this “different” approach closely resembles Avenue 8’s model.

The startup operates on a subscription basis, diverging from the conventional 30/70 commission split typically seen between brokers and agents.

Building upon this foundation, Avenue 8 provides agents with a user-friendly platform featuring advanced marketing and analytics tools to promote properties across various channels, measure campaign performance for future improvements, and access comprehensive market data for informed valuation and sales decisions. It also offers a network of professionals – valets – who can assist with property staging and photography, with payments only required upon a successful sale.

This comprehensive service is delivered through a mobile platform, a key feature for professionals who are frequently on the go. 

Avenue 8 is geared towards agents who have historically relied on the tools provided by their brokers – often limited to company websites and aggregated property portals – and offers not only improved financial outcomes but also a streamlined process to achieve them.

“We consistently hear from agents about the challenges they face in identifying and utilizing the technology and tools needed to effectively manage their client relationships and properties. Evolving buyer and seller expectations are accelerating the digital transformation of agents’ workflows,” stated Ryan Orley, partner at Zigg Capital. “Avenue 8 is developing and integrating the appropriate software and resources for the current market landscape.”

A particularly compelling aspect of Avenue 8 is its potential to broaden access to the real estate profession.

The real estate market has demonstrated remarkable stability throughout the pandemic, driven by lower interest rates, limited housing inventory, and increased time spent at home, leading to heightened demand. In a climate where many industries are facing challenges, Avenue 8’s flexible platform allows individuals who have met the necessary qualifications to become agents to register and work on a flexible schedule, effectively creating a “Uber for real estate agents.”

This scalability is likely a key factor in attracting investor interest.

“Avenue 8’s organic growth clearly demonstrates the market’s demand for a mobile-first, digital platform,” said Jeff Fluhr, general partner at Craft Ventures. “Michael and Justin have a clear vision for modernizing real estate while prioritizing the needs of agents. Avenue 8’s model enables agents to maximize their earnings even in an environment of decreasing commissions.”

Interestingly, mirroring the impact of Uber on the transportation industry, Avenue 8 is gaining recognition within the real estate market. Initially targeting agents with the promise of being a “better broker” – providing the services of a brokerage with a modern interface – the company is also attracting attention from existing brokerages. Martin mentioned that they are already collaborating with several smaller firms and may explore options for providing their tools to larger organizations to enhance their operational efficiency.