Startup du jour: MyNewPlace
STARTUP: MyNewPlace, based in San Francisco
ELEVATOR PITCH: MyNewPlace wants to be the Zillow or Trulia of the rentals market – bringing searching, mapping, and additional information to consumers via snazzy web tools.
WHAT THEY DO: U.S. apartment rental listings, very similar to Rent.com (owned by eBay). Makes money by charging property owners for rentals found through the site.
PEOPLE: CEO John Helm, founder and CEO of AllApartments/SpringStreet (sold to Homestore/Move).
FUNDING: $20 million in two rounds, including a $12 million round to be announced Monday, from VC firms Sutter Hill Ventures, Split Rock Partners, Trinity Ventures, plus real estate industry companies United Dominion Realty Trust, Essex, The Lane Company, ConAm, and Marcus & Millichap.
KEY CUSTOMERS: Large property management companies, other property owners. The 50 largest owners and management companies only control less than two million of 37 million rental properties in the U.S., so it’s a pretty fragmented market.
COMPETITORS: Rent.com, which also has a pay-per-performance business model, and ad-supported sites like Apartments.com, ForRent.com, and Move.com’s rental section.
THE DEAL: MyNewSpace is not for cities like San Francisco or New York, where Craigslist is king and rent control limits apartment turnover. Helm says his target user is a recent college grad moving to Atlanta to take a job at Coke who wants to post photos of her new apartment on her MySpace.
MyNewPlace was started at the behest of its real estate industry investors, who, as Helm puts it, wanted to see another company in the space. The advantage of the site is supposed to be its map-based display (a Google Maps mashup), flexible search features, and lack of advertising. However, in our testing searching and sorting weren’t spectacular, and many of the listings were pretty bare bones.
The company is aiming for the pool of 37 million U.S. apartments, of which it has six million listed on the site. “It’s kind of a go-big-or-go-home business. You have to get to critical mass quickly. And to that you’ve got to spend a lot of money,” says Helm. At the same time, he claims the latest funding was not needed, and was offered preemptively by new investors Sutter Hill and Split Rock.
Basically, MyNewPlace wants to be the Zillow or Trulia of the rentals market. In the contentious home sales space, brokerages aren’t quite sure how much they like web startups. MyNewPlace, on the other hand, is a total insider deal. That means the company’s not going to rock any boats – but its claim of superiority based simply on baking in new web tools is something we’ll have to keep an eye on.
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In the Northern VA area, HotPads.com is another early stage company doing interesting work in the rental market.
If they had taken $2 million in funding, or even $5 million in funding they might be acquired. But by taking $20 million in funding, the buyout price will have to be astronomical. From a development stanpoint, this sounds like a sub $1 million project.
Plus they don’t own the technology of their key differentiator, Google does.
I’m shocked this company gets any PR coverage at all. What a cynical business model: hey’s let’s copy Rent.com. They got acquired for 10X revenue, so will we!
RelocationCentral, owned by CORT, owned by Birkshire Hathaway, bought a chain of apartment locators a few years back and in the past 12 months, launched ApartmentSearch.com.
They’re offering a $200 renter reward they have a major head-start on enrolling properties since they have boots on the ground in major markets nationwide.
They’ll be a formidable competitor to both MyNewPlace and Rent.com.
The big question is will these sites destroy their industry through a price war… lower commissions for properties (less revenue), bigger renter rewards (higher costs), more aggressive PPC spending (higher costs).
My guess is Rent.com/eBay is in the best position to win this war since they can sign much bigger ad deals with the portals, and thus keep some modicum of profit.
Forgot to add these two:
http://www.eliterenting.com
http://www.rentmoney.com
for all this VC money, why are they not even in google’s index?
http://www.google.com/search?q=site%3Amynewplace.com
seems very strange.
I find the site so sllooowww it is too painful to use, perhaps that is why they are not in google.
Rent.com is actually somewhat of a failure as a product (Seriously).
The “Big Boys” have learned their lesson and I would be shocked to see them acquired or go the way of Rent.com in regards to acquisition ROI.
The funding behind this is too large and the market is already crowded. I’m amazed by the rate of funding in the industry, things can be completed much cheaper now. YouTube is one of the few exceptions.
techcrunch has a category for future companies like this…it’s called the dead pool.
You need to register to view any detail about properties in the search result list? That is a terrible user experience. Their buiness is keeping information away from their users. That can’t be good.
Hi Liz – The one site you forgot to list is the most obvious: ApartmentSearch.com. They are the only ones I know of that have both a presence on the Internet and have local offices. When we moved in 2002 they actually picked us up from our home and drove us around to look at different communities. Rent.com and the others all 100% Internet plays with zero capabilities to actually help when you need more than some lame-o web 2.0 mapping feature (which they have too by-the way…and they pay a higher kick-back [or reward] when you move in). I read that ApartmentSearch.com was recently acquired by Berkshire Hathaway. So mynewplace can’t brag about a wee little funding round when Warren Buffet is “the” Mac-Daddy investor and he put his money with ApartmentSearch.com. The bottom-line is mynewplace.com is just another dead-end like DrKoop.com, Garden.com and Furniture.com were.
Just my two-cents!
I think http://www.BidRent.com is probably the most superior start up. MyNewPlace is nothing to compared to these guys. I think bidding on rental prices is where its as. Rental prices should be a marketplace.