Lovely, the apartment search service that was initially built as a better and easier way of finding available apartment rentals originally listed in the large-but-feature-light Craigslist.org, has now racked up 4 million proprety views on its site (1 million in the last 30 days), with over 1 million active rental listings on the site, as it tackles the $10 billion residential rental market as an aggregator of other rental listings services — once described to me by founder Blake Pierson as the “Kayak” of rentals.
Now it is raising money for a Series A round — amount still unspecified – to add to a previous angel round of $2 million from investors that include Keith Rabois of Square; Ben Ling (formerly of Badoo and Google), Walter Kortschak (Summit Partners), Tom Byrne (Loopnet), Colin Evans (Stubhub), Alex Zubillaga, 500 Startups, Felicis Ventures, Founder Collective, SV Angel and others.
The startup has come a long way so far in its goals — even if some of that change has been forced upon them.
When Lovely first launched in 2011, it got all of its data via an agreement with 3Taps (also one of the company’s backers), which was sourcing Craigslist to get that data. 3Taps, as you may already know, is now being sued by Craigslist for unauthorized use. Craigslist has also been extending that suit to cover companies that use 3Taps’ feed. So Lovely is doing the sensible thing: it is diversifying as fast as it can away from there.
It is now aggregating some 50+ different rental listings services, and that number is continuing to rise. Whereas before 3Taps provided 100 percent of Lovely’s listings, it now provides less than 40 percent, and the proportion is continuing to drop. (And for what it’s worth, we understand that 3Taps is also changing how it collects data.) In some markets, like Los Angeles where it recently added Westside Rentals to its service, Lovely now claims to be the most comprehensive search site of all — a template it wants to repeat elsewhere, as it gears up to compete more against — yes — Craigslist, but also other disruptive startups like Zumper.
Lovely’s expansion to include more features also means that it is taking on a new startup role model.
If it had an ambition to become the Kayak of rentals, it’s now looking more like the industry’s Airbnb: adding to better maps and an iOS app that has seen 65,000 downloads since launch in mid-November, it is also testing out better ways of connecting renters with properties along with other extra features around the core experience of rental data.
Lovely is completely free to use for renters; on the supply side for larger property managers the idea is to work on a per-lead or per-lease basis, with $300-400 dollars for each signing or $30-40 per lead.
Overall, the company is working on revenue from a couple of different areas. The first and main one is making money every time it facilitates a transaction — with the transaction happening directly on the site rather than elsewhere. This is different from the Zillow model of charging for the listings themselves. The idea, Pierson tells me, is to stay “motivated to connect the best renter with the best apartment, not necessarily promote apartments to them that don’t.” The site currently has 225,000 monthly active users that view 50,000 rental listings daily, with more than 750 leads generated every day.
Coming up later this month/early February, it also has plans to launch a “pro” version where landlords can post listings directly to the site, and also provide information to landlords about local laws.
“In San Francisco, for example, where landlords have to deal with highly regulated different laws and regulations, we are trying to build up a knowledge base of experts, including lawyers, leasing agents and more.” You can see how this could also become a resource for renters — again thinking about the Airbnb model here — and extend to include a place to store your profile as a renter to quickly submit applications to several agencies. All these can help make Lovely a place that people are more likely to return for future rentals.
It’s already testing ways of shaping searches with a “featured apartments” listing on its website for the most popular and highest-rated landlords, which will be rolled out more fully with the Lovely Pro version later in the year. These features will also inevitably end up on Lovely’s mobile services, too: these already account for two-thirds of all of the company’s traffic.
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