Affordable housing tech startup PadSplit is expanding into Houston after raising millions in venture capital.
The Atlanta-based company, which rents out rooms in converted single-family homes and apartments, has inked a deal for $10 million in a Series A round led by Core Innovation Capital, with Alate Partners, Citi, Kapor Capital, Impact Engine and Cox Enterprises also chipping in, the Atlanta Business Chronicle reported.
At a time when housing and rental prices are soaring, PadSplit’s focus is on a segment of the housing market that has been widely neglected amid a surge in upscale and luxury condo, apartment and single-family home construction: renters earning less than $35,000 a year.
Overall, nearly half of all renters in the United States spend more than 30 percent of their income to keep a roof over their heads, a 2016 Harvard study found.
The company currently has a portfolio of 1,000 rooms in Atlanta and has been pushing into Maryland as well, with plans to use part of its new, $10 million round of investment capital to enter the Houston market as well.
PadSplit rental rates in Atlanta range from $140 to $250 a week, according to TechCrunch. The homes and apartments rented out by PadSplit include furniture, utilities, Wi-Fi and laundry, as well as “telemedicine and credit reporting for all on-time payments,” according to the Atlanta Business Chronicle, citing a company press release.
With the new round of investment capital, PadSplit also plans to hire up over the next year, adding jobs in marketing, customer, service, as well as product, sales and launch teams, Founder and CEO Atticus LeBlanc told the Atlanta newspaper.
“We are focused on markets that have high areas of need and available inventory," LeBlanc told the Chronicle. “Houston is a great example of a progressively minded city that is actively working to create affordable housing solutions. Part of our current technical focus though is to allow housing providers anywhere to be able to onboard listings independent of our boots on the ground, while we can still provide the services and partnerships necessary to support low-income workers.”