Alfred arrives with up to $75 million USD for staffing up, new acquisitions.
The latest excursion into Canada from a United States-based tech firm comes from proptech startup Alfred.
Alfred said it’s expanding across Canada following a recent strategic funding round led by Rialto Capital with participation from NEA, 166 2nd Financial Services, Holland Management and others.
Greystar founder and CEO Bob Faith; the founder of Grubhub and Seamless, Jason Finge; and RKW co-founder Jay Massirman also participated in the round.
The funding consisted of a $50 million USD initial closing and access to up to an additional $75 million USD for future acquisitions. Alfred declined to disclose the nature of the additional $75 million, whether it is primary or secondary funding or a debt facility.
Alfred did not disclose the date the round closed, but said the money was net new.
A portion of the $75 million USD will go toward setting up a Canadian headquarters in Toronto as well as scaling up a team, Alfred president Arik Benzino told BetaKit.
Benzio did not disclose how many employees the startup plans to hire, only that they will be across multiple roles. However, according to The Globe and Mail, Alfred will hire at least 75 employees in Canada.
Alfred offers a residential management platform that includes resident management and communication, management of on-site operations and maintenance, payments, and community and resident wellness amenities.
Alfred plans to pursue growth across the multifamily and single-family rental sector. The Canadian expansion will be led by Stephen Tapp, previous head of WeWork Canada, who oversaw the operation and growth of that business unit with Benzino, who was formerly president and COO of WeWork.
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This team, which scaled a similar offering in the commercial real estate industry in Canada, is reuniting to do it again within the residential space.
The expansion builds on Alfred’s May 2021 acquisition of Canadian company HOM, a wellness and events platform founded by Francesca Loftus, with operations in Toronto and Vancouver in addition to core US cities.
The recent round, announced March 8, coincided with the announcement of Alfred’s fourth acquisition, RKW Residential, a property management firm in the Southeastern US.
Launched in 2015, Alfred claims to serve over 143,000 units across 44 markets in the US and Canada.
Alfred comes into a competitive Canadian proptech market. Four out of five Canadian proptech startups are located in what the report called Canada’s top five hubs: Montreal, Toronto, Vancouver, Calgary and Kitchener-Waterloo, according to the Proptech Collective’s 2021 report.
Notably, nearly half (46 percent) of all Canadian proptech companies are based in the Greater Toronto Area.
Among the most-funded proptech startups operating in Canada is Sonder, which began trading on the Nasdaq in 2021 after completing its previously announced business combination with Gores Metropoulos II, a California-based special purpose acquisition company.
Other large players in the Canadian market include Ecobee (which was acquired by US-based Generac in 2021) with $203 million to date, and Properly with $118 million to date.
And more American players are entering the market as well. San Francisco-based real estate tech firm Opendoor announced in 2021 that it was hiring some 100 product development engineers in Canada by 2026. Opendoor’s move is building on its acquisitions of the teams behind Toronto-based digital home remodelling company Skylight, and Seattle construction services firm Pro.com.
“We’re on a mission to transform the real estate industry and growing our footprint in Canada is essential to achieving that”, said Alfred co-founder and CEO Marcela Sapone, regarding his company’s place in the market. “As we open our first office in Toronto, we’ll be prioritizing hiring from within the community as well as partnering with forward-thinking property managers and owners who want to take a tech-first approach.”