A/O PropTech’s Series C Investment in Plentific

A/O PropTech’s Series C Investment in Plentific

Today, Plentific announces a $100mn funding round, a massive milestone for our portfolio company and another step forward on their journey to revolutionize property management globally.

For us at A/O PropTech, this also marks an important moment as Plentific was our first substantial investment, so I thought it would be opportune to take a trip down memory lane.

On meeting Cem and Emre, the Founders of Plentific

I met Cem and Emre in late December 2018 as they were closing their Series A round. I was struck, not just by their maturity, humility, and resilience, but by the crystal clear ambition they had for the firm. This was a business that had to iterate from B2C to B2B and was embarking on a new strategic route. I was inspired by their vision, their ambition, and their mission.

I knew I had stumbled upon a very special team with a brilliant vision and the ability to execute that vision. Although we were not in a position to invest out of our fund (which was not closed yet), I knew this was not an opportunity to miss. It took some effort and creative structuring (warehousing the investment with one of our LPs), but by early 2019 we became insiders and ready to work towards understanding the intricacies, challenges and opportunities of the business deeply and give it the full support of our combined expertise and LP portfolio access.

We soon embarked on a pilot with one of our LPs in Germany, in the town of Halle, to be exact. We deliberately chose a challenging pilot in a new, non-anglophone country and a mid-tier city where marketplaces are harder to build than in the likes of London or Berlin. If you are to conquer the world, you will have to do it everywhere, not just where it’s obvious and easy.

It didn’t take long for Plentific to prove my instincts correct with successful deployment in a 5,000 unit pilot in unfamiliar waters. For reference, today, Our LP is still a customer, and at the time of writing this, has about 70,000 units in deployment with Plentific.

By the time we had progressed on the pilot deployment, we had closed our fund and were ready to invest out of the new vehicle.

On A/O Leading the $32mn Series B

Cem, Emre, and I sat down together and discussed the next stage in the company’s growth journey. Together, we determined that we had enough validation and conviction to double down on this new strategy and go-to-market combining the best elements of enterprise SaaS and managed marketplaces. I had displayed a sampling of A/O’s value and stewardship, and the founders chose us to lead their next round. This strong alignment and purposeful planning saved valuable time and effort in a pivotal funding event.

We were joined by our dear friends and brilliant investors, Target Global, enabling the successful completion of a $32mn round. The first truly institutional round for the company and the beginning of a new era for the business.

What is Plentific about

It’s very easy to see why Plentific has so much potential given the obvious pain points they are solving for all the stakeholders involved and their ability to position themselves as an undisputed platform that connects a vertically and horizontally fragmented market. But the company’s value goes far beyond the obvious, and I am particularly excited about the many things Plentific is building.

Property management is analogue at best, and Plentific’s software platform makes asset and property management more efficient and scalable in many ways:

  • Plentific offers a complete and seamless customer experience which is intuitive, comprehensive, and highly scalable for landlords to view all of their units, gather crucial data and insights for management to handle maintenance requests and communicating with tenants.
  • I have seen it first-hand. No one else in the market provides as comprehensive and efficient an experience for landlords. This customer-first approach enables the company to build the right features and products and continuously expand an unbreakable bond with their customers, with virtually unlimited cross-selling ability.
  • Plentific’s ability to attach new products over time creates a unique compounding LTV advantage. With growing ACVs, Plentific can be more aggressive on customer acquisition if needed, increasing the barriers to entry and further cementing their global leadership position.
  • By owning both the operating system and the system of record, Plentific is uniquely advantaged to attach a wide range of software and fintech products over time (financing, insurance, payments, compliance, procurement, ESG rating, etc.). Plentific can serve as the one-stop-shop and, more importantly, the single source of truth.
  • The Plentific marketplace, which aggregates both landlord demand and supply of home services providers, is truly unique and will be a powerful acquisition tool over time. Service providers have access to jobs that landlords create and landlords have a unique supply advantage of working with service providers that are already on the platform.
  • Last but not least, Plentific is working towards creating a marketplace of products dedicated to the service providers on the platform that will enable Plentific to continue its platform player expansion, capturing more of the entire lifecycle value chain, more data, and in turn, creating the future of property management.

Today, Plentific services some of the largest institutional landlords in the UK and Germany, both in the public and private sectors. The company is on its way to 500,000 units and tens of thousands of contractors on the Plentific platform, tripling last year and on course to triple again this year. Even so, the company has only begun to scratch the surface of a large opportunity. The global market for annual residential repairs and maintenance is estimated at around $760bn, with institutional customers representing around $56bn of this spend. As this wallet represents maintenance and replacement capital expenditure, it is often not discretionary, and it is no surprise that despite the pandemic, the company has had no customer churn and continues to have increased retention rates as they expand and in my opinion, this is just the beginning. The combination of powerful network effects, a maturing customer base, and an increased necessity for automation, digitization, and transparency creates a global and exponential opportunity. The next stop is the US, where Plentific officially launched a few weeks ago and where we expect the company to take the market by storm.

ESG

Plentific is very much focused on ESG by enabling landlords to support the local communities surrounding their assets through their marketplace and access jobs and revenue they would have never been able to otherwise. This is part of an important mindset where landlords have to be increasingly mindful of their buildings’ impact on our society and our environment. With a more automated, transparent, and curated workforce, landlords can process important Capex programs to support retrofitting of their buildings to accelerate their decarbonization. Plentific plays a key role in enabling, accelerating, and supporting critical initiatives within and around the buildings they service. Because profit and purpose have to become synonymous, I am proud and inspired by the journey they are on.

Plentific’s new $100mn Series C round

Today, Plentific announces a $100mn round co-led by Highland Europe and Brookfield Ventures, with participation from Mubadala, A/O PropTech, and Target Global. This is a huge milestone for the company that is expanding its footprint into the US and expanding its product suite exponentially. This follows a very competitive process where Plentific had the luxury to choose from best-in-class investors to support their vision. The founders have chosen to maximize for quality rather than quantity, and that is a sign of their maturity, the confidence they have in their mission, and the path they are on.

With this consortium, not only do we get some of the smartest investors in the industry, we get additional expertise around SaaS, marketplace, fintech, and access to massive real estate strategic footprints with the likes of Brookfield ($600bn AUM of which $210bn of real estate) and Mubadala (estimated $250bn AUM). With this group, the founders have access to potentially more capital and are in an ideal position to execute their brilliant vision.

Plentific today closes one chapter and opens a new one filled with excitement, endless potential, and the sentiment that we are one step closer to revolutionizing real estate for the better.

A special moment for A/O

I was lucky enough to meet Cem and Emre when I was still fundraising for A/O, and they took a chance on me as much as I took a chance on them. I had no website, articles, or track record to showcase. All they had to rely on were my word, my vision, my passion and, more importantly, my heart. Plentific is our first and biggest investment. We remain the largest shareholder (when considering our first warehoused check), and we are honoured to continue supporting them. Highland Europe and Brookfield are inspiring investors whom I respect and value tremendously. Seeing them further validate what I saw two years ago tell me we are onto something special as a firm, and we will endeavour to continue following our heart and our passion.

When Cem & Emre signed our Series B term sheet, I told them this was a marriage, where our respective success would be tied together- so they should know that I would never let them down and we were part of the same family from thereon. Today, I am more excited about this partnership than I have ever been.

Onwards and upwards!

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