Ryan Serhant is not a typical startup founder. This became apparent when a Netflix the team recorded our interview, which is strangely not a regular occurrence for Term Sheet. But as I learned while trying not to be distracted by the drone flying through Serhant’s office window taking wide shots, its fame is a feature, not a bug.
You may recognize Serhant’s name from Million Dollar Listing or his new Netflix series, Owning Manhattan. Or maybe you bought a condo from the man himself or one of his rapidly growing army of brokers, all operating under his eponymous real estate empire, which Closed the sixth highest number of residential sales in Manhattan last year, according to A real deal. (Serhant tells me he opens a new market about every 14 days.)
But now Serhant wants to position himself as a tech entrepreneur, raising $45 million from prominent New York venture firms Camber Creek and Left Lane Capital and launching an app called S.MPLE, designed to help brokers manage sales.
Most software founders gain fame from the success of their products, but from his SoHo headquarters, which greets guests with a giant statue of the letter S just inside the front door, Serhant makes a compelling case for why the reverse can also be true.
Through his reality shows and millions of social media followers, Serhant helped pioneer a new form of real estate sales, where brokers find buyers through virality rather than staid newspaper and Craigslist ads. Its average agent is 20 years younger than the industry average. “They only know their business through social networks,” he tells me. The number one lead generator? LinkedIn.
Serhant describes S.MPLE as “Instacart for sellers” (See, he really is one of you.) It wasn’t his first foray into real estate-focused tech development, including an aborted metaverse platform called UNIVERS and a real-time video-editing app called Spaces, which never took off left with his agents. “I called them missteps,” he says. “I had to go through that process.”
S.MPLE came as a learning from its second attempt – that people want to spend less time in front of screens, not more. The app allows brokers to automate parts of their sales process, from listing to communication. Rather than your typical SaaS product, the real innovation—like Serhant’s brokerage business—is its distribution funnel. Every aspect of his business, from social media to reality TV to actual real estate sales—works as a flywheel to generate more business. “Our customer acquisition cost is close to zero,” he tells me. “If a significant amount of your dollars are going into Meta ad spend or figuring out how to take a product and create distribution, it’s just a tough race.”
Serhant says it has been profitable from the start and is bringing in venture capitalists because of the help they can provide from a strategic partnership perspective, with Left Lane Capital known for its consumer-focused portfolio and Camber Creek focused on real estate technology. Both companies recognized Serhant’s “inherent value,” as Left Lane Capital’s Harley Miller describes it. “It made investors like us wake up to the power of this distribution and what a great value driver and unique competitive moat it can be,” Miller tells me.
Jeffrey Berman, partner at Camber Creek, says the most successful companies in his portfolio have “cracked the code” of the business-to-business-to-consumer model. It highlights rent payment platform Flex, which caters to multi-family owner operators who can sell in bulk to tenants. “It’s not apples to apples with the idea of a socially recognizable personality, but it’s similar in terms of (market) ability at a relatively low price,” he says.
For now, Serhant is introducing S.MPLE to brokers throughout his company and plans to expand to other companies. His software ambitions may not outshine his Netflix reputation any time soon, but that could only help his efforts. “He’s not just a celebrity broker,” Berman tells me. “He’s basically a technology CEO, and he runs a pretty big company.”
Leo Schwartz
Twitter: @leomschwartz
E-mail: [email protected]
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ENTREPRENEURIAL WORKS
– Elephantthe London-based digital savings and mortgage platform, has raised £14 million ($17.8 million) in Series B funding. Goodwater Capital led the round, and was joined by existing investors Aviva, Ascension Ventures, Love affairsand McPike Family Office.
– RaidiumParis-based developer of precision radiology technology, has raised $13 million in seed funding. Newfund and Dates led the circle and they joined them The future of founders, Galion.exeand European EIC Fund.
– Achetonicsa Berlin-based developer of all-optical digital processors, has raised €6 million ($6.3 million) in funding. Matterwave Ventures led the circle and joined it 468 Capital, The capital of Bavariaand existing investors Runa Capital, Founders of Rheingauand others.
PRIVATE CAPITAL
– ABC technologieswith support Apollo Global Managementarranged the acquisition TI Fluid Systemsa developer of vehicle thermal solutions and fluid systems based in Oxford, England, for approximately £1 billion ($1.3 billion).
– Verdan acquired a minority stake in Fastera unified trading platform based in Stockholm, for 26 million euros ($27.5 million).
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GET OUT
– Argos to Wity acquired Monvisomanufacturer of dry bakery products from Andezen, Italy Cerea Partners and CAPZA. Financial terms were not disclosed.
