How This Startup Is Making It Easier for Renters to Find Housing RadPad garnered 10,000 downloads in its first month.
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The last time Jonathan Eppers tried apartment hunting, he found the experience so frustrating he decided not to move. Apartments listed as "available" were not; price listings were inaccurate; scams abounded.
"One of the biggest problems facing renters today is the sheer amount of bad data they come across," says the former eHarmony and Myspace product manager. Convinced the rental process needed a reboot, Eppers and friends Tyler Galpin and Tim Watson in January 2013 founded RadPad, a housing marketplace for the mobile generation.
They faced some resistance. "All these investors we talked to initially said, "You're going to focus on the renters? It's never going to work. They churn; they're not loyal; they don't pay,'" recalls Eppers, CEO of the Los Angeles-based startup.
But investors changed their tune after RadPad's free mobile app garnered 10,000 downloads in its first month and attracted a buyout offer from a competitor. The startup raised $4 million in seed money in 2014 and in April of this year closed a $9 million Series A round led by Altpoint Ventures, whose portfolio includes rideshare giant Lyft.
Today RadPad lists more than 1 million U.S. apartments, condos and homes. Most renters frequenting the platform are mobile users who are younger than 34. Eppers says the app—available for iPhone and Android—has been downloaded 1.5 million times, and the overall platform gets more than 2 million rental searches per month.
Listing and finding a place on RadPad is free. The platform makes its money from added features, such as one that allows tenants to pay their monthly rent with a credit card or via Apple Pay (at a cost of 2.99 percent) or with a debit card (free). Eppers expects to process $70 million in rent payments this year.
Kosaku Yada, managing director of Altpoint's office in Santa Monica, Calif., is confident that tenants and landlords will continue flocking to the platform. "I think landlords appreciate anything that makes it easier to receive payments on time with less hassle for the renter," he says. "Also, in an age of increased shared housing, the group payment service makes splitting rent much more user-friendly."
The RadPad team continues to develop new platform features. Earlier this year, the company released a proprietary algorithm that ranks rental listings based on photo quality (RadPad requires three high-quality images per listing), landlord response time and other information. "That really cuts down on the amount of bad data that gets on the service," Eppers says. The best-ranked listings appear higher in renter searches; bad ones may not get published at all.
On the landlord side, the new Promoted Pads feature lets property owners pay to have their listings highlighted. Each time a potential tenant contacts the lister, RadPad receives a fee. Also new: LinkedIn-style renter profiles detailing their rental history, employment status and salary. "Then the profile eventually becomes what they use to apply to an apartment," Eppers explains. He expects landlords will be happy to pay for this data.
This summer, the rapidly growing company expanded its on-the-ground community-relations crew from eight to 30 U.S. cities. "Their job is to make sure that RadPad becomes the biggest rental marketplace in that city," Eppers says. Tactics include handing out swag at concerts and farmers markets, networking with local property owners and addressing customer service complaints.
"We want people to feel like RadPad is local wherever they live," Eppers says. "To do that, we've got to actually make the commitment to be a local company."
