85% of all landlords have experienced rental application fraud in the last year; 1/8 of applicants submit rental applications with some fraudulent aspect. Detecting these instances can save landlords hundreds of millions of dollars before embarking on a long-term relationship with a less than credible tenant. Snappt is a fraud detection platform for property managers that screens financial documents submitted by potential tenants. Analyzing pay stubs and bank statements, the company’s proprietary technology automatically flags documents that appear to have been altered in order for tenants to qualify for apartments. As the pandemic has increased the time and therefore associated cost for evictions, Snappt is providing property managers with the confidence to originate leases quickly without sacrificing tenant quality. The company, founded in 2017 by two real estate veterans, has embedded its technology into the existing leasing workflows of 4 out of the 5 of the country’s largest property managers.
LA TechWatch caught up with Snappt CEO and Cofounder Daniel Berlind to learn more about the inspiration for the business, the company’s strategic plans, how he went through 200 VC rejections when first launching the business, latest round of funding, and much, much more…
Who were your investors and how much did you raise?
$100M. Our Series A funding was led by Insight Partners with follow-on investment from Inertia Ventures.
Tell us about your product or service.
Snappt is a data-driven fraud detection technology. We determine the authenticity of financial documents submitted during the rental application process. Snappt doesn’t replace any existing systems, the software replaces the property manager having to rely on their own judgment. Our software fits within the workflow that already exists within the rental application process.
What inspired the start of Snappt?
My cofounder, Noah Goldman, and I both have a background in the property management business. We had known each other for just over 12 years were always looking for a solution like Snappt because we experienced fraudulent rental applicants. After searching and finding nothing. We decided to build it.
How is it different?
We don’t have any competition. The only somewhat similar concept is bank account linking. Unfortunately, with bank account linking, a lot of people feel uncomfortable giving that sort of information, whereas we fit with any bank or payroll company in the US.
What market you are targeting and how big is it?
For the moment we target the institutional property management market. Any property owner or manager that has 1,000 units to hundreds of thousands of units.
What’s your business model?
We charge either a SaaS model of $1.50 per unit per month for unlimited scans. Or we charge a transactional cost of $35 per applicant. 98% of our customers opt for the SaaS model.
What are your post-COVID office plans?
We plan to be flexible. We have employees in LA but also all over the globe and our hybrid plan includes having employees in LA, in-person, at least once every few months.
What was the funding process like?
We weren’t looking to raise funding at the time. Insight Partners approached us with an offer we couldn’t refuse with a roadmap to become a ten-figure business.
What are the biggest challenges that you faced while raising capital?
We wanted to make sure that we chose the right partner. We wanted a partner that believed in an operational style similar to ours and shared the same vision to bring this technology to more industries. We are passionate about having an inclusive workplace and Insight Partners shares that vision.
We wanted to make sure that we chose the right partner. We wanted a partner that believed in an operational style similar to ours and shared the same vision to bring this technology to more industries. We are passionate about having an inclusive workplace and Insight Partners shares that vision.
What factors about your business led your investors to write the check?
According to Insight Partners, it is the market opportunity in property management and other industries. They were also attracted to Snappt as a market leader as well as our growth rate and how capital efficient we are.
What are the milestones you plan to achieve in the next six months?
Snappt will continue to build the technology to be as scalable as possible. This means scaling our team and the technology to cope with the demand and growth we are projecting. This includes hiring.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
When we went thru that experience in 2020 it was about trying to select initiatives within the business that gave us the biggest bang for the buck in terms of growth. I would also highly recommend not giving up – I pitched 200 VCs between 2017 and 2019 and got a 100% “No” rate.
When we went thru that experience in 2020 it was about trying to select initiatives within the business that gave us the biggest bang for the buck in terms of growth. I would also highly recommend not giving up – I pitched 200 VCs between 2017 and 2019 and got a 100% “No” rate.
Where do you see the company going now over the near term?
We want to continue our growth in institutional property management but we’ll have our eye on other adjacent verticals that would benefit from our technology.
What is your favorite restaurant in LA?
Geoffrey’s in Malibu because that is where my parents would take me on big occasions. I have great fond memories of special family time at that restaurant.
