Northspyre, a financial tracking and project delivery platform for real estate developers, today announced raising a $25 million Series B led by CRV, according to a press release shared with FinLedger.
The company says it plans to use the funding to continue business growth, and expand its solution to improve the development process within the multi-trillion dollar commercial real estate industry.
Northspyre provides a purpose built operating system for real estate owners and developers managing complex projects such as ground-up developments, fitouts and major renovations across all asset classes.
Since launch the company has helped facilitate more than $44 billion in capital projects on behalf of the commercial real estate (CRE) industry, and is now being used by more than 130 customers across every major in the US, according to the release.
“We’re going through a pretty transformative time at Northspyre. We’ve been at this inflection point where I think it’s exciting to watch the industry. When we found it four and a half years ago, I would cold call people and say, ‘Hey, would you like to do a demo?’ And people would say, of course not. I’ve been doing this for 30 years. I don’t need to think of software,” Northspyre founder and CEO Will Sankey told FinLedger.
“Nowadays you call people they’re like, ‘Yeah, I didn’t know there was something else. I definitely want to know what’s out there.’ I think it’s this receptiveness to technology, and how it can help them be better, deliver better results and returns, and reduce project costs, all of that. I think they’re more receptive to it, and I think that is a wave that Northspyre is riding,” Sankey said.
Craft Ventures, Tamarisc Ventures and Des Traynor (co-founder of Intercom) also participated in the funding round. The company has grown sixfold since its Series A in May 2020, and has now raised $32.5 million in total funding.
“Despite the size and value of the real estate industry today, the available technology stack is elementary,” stated Anna Khan, General Partner at CRV. “Over the last five years, we have witnessed a renaissance in vertical software-as-a-service, and Northspyre is at the forefront of this revolution. William and his team have identified a sector of the real estate industry that has been severely lacking technology penetration, and will continue to create ripples as development teams seek out forward-looking solutions to improve efficiency and their competitive advantage.”
The company began servicing customers in New York and Boston four years ago, and has since grown its footprint to include every major metro area in the U.S. In the past year, the company expanded to more than 30 new high-growth markets, including San Diego, Charlotte and Phoenix.
Last week, FinLedger got the chance to speak with Sankey, who also acts as the company’s head of product, about the company and its plans moving forward.
Q&A with Will Sankey, Northspyre founder and CEO
Q: Can you describe Northspyre and the services you offer?
A: Northspyre provides technology that empowers modern real estate teams to leverage advanced technologies like automation, data analytics and artificial intelligence. All so that they can be a bit more data driven in their decision making, and get to hopefully more predictable outcomes and easier outcomes on complex projects.
That’s sort of what we do in a nutshell. You know, running projects is relatively complicated. You’re dealing with lots of different vendors. You have lots of data points coming in, so Northspyre also gets to be this system of record. Almost like this operating system for running real estate projects, as the central hub for decision making, and then there’s a lot of interesting stuff that extends off of that.
Q: What would you say was the genesis of this ? When did you see this as a problem that needed to be fixed?
A: I come from the traditional side of the real estate industry. I started my career running real estate projects as a project manager in New York. I immediately noticed that there were problems. When I started my career, I was fortunate to work on a pretty incredible project; they were doing a billion dollar renovation of Madison Square Garden Arena. I was the assistant to the project executive there, so I sort of had a bit of a bird’s eye view and was doing a lot of grunt work.
I was amazed that even on a project where at points they were spending $30 to $80 million a month, that all this was happening through this maze of convoluted spreadsheets. There’s so many spreadsheets. Probably like 30 different spreadsheets involved, and some of them have like 16,000 lines of data. I went on from there to work on lots of other projects in New York, different companies building apartment buildings, condo buildings, office buildings, historic warehouses near the Brooklyn Navy Yard and in the South Bronx, converting them to office, retail and all different types of projects.
But they all had the same issues around how they deliver projects using spreadsheets. And I guess by virtue of using spreadsheets, and the amount of work that it took to keep them consistent and reliable and [to keep] information updated, often they were caught flat footed and in a very reactive posture. By the time we got the information updated, it was 30 to 45 days later, and they didn’t have a great view of where the project was headed, say 18 months from now. That was something I observed almost immediately.
I thought to myself at the time that a machine might come along that does some of this better so I should actually learn to code for job security. So I started learning to code at night. Taking coding class, I did that for about three or four years. So you know, software developer by night and real estate developer by day, building small tools to help automate how projects were delivered mostly for my selfish interests, like automating parts of my day job.
Eventually one of those concepts that came was a prototype and insight for a little bit of a grand theory of how you could leverage all these data points and do something special around helping teams to just get more predictability, without having all the administrative burden around that. Smart engineers and I took that prototype and Northspyre was off to the races.
Q: I’m seeing a lot of growth during and due to COVID. What did the pandemic do for Northspyre?
A: Northspyre is not a company that’s existed for 30 years. So I can’t tell you that versus our baseline trajectory. A lot of the life of Northspyre has been during the pandemic. What I can say is that a couple things happened.
One is, it was sort of a forcing mechanism for real estate teams to reconsider, just like other industries, ‘Do I need to be sitting in an office next to someone to show them my PDFs or spreadsheets?’, and when we sit down twice a month to discuss the status of the project, do I need to be standing next to the copy machine in my office to compile that 300-page monitor report.
The good thing is that Northspyre existed, and you could sort of do these things in the cloud and in this collaborative environment. I think we saw our highest user engagement since our founding during the pandemic, because I think a lot of teams looked around and said, ‘How can we keep being productive and keep moving our projects forward?’
Northspyre became one part of their toolset and then we happened to raise our Series A back at the very beginning of the pandemic. So it was a point in time, where we were sort of nervous because we didn’t know what to expect as well. But I think in that timeframe, we grew about 6x in a relatively short amount of time.
I think the pandemic, definitely horrible thing all together, but at least in terms of the adoption of technology for real estate, which is traditionally very slow to change, this was a little bit of a forcing mechanism that I think was probably happening anyways. I think this sort of accelerated some of these changes and the mindset of how people approach what was an acceptable way to run a project, and what tools need to be at the forefront of project delivery.
Technest
FinLedger’s proptech podcast, Tech Nest, recently interviewed Northspyre CEO William Sankey. You can find that interview with Tech Nest host Nate Smoyer below.