Spruce, an on-demand services startup focused on the multifamily industry, has raised $8 million in a Series A round of funding led by Houston-based Mercury Fund with participation from Sweat Equity Partners.
Austin-based Spruce provides a variety of lifestyle services to the multifamily industry such as housekeeping, chores, pet care, laundry and dry cleaning. Residents use the company’s app to book services.
Spruce began this year with just under 100,000 apartment units on its platform and currently has 230,000 units on it, according to Ben Johnson, the company’s CEO and co-founder. Since the company’s last round of equity funding in July 2019, Spruce has expanded into 9 markets and has over 760 properties on its platform. Johnson expects to end the year with more than 250,000 apartment units on Spruce’s platform.
In an interview with FinLedger, Johnson said the proptech company plans to use the fundraise to expand geographically and continue to invest in the customer experience. The startup has raised over $11 million in funding since its inception in 2016, according to Crunchbase.
“We’re going to continue expanding our footprint by adding new markets and increasing our property footprint in existing markets,” Johnson said. “But at the same time, we’re continuing to invest in the customer experience. So, giving customers a better overall booking and management, managing their entire suite of home services in our mobile experience (and) providing more granularity to the data that’s available.”
For example, Spruce will also be launching in North Carolina, according to Johnson.
“By the end of 2022 Spruce will be available in the top 40 markets in the country,” he told FinLedger. “We’re working with our clients to determine which markets to do next.”
Mercury Fund’s Managing Director Blair Garrou said in an interview with FinLedger that the firm led Spruce’s seed extension round about two and a half years ago and has been financing the company since.
“We’re super excited about the opportunity with all the macro effects, trends and so forth within multifamily,” Garrou said. “But also (we’re excited about) Ben Johnson’s vision of becoming the Uber within the home, and all those services that you can deliver to customers within the home.”
Although the COVID-19 pandemic has taken a toll on many businesses, Johnson said Spruce has been able to roll out new service lines like sanitization and disinfection services and continue to grow its customer base. Such services helped relieve the pressure put on onsite property teams with disinfecting common areas such as leasing offices, amenity spaces and other high-travel access areas.
In early 2021, the company also plans to roll out new services directly for the properties, such as turnover cleanings.
“At the same time, we’re continuing to invest in how we work with local businesses on the Spruce platform,” he said.
“With these funds, we’re going to continue to invest in a capacity management or a yield management system that helps local businesses maximize their revenue generating time,” Johnson added. “We’ll be using machine learning and predictive analytics to create a denser customer base and reduce the overall operating expense of our local business partners.”