Why we Invested in Proper

I remember my first pitch meeting with the team very well. We met in our office (yes, this was pre-COVID), and it merely took five minutes for me to be amazed by the clarity and engagement in which Morten presented the idea of Proper. He vividly painted a picture of property owners having several employees working with administrative tasks — such as keeping track of tenants and rental payments — across Excel spreadsheets.

At byFounders, we instantly got excited about the idea of building a digital property manager that automates all manual tasks while also ensuring that the property owner and landlord feel in control.

More importantly, we were captivated by the founders. Morten Krarup, the CEO and ‘hustler,’ continues to amaze us with thoughtful answers to our questions, a super clear vision, and a relentless work ethic. And Jacob Funch, the compassionate product lead with more than a decade of relevant tech experience and a unique understanding of how to prioritize product development based on the optimal user experience.

(And, yes, we were quite excited about the 30% month-on-month revenue growth with <1% churn as well. 😅)

Underestimating the Cumbersome Process of Handling Tenants

Do you know how many non-value-adding activities landlords, real estate investors, and tenants have to deal with daily? Sadly, the answer is a lot.

On this note, there was one customer reference call that stuck with me. I spoke with a landlord of student housing properties, and he told me about their work before and after using Proper. With new tenants moving in and out every semester and an inbox filled with questions — the landlord and his team spent all their time trying to track down rental payments and sending reminders instead of doing what they wanted to do, which was to give their tenants the best possible service.

Until they started using Proper. Suddenly, everything from contracts to tenant communication and rent reminders was now automated. More importantly, they could finally keep track of all the rent payments! I wasn’t aware of this, but monthly rent payments are not always made by the same person. One month it may come from the tenant, another her mom, and so on. When this happens, the property administrator has to play detective to match payments with tenancies manually. Proper connects each apartment to a virtual bank account, meaning that it automatically logs to the tenant no matter who pays the rent. So easy, yet so impactful.

Giving a Term Sheet Right After Lockdown

There are few times when a ‘level of trust’ is tested as much as it is in the midst of a global pandemic and lockdown. We committed to investing in Proper right before the world flipped on its head.

"I remember when we had just signed the term sheet, there was talk about this coronavirus, but it had not really hit Denmark yet. Two weeks later, the Danish Prime Minister shut down the country. Instantly, we started to hear about venture deals falling through left and right. We had a very good feeling about byFounders, but you can’t help think about the risk of the whole thing falling through. I’ve told Sara and Tommy several times that we’ll be forever grateful that they stuck to their word and their conviction in us, even when the world was falling apart." - Morten Krarup Kristensen, Co-Founder & CEO of Proper

For us, pulling out was never an alternative. We had a strong conviction in Proper, and we would never leave anyone out in the cold — even during a global crisis.

Doing Things Right

Since our first conversation, Jacob had emphasized the benefits of having a senior tech team in place. A team that knows how to do things right. For example, their software lead has more than 25 years of developer experience and was previously the lead architect at Swipp — Denmark’s first mobile payment solution.

It was not until our dear friend and byFounders Collective member, Morten Primdahl (co-founder and CTO of Zendesk), did technical due diligence that we understood the true potential of Proper’s product. The choice of technology, infrastructure, architecture, and methodology was not only under control but built in a modern way that even impressed ‘Mr. Zendesk’ himself.

It was clear that the team at Proper had managed to build a solid tech foundation that wouldn’t have to be reworked anytime soon.

Still Wondering Why We’re Excited?

With ever-increasing real estate prices (Germany and Sweden have grown by 90% and 57% respectively during the past decade!), large amounts of people are left with only one choice: to rent. But even though the rental population continues to expand, the rental management market is still suffering from poor service levels and a significant number of inefficient, manual processes.

In addition, new and more complex regulations — such as GDPR — make it difficult for landlords and investors to comply without real-time adjusted software.

It’s an industry ripe for disruption. Pair that with a strong founding team, and we have a well-positioned startup, ready to win this market and eat up market share from both incumbents, insourced administrators, and new players.

🤫 Psst! Their automation level — which allows for very competitive pricing — also enables them to scale easier and nurture healthier unit economics.

With a large market of almost 80 million tenants in Europe alone, we believe that there’s room for several multibillion-dollar winners in this space. We think that Proper is uniquely positioned to become one of them.

We are so excited and thankful to partner with the whole Proper team on their journey ahead!