Nomad, a marketplace that aims to provide small-time rental property owners with “guaranteed rent,” has raised $20 million in a Series A funding round led by Silicon Valley Bank Capital.
The raise comes just six months after the Denver-based startup raised about $5 million in a seed round of funding. Nomad’s co-founders PJ O’Neil and Matt Thelen started the company after leaving their respective roles at Opendoor and Twilio. O’Neil was a general manager at Opendoor and Thelen was director of business operations at Twilio.
Founded in 2020, Nomad’s goal is to remove risk and financial uncertainty for small-time rental property owners. Today, it offers several financial products for both rental owners and their residents. Its flagship product is guaranteed rent for mom-and-pop rental property owners (primarily DIY landlords), which is designed to give these landlords more certainty even in turbulent market conditions.
“We help these rental owners maximize what they earn by reducing unnecessary vacancy costs that are painful to bear when there’s a mortgage and other expenses to cover,” said O’Neil.
In 2021, Nomad said it grew “8x,” or 700% year over year, processed over $10 million of rent and guaranteed rent for a portfolio of homes valued in excess of $250 million. It also has grown its team from 12 to 40 today and has more than 1,000 customers on its platform, including owners and residents.
Last year, the company also entered the Phoenix market, and is eyeing Raleigh and then Charlotte, North Carolina, next. It also added more financial products for rental owners such as rent advance, rewards for tenured residents and brokerage services that give its customers a way to buy, sell, rent and manage with its support.
Specifically, in addition to guaranteeing rent, Nomad has a financial product embedded in its core offering that allows property owners to tap into their future rental income by requesting up to six months of rent advance. The thinking is they can use the funds to do things like make upgrades to their property, or to invest in another rental property.
Nomad also wants to help renters by positioning them to be first-time homebuyers. For example, it reports on-time rent payments to credit agencies to help tenants build their credit. It also offers rebates to cover closing costs if one chooses to buy their first home using Nomad.
“Our goal is to make renting better for everyone involved, from DIY rental property owners and residents to property managers, real estate agents and maintenance professionals,” said O’Neil, who serves as Nomad’s CEO.
The company plans to use its new capital to hire dozens more employees this year and expand its geographical footprint to up to 10 new markets over the next 24 months. It also plans to continue to invest in its technology and partner with local real estate agents, property managers, lenders and service professionals.
Nomad’s investors are, naturally, bullish. Kickstart Fund, Peterson Ventures and Range Ventures also participated in the financing.
“Nomad has created a unique product that transforms the landlord-tenant experience for the single-family rental market,” said Beau Laskey, managing partner at SVB Capital, in a written statement.
Chris Erickson from Range Ventures, who wrote the first check into Nomad and co-founded Apartment List, believes the single-family rental market is going through a major shift.
“We are watching as billions of dollars in institutional capital is being deployed in the space and as first-time homebuyers are increasingly getting locked out of owning a home,” he wrote via email. “We believe Nomad will enable residential mom-and-pop rental property owners to remain competitive amidst the entrance of Wall Street landlords and will empower its residents to become first-time homeowners.”