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The RentTech sector continues its busy start to the year.
Lessen, a company that builds software to support the business operations of single-family rental investors and multifamily landlords has acquired SMS Assist, a facilities maintenance technology company. The company made the announcement in a Jan. 12 news release to Inman.
The news comes a mere week after Doorstead, a guaranteed rent and property management platform, announced a $21 million Series B round of financing and its own acquisition of Knox Financial.
Founder and CEO of Lessen Jay McKee said the acquisition demonstrates the ongoing need for a unified services platform at the enterprise level to support the property management space.
“This transaction further establishes us as the pioneer and industry leader, propelling today’s property technology and services delivery space forward. Lessen and SMS Assist will continue to develop an innovative tech platform, modernizing residential and commercial service delivery.”
The deal consisted of cash and stock, with Lessen raising $500 million in combined new debt and equity. SMS Assist added stock, as well. According to Lessen, the acquisition results in its valuation of more than $2 billion.
SMS Assist is a facilities management firm that developed and supports enterprise software similar to Lessen, but with reach into retail, net-leased and restaurant commercial property, as well as rented homes and apartment properties. Its network of trade vendors, which will be reconciled and blended with Lessen’s existing compendium, totaled more than 20,000.
SMS Assist’s founder Mike Rothman built the company’s initial software solution from the guts of a system he coded for an exterminator business. It reached unicorn status (private, worth $1 billion) in 2016.
About the sale of his company, Rothman said in the announcement it was all about synergy.
“The acquisition will show we are better positioned together with Jay leading at the helm from a consistent track record of growth.”
Rothman refers to McKee’s continued status as company CEO.
In June of 2021, Lessen closed on a Series A funding round of $35 million, led by Fifth Wall. Then, its total raised was $45 million.
The company provides a range of oversight with human power and technology, coordinating a range of critical services, such as apartment turns, renovations, general upkeep, vendor communication and business performance insights, among others.
“The new, combined technology platform will allow the many service providers — from contractors, painters, plumbers to electricians and more — to act as one, performing work at a national level that was not previously possible,” Lessen said.
The company also said it’ll be able to help customers overcome staffing shortages, “while simultaneously reducing administrative burden, providing efficiency and real-time project updates.”
Lessen’s success and that of its many colleagues now serving the wide range of needs for the rental industry can be attributed, in part, to the long-running acceptance of manual, disjointed workflows within the business of managing rented real estate. The company calls it “under-penetrated,” and values the North American property-services market at $330 billion.