Tech-enabled appraisal startup Bowery raises raises $12 million Series A to revolutionize the $4 billion commercial real estate appraisal market
We live in the age of major technology transformation with technologies like artificial intelligence, robotics, and autonomous cars. It surprising that some industry sectors are still lagging behind. Take for example the real estate appraisal market where 62 percent of appraisers are over the age of 50. The current appraisal process is cumbersome and appraisers have to spend a great deal of time combing various data sources for public records and past and present listings. Gathering property information is tedious and time-consuming. The process has resulted in long cycle times in order to deliver quality results.
With these challenges come opportunities for commercial real estate appraisal disruption. It also presents opportunities for technology startups to transform the market. One company that is leading the change is Bowery, a New York City startup that uses technology to cut out all of the busywork, so appraisers can spend more time appraising and less time copy and pasting. Founded in 2015 by Cesar Devers, John Meadows, and Noah Isaacs, Bowery first $1.75 million in seed investment in May of 2017 to launch its cloud based commercial appraisal writing software. The company has reached a new milestone since then, including tripling its client base, revenue and headcount.
As a sign of investors’ trust in company’s direction and performance, Bowery announced yesterday it has closed in $12 million Series A funding to drive and accelerate the hiring of engineering and appraisal talent and expand its presence geographically. The round was led by Builders VC, with participation from Seed investors Navitas Capital, Camber Creek, Fika Ventures and Corigin Ventures. Bowery also plans to expand its technology capabilities and product offerings to further shorten turnaround times and offer unique, innovative solutions to continue to modernize and streamline the appraisal process.
Bowery powers its appraisers with a cloud based commercial appraisal writing software and mobile application, allowing them to write full appraisal reports more than twice as fast as its leading competitors. Its powerful backend database and natural language generator create increased efficiency, quality, and consistency firm-wide that help appraisers to produce more consistent reports, faster and at lower cost.
Commenting on the financing, Jim Kim, General Partner Builders VC and lead investor, said: “Bowery brings a whole new way of thinking around appraisals and efficiency when it comes to using technology in the antiquated world of real estate valuation. Builders VC is thrilled to be investing in this team and company, applying a modern mindset and technology to an outdated industry.”
Recognizing that the commercial real estate appraisal process is broken, Bowery built the first vertically-integrated appraisal company that provides an end-to-end software solution for commercial real estate appraisals. Through its unique public record integration, mobile inspection app, exhaustive databasing, and natural language generation, Bowery is able to create less expensive and more accurate reports twice as fast as the industry average.
Bowery’s Co-CEO Noah Isaacs said, “Before starting Bowery, John and I spent several years appraising at one of the largest independent appraisal firms in the country. We were spending 50-60% of our time on busy work—manual data entry and copying and pasting.” John Meadows, Co-CEO went on to say, “We knew that there was a better way to appraise and set out to build a unique toolset for appraisers. With this round of funding, we can’t wait to continue our mission of creating efficiency throughout the appraisal process and offering our clients best in class service.”
The average commercial real estate appraisal takes three weeks to deliver and is considered the biggest bottleneck in the lending process. Reliant on manual reporting, appraisals are riddled with errors and inconsistencies, burying valuable data in dense, hundred-page PDFs. Appraisers are also frustrated, needing dozens of disparate tools and manual processes to complete a single appraisal.
“The most exciting and validating part of our journey so far has been watching our engineering team bring our dream software to life, and our team of exceptional appraisers using that software to produce reports that far surpass the industry standard,” said co-founder and CTO Cesar Devers. “With this new funding, Bowery will be able to deliver innovative solutions, as well as address clients pain points around appraisal status, data extraction, and review experience.”
In the past year alone, Bowery has raised a total of $17 million, tripled its client base, revenue, and headcount, and valued more than $3 billion in commercial real estate. Bowery is now working extensively with top-tier lenders and operating in New York, New Jersey, Connecticut and Pennsylvania. Bowery also won the “Transactions and Underwriting” award at the 2018 Real Estate Tech Awards.