Grotto AI raises $10M to tackle $500B vacancy crisis with human-first real estate AI

Vacant apartments are costing property owners an estimated $500 billion in lost value. Grotto AI believes the fix isn’t more automation. It’s better human conversations.

The New York-based AI startup announced a $10 million seed round led by ICONIQ, the same investor that recently co-led Anthropic’s $30 billion Series G. For ICONIQ, which typically writes larger checks at later stages, backing Grotto at this stage signals strong conviction. Advisors and angel investors include David Dear of BILT and a former Equity Residential executive, Caren Maio of Get100 and Funnel Leasing, Avi Dorfman of Compass, and Asymmetric Capital Partners.

At a time when companies across industries are racing to replace front-line workers with AI agents, Grotto AI is making a different bet. Leasing, the company argues, is not a script-reading exercise. It is a human interaction that directly affects revenue.

While Others Replace Humans, Grotto AI Raises $10M to Prove Human Leasing Wins

Grotto’s platform analyzes leasing conversations and identifies what actually drives conversion at each property. It then delivers real-time guidance during calls and tours, followed by post-call coaching. The goal is simple: help agents build rapport, handle objections with confidence, and close more leases.

The system is already live with major operators, including Weidner Apartment Homes, which manages more than 70,000 units. Early customers say the results appear where they matter most: on revenue statements.

The founders bring a track record that investors recognize. Nick Deveau and Ben Epstein previously worked together at EvolutionIQ, where they helped build the technology that led to a $730 million acquisition in 2024, one of the first large exits of the modern AI cycle. Deveau trained in AI at Stanford and has spent nearly a decade building AI-native SaaS for Fortune 500 companies. Epstein focused on infrastructure for machine learning teams and most recently led EvolutionIQ’s internal LLM platform.

Tengbo Li, General Partner at ICONIQ, said the firm invested after seeing the founders execute before.

“We had the privilege of working with Nick and Ben at EvolutionIQ and saw firsthand their ability to build and execute world-class B2B vertical AI products,” Li said. “What drew us to Grotto AI is that same combination of technical depth and commercial focus. We believe that they’re solving one of the most quantifiable problems in multifamily by driving real, measurable revenue growth. Grotto AI delivers results you can see on a P&L, not just a dashboard.”

Grotto’s early research may be its most interesting asset. The company built its initial models with statisticians and AI researchers from Carnegie Mellon and Stanford, analyzing hundreds of thousands of leasing interactions. The data challenged common industry assumptions.

Speed and scripts mattered less than interpersonal signals. Agents who initiated moments of laughter were 48% more likely to convert a lead into a signed lease. Agents who demonstrated genuine curiosity saw a 35% lift in conversion. Standard practices, such as asking for a tour or pushing an application, delivered only a 14% lift.

“The industry has it backwards,” Deveau said. “Typically, leads are escalated to humans based on complexity — if they ever reach a human at all. In reality, our data shows that we should actually be escalating to humans when intent and warmth can change the outcome. If 2025 was the year of replacing humans, 2026 is about unlocking what only they can do.”

The message is clear. AI does not need to replace leasing teams. It can make them sharper, more aware, and more effective in the moments that decide revenue.

Real estate has always been a people business. Grotto AI is betting that even in the age of automation, that truth still holds.