Exiting stealth mode with a customer pipeline of over 2.5 million units, Colleen AI has raised $3.5 million in series seed funding to scale the artificial intelligence (AI) platform that optimizes payment collections for multifamily property managers.
The funding round was led by Wilshire Lane Capital, a venture capital firm backed by Morgan Properties, with participation from Skybox Capital, owner of residential companies Magnolia Capital and National Home Rentals. Morgan Properties, Magnolia Capital, and National Home Rentals are also existing customers, allotting the over 2.5 million established customer units.
“The real estate industry faces a huge collection challenge that can be mitigated with an innovative AI stack,” says Itamar Roth, CEO at Colleen. “We are excited to lead the space with Colleen by providing a reliable platform that helps our customers improve their bottom line while streamlining what used to be time-consuming manual processes.”
From 2019 to 2021, the National Multifamily Housing Council (NMHC) conducted a study where it collected data from nearly 12 million units. It found that about 20% of residents are expected to be late paying rent and 5% never pay.
“When you dive deeper into the 20% late payer number, this means a midsized organization of 10,000 units needs to follow up on a monthly basis with 2,000 delinquent residents,” says Roth. “This requires a huge amount of time for on-site managers to approach each resident, whether that’s via phone calls, emails, or knocking on doors.”
Seeing a need for optimized rent and debt collections, Roth founded Colleen in 2021. “The more I uncovered the statistics (for example, the data in the NMHC study), the more I realized that unless I do something, these challenges are here to stay. COVID coupled with uncertain market conditions have exacerbated the collection challenge within the real estate industry. This fact, combined with my technology background, prompted me to create a powerful AI solution to one of the industry’s longest standing and most manual obstacles,” Roth shares.
Colleen’s payment collection solution hinges on generative AI and automation. This includes analyzing the residents, their profiles, and their financials and predicting when someone is expected to pay late. The platform also determines when and how to best communicate with each resident. By answering residents’ questions and understanding what they’re looking for, Colleen is better able assist the community, saving property teams time and increasing operational efficiency.
"Helping residents stay current with their rent payments, while ensuring that their apartment communities are operating at peak efficiency, is top of mind for our operators," says Adam Demuyakor, founder and managing partner at Wilshire Lane Capital. "Using their proprietary generative AI modules, the Colleen team has paved the way for a new breed of innovative solutions that will help better serve our industry. We're excited to be partnering with Colleen to make a difference for property managers and their residents." Demuyakor joined the Colleen board along with the raise.
Colleen integrates with property management software companies including Yardi, RealPage, Entrata, RentManager, and ResMan. The AI platform automatically syncs resident and property data for centralized access to payment forecasting and analytics.
Looking ahead, Roth says, “We’re excited to provide more AI-powered property management services to optimize payment collections across the resident journey, including debt collection.” Within the last year, the team has doubled its employee head count and plans to add to the team in sales and customer success as expansion continues.