San Antonio’s Brokerage Engine Plans Funding Round After First Sales
San Antonio—Brokerage Engine, a tech company building software that helps real estate brokerages manage operations, says it should soon close on its first round of funding since its launch a year ago.
The founders of the software-as-a-service businesses aren’t revealing yet who the investors are or how much in funding they will raise, but say they plan to consider the investment as seed capital. The company has been self-funded since it formed in 2017, when it started developing software to sell to the brokerage firms that represent buyers and sellers in the residential real estate market.
Even without traditional venture backing so far, Brokerage Engine has already signed about eight customers up for its service, and has a waiting list of about 40 brokerage firms that are interested in using it, the founders say. The company already has about 14 people working out of an ad-hoc office space in south San Antonio, in a building that once housed coffee factory.
“There were some big gaping holes in the technology stack to operate a real estate brokerage,” says Brokerage Engine CEO J Kuper. “There’s so much front-end, consumer facing tech; there’s no back-end real estate support tech. The systems brokerages use to manage themselves are subpar at best.”
That gap in the market—there are existing software programs, but the company’s co-founders argue they are old or outdated—is part of the reason the company says it has been able to sell its product before gaining funding. That and because the four co-founders have expertise in software and real estate, they say. Chief technology officer Dirk Elmendorf and chief experience officer Brett Elmendorf are two brothers known for their early involvement in cloud computing company Rackspace—Dirk, in fact, was one of Rackspace’s original co-founders.
Meanwhile, Kuper, Brokerage Engine’s CEO, and CFO Brianne Alston run a brokerage firm in San Antonio and Austin, Kuper Sotheby’s. Kuper and Alston developed the idea for the software startup, and were introduced to the Elmendorfs, and their tech expertise, through a mutual acquaintance (more on that later).
Brokerage Engine sells software that aims to help brokerage firms manage the various contracts and deals they make with real estate agents, who are trying to find or sell homes for clients. The software isn’t focused on the real estate transactions themselves, but instead the deals and agreements brokerage firms arrange with agents who work there. Brokerage firms typically offer agents associated with them various services, such as office space, support staff, and advertisements, in exchange for the agent either paying a monthly fee or splitting a commission from a home sale with the firm.
Everyone knows buying and selling a home is a complex process, and so is the working relationship between an agent and the brokerage, Kuper says. Agents and brokerages go back and forth over everything, such as the terms of splitting the sale commissions, the rate an agent pays the firm for marketing, or something as little as who pays for yard signs, Kuper says. Because those deals can vary from one agent to the next, it’s a lot of information to track, he says.
“The agents involved are sales people, and they negotiate everything,” says Dirk Elmendorf.
Brokerage Engine’s software does that tracking. The company also provides analytics on things like marketing campaigns that brokerages … Next Page »