Bowery Valuation Raises $ 35 Million For Its Technology-Based Commercial Property Valuation Firm

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The value of commercial property is more subjective than the value of residential property because the underlying asset, while important, needs to be weighed against rental income and operating costs. This leads to the fact that the valuation of commercial real estate requires significant amounts of information from disparate sources to understand property, zoning records, demographic and lifestyle information, comparable sales and rent data. Bowery score is a technical platform that combines all of these requirements into an easy-to-use, centralized interface that makes commercial valuation more effective for evaluators and company customers. Rather than using the traditional SaaS model, the company uses its software platform to enable its staff to deliver valuation services to customers. Taking a data-driven approach has led to the redesign of one of the most tedious parts of a commercial real estate transaction, resulting in industry-leading turnaround times. Bowery Valuation operates five offices, mostly on the east coast, with national expansion plans.

AlleyWatch caught up with co-CEO John Meadows to learn more about how the founding team’s experience as evaluators relying on Microsoft Office inspired the idea of ​​building a robust software platform for the industry, the company’s strategic plans, the latest funding round, and much, much more.

Who were your investors and how much did you raise?

We raised $ 35M in Series B funding led by Growth Equity business as part of Goldman Sachs Asset Management (Goldman Sachs) featuring Capital one ventures and existing investors including Builders VC, Fika Ventures, Navitas Capital, Camber creek, Nine Four Ventures, Greenspring Associates, as well as Alpaca VK… With this investment, our total funding was $ 66 million following a $ 20 million Series A venture funding in 2019.

Tell us about a product or service that Bowery Valuation offers.

Our appraisal platform is a complete software solution for commercial real estate appraisers that uses public records integration, mobile app for validation, natural language generation and a comprehensive database.

What inspired the start of Bowery Valuation?

Noah (Isaacs, co-founder) and I grew up together in Berkeley and have become best friends since the age of 14. We always wanted to start a company together, and when we started doing commercial appraisal right after college through a friend of mine in Pennsylvania, we were immediately amazed at how outdated and painful the appraisal process was. We’ve done the appraisal ourselves for several years, totaling over $ 5 billion, while saving as much money as possible and learning as much about the industry as possible. We worked for a local firm of 20-25 people in New York City using Excel spreadsheets and Word documents that someone created in the 90s, and we took the time to improve. After our firm was acquired by a national firm, we were provided with ostensibly “industry-leading” technology that was worse than our own already painful Excel spreadsheets and word processing documents. It was the last push we needed to quit our job and team up with our third co-founder. Cesar Deversto create real technology that can change the industry forever.

How is Bowery Valuation different?

We are different in many ways. It’s easy to say that this is our technology because it is the main distinguishing feature of our original idea, but I think it starts with our people in the first place. We’ve handpicked the best accreditation talent and paired them up with outstanding product managers, designers, and software developers. The people at Bowery make our culture unique to our industry and make it a place where innovators and best-in-class talent want to come together to build with us. Our idea is nothing without our people. Unlike other appraisal firms, all of our employees are shareholders, which gives them all a real sense of ownership. We strongly believe that the best people create the best product and that profits will grow.

And ultimately technology is how we believe we can change our industry. We equip our top evaluators with superior tools to evaluate more efficiently, intelligently and consistently, ultimately delivering a superior product to our clients. We strive to truly transform the value created by ordering an appraisal through the internal collaboration between our technologists and our appraisers, as well as collaborations with our clients, to create technology that has never been in our industry. Finally, we also have very different team building, culture, operations and customer service ideas that set us apart.

What market is Bowery Valuation targeting and how big is it?

Today we are focused on commercial appraisal. We are headquartered in New York and have offices in New Jersey, Philadelphia / Central Pennsylvania, Washington DC and South Florida. Our funding will enable us to continue to expand nationally by opening offices in the United States.

What’s your business model?

We do not sell software to third parties, we use it to enable our evaluators to deliver the highest quality reports faster than anyone else. We look at every aspect of our business and our industry and ask ourselves how can we make it better? This means solving inefficiencies and problems through technological, cultural and operational innovation.

How has COVID-19 affected your business?

April and May 2020 were hit hard as lenders stepped aside to wait and see the market recover. In June the situation started to improve again, and in September our business really took off and we were able to get out of 2020 with the best months in history. Since then, our business has only continued to grow – the biggest problem ultimately was that we slowed down recruitment in the spring and summer due to uncertainty, and we had to really push to catch up with hiring in late 2020 and early 2021. that was definitely a welcome to the challenge to get out of a terrible time.

How did the funding process go?

It was about a 4-5 month process from start to finish. We have had many meetings with investors and are very lucky to have chosen the best partners at Goldman Sachs and Capital One. While this is a lot of work and certainly very stressful, it is also a great opportunity to get candid feedback from objective third parties about our business and to learn about opportunities for improvement.

What are your biggest challenges in raising capital?

I think the biggest challenges we faced was that we are not a traditional SaaS company and are in a space that Series B investors don’t know much about. We love that we are in a space that is still a huge industry, but it takes a lot of personal comfort to make an investment of this size. So it really came down to finding the perfect fit. It was above all for us that the potential investor understands what we are building and also be excited / inspired by what we are building. With Goldman Sachs and Capital One, we found both clients and industry leaders who not only understood us, our industry and our vision, but could also play an important role in realizing our vision for the future for our space.

What factors in your business prompted your investors to write a check?

They deeply realized the opportunities that exist in our space, existing in a huge industry that has lagged behind for decades. Our business is clearly working, we have grown faster than any appraisal firm in the US since we launched, and when we showcase our technology it becomes clear how differently we approach this area. And in the end it all comes down to betting on this team to lead the first unicorn in our industry in the US, and our people have a truly exceptional reputation.

It was also very helpful that Goldman Sachs and Capital One are our clients, so they were able to see our quality, efficiency and people first-hand.

What milestones do you plan to achieve in the next six months?

In the next six months, we plan to open four to five new offices and launch the latest version of our software internally, which we have been working on for over a year, which will be a significant step forward in our industry.

What advice can you give to companies in New York that do not have a new capital injection into the bank?

We are indeed fortunate to have grown rapidly and have continued to successfully raise capital from institutional venture capitalists, but most large enterprises face major hurdles at one point or another. We had many long nights at the Bowery. There are many different paths to building a great business, and very rarely are they easy. At one point, Airbnb sold cereal to stay alive. If you truly believe in your business, keep it going, keep promoting it, make sure you have great people to build with you, trust others will eventually see it, and try to get as much out of your trip as possible. even if it seems impossible.

But I also really believe that a huge amount of luck is critical, and if it doesn’t happen this time, that doesn’t mean it won’t happen next time. We’ve been so incredibly lucky along the way that it’s honestly hard to believe or express. The meeting with Cesar and the meeting with James, our chief appraiser and chief operating officer, are the first two meetings without which we have no chance of being here. But there are countless examples of this in the Bowery.

How do you see the development of the company in the near future?

Our main initiative for the next few years is to fully scale our business nationally, both in terms of technology and in terms of coverage. We have so many opportunities in the long term in this space in different directions, but right now we are trying to stay focused and strive to become the leading commercial appraisal firm in the United States, attracting great people and continuing to create truly innovative technologies.

What’s your favorite outdoor restaurant in New York?

The best outdoor restaurant in New York is Rosella in the East Village. Jeff, Yoni, Liz and Shi are four of the nicest people we’ve met, and their organic Japanese food is incredible and unique. This is truly Noah and my happiest place in New York.


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