Following the emergence of institutional investors buying up single-family homes since the 2008 financial crisis, a Dallas-based startup has grown rapidly through connecting those big landlords to contractors such as plumbers and electricians.
Stellar, formerly known as IFM Restoration, landed a new $20 million investment that brings its total venture capital to $35 million, the company announced Thursday. The funding came from new investor Weatherford Capital as well as previous investors Brick & Mortar Ventures, S3 Ventures, Alerion Ventures and Navigate Ventures.
Dustin Marx and Danny Feldman founded the company in 2016 to build an online marketplace that would pair contractors with property owners. Marx said Stellar can help quickly connect renters to critical maintenance workers during major weather events, such as the winter storm in February 2021.
“No one’s really looking out for the little person, the renter and the contractor; that’s really what it’s about for us,” he told The News.
In 2020, the startup received $10 million from early-stage investors S3 Ventures and Brick & Mortar Ventures after raising $1 million in seed capital.
Stellar’s clients now include 10 of the 11 largest operators of single-family rental homes in the nation, including American Homes 4 Rent, Main Street Renewal, Pathlight Management, HavenBrook Homes, Progress Residential and Tricon Residential.
The company estimates that it will have serviced around 50,000 properties total in 2022 by the end of the year. It expects to double that in 2023.
Through the new investment, Stellar plans to enhance its technology, launch a new mobile app, significantly increase its workforce and expand into more U.S. markets.
One of the technology investments will be to adopt artificial intelligence and machine learning to make sure residents get the right contractor for their specific situations, using data captured from the almost 200,000 maintenance requests the company has handled so far.
Stellar has created work for more than 8,000 contractors in cities across Texas, Oklahoma, Arizona, Florida and Indiana. It has plans to expand into more cities in the Sun Belt and the Rust Belt.
“In essence, what [contractors] love doing is solving problems with their hands; we enable them to do more of that,” Marx said. “They spend more time working, so they make more money with us.”
Stellar has more than 80 employees and plans to expand its head count 60% to 70% by the end of 2023, focusing its hiring on operations, sales, marketing and technology.
The company changed its name in September to be simpler and easier to remember.
“We wanted to clearly articulate the experience that our employees would have, that our customers would have, that residents would have, that contractors would have,” Marx said.
Alongside the new financing, David Seider, principal of Weatherford Capital, will be appointed to Stellar’s board of directors when the deal closes. Weatherford Capital is a family-owned investment firm founded in 2015 with offices in Tampa, Florida, and Dallas.
“Stellar’s impressive growth, combined with a rising number of U.S. households choosing to rent instead of owning a house, underscores the company’s position as a market leader,” Seider said.
Stellar also recently named a new chief technology officer, Renaud Casanova, whose experience has included leading the global expansion of Enjoy Technology Inc., deploying an in-seat delivery and ticketing system for the San Francisco 49ers and prepping Facebook for its initial public offering.
