Apartment search and rent payment app RadPad of Santa Monica announced it raised a $9 million Series A investment round today to expand listings and grow the company’s local promotional teams.
Investment was led by Altpoint Ventures, with participation from Goldcrest Investments. The round brings total investment in RadPad to $13 million.
Founded in 2013, RadPad said it now has 600,000 apartments and homes listed, more than 1 million app downloads and an operational presence in Los Angeles, Chicago, San Diego, San Francisco, Miami, Houston, Seattle and Washington, D.C.
Despite growth, RadPad is still an upstart in a crowded market where a large share of business is taken by websites like Craiglist.org, Apartments.com and Los Angeles rental site WestSideRentals.com. In recent years, those websites have improved their mobile viewing experiences and added free apartment listing features, bringing them closer to RadPad’s offering.
RadPad takes a 3 percent transaction fee from users paying rent with a credit card, which could amount to a hefty chunk of revenue as it scales: American apartment dwellers pay $440 billion in rent each year.
Yet despite rapid growth and some early revenue from transaction fees, RadPad doesn’t expect significant revenue for some time.
“We’ve decided to continue to defer monetization in order to grow to a substantial scale,” said Chief Executive Jonathan Eppers.
Key to those user acquisition plans is adding more on-the-ground promotional teams and continuing to use tried-and-true apartment promotions.
“Lawn signs are a very, very effective marketing tool,” said Eppers. “In L.A. and Chicago and D.C. those lawn signs have done wonders for us.”
The company said it also has had success sending promoters to farmers markets, the beach and music festivals.
Promotions aside, Eppers credits expansion to the company’s focus on weeding out fraudulent listings, improving apartment pictures and bettering the mobile phone viewing experience.
“I think this is unique in this space because the incumbents set the bar so low on the renter side,” Eppers said.