Scottsdale Real Estate Tech Startup Raises $35M for New Growth Phase

By Andy Blye| Phoenix Business Journal

Jay McKee, founder and CEO of Lessen in Scottsdale, has high hopes for his young company.

“I think we’re going to build a brand that people know about in five generations, I really do. And I want it to be here in Arizona,” he told the Business Journal. “We’ll hit over 50 (million in revenue) this year, we’ll do over 150 next year, and we could have $1 billion in revenue within five years.”

Lessen, which opened for business on Jan. 1, 2020, is a startup tech company that connects property portfolio owners to service providers such as plumbers, house cleaners, electricians, roofers or general contractors.

On Thursday the company announced that it raised $35 million in Series A funding. McKee says this is just the beginning.

Today the company employs 150 people in 15 states, but it’s looking to fill an additional 300 jobs in the next six months.

In order to accommodate the growing team, McKee said the company is in negotiations to build out a 15,000 to 20,000-square-foot space at either the Galleria in Scottsdale or the Watermark in Tempe.

Lessen serves as a connector between property owners and more than 800 service providers on the platform, but it also provides some services itself, with more than 1,000 Lessen contractors on its books.

For large institutional landlords that have tens of thousands of properties, the Lessen platform gives them an efficient way to clean, renovate, repair and turn properties on a large scale.

The round was led by California-based Fifth Wall, which specializes in supporting proptech companies. Fifth Wall is also leading the special purpose acquisition company, or SPAC, that is set to take Scottsdale’s SmartRent public later this year.

Dan Wenhold, a partner at Fifth Wall, will join the Lessen board of directors as part of the capital raise.

The Lessen Series A funding also had participation from Khosla Ventures, General Catalyst Partners and Navitas Capital. The company has now raised $44 million in outside funding thus far.

McKee said Lessen raised this round with a $146 million valuation and that the company is hoping to close Series B funding in the next year at a valuation seven to 10 times greater.

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