PayHOA, a previously created Kentucky-based startup that offers software for self-managed homeowners associations (HOAs), is an example of how real-world problems can be translated into opportunities.
It just raised a $27.5 million Series A round in an environment where Series A rounds of nearly $30 million are no longer common.
PayHOA Founder and CEO Mike Bollinger has been putting his finance degree to good use. The entrepreneur founded PayHOA in 2018 after selling two other companies: LegFi.com, a startup focused on the financial management of fraternities and sororities, and File990.org, which served the tax compliance needs of nonprofit organizations, to Togetherwork in 2018.
Bollinger says the experience of working with volunteer organizations fueled his desire to create payhoa.
“While larger companies catered to professional property managers, self-managed homeowners associations struggled,” he told TechCrunch. “They were forced to improvise solutions with disconnected tools or generic software not designed for their specific needs; some even came to us with shoeboxes full of paper receipts.”
PayHOA's SaaS offering acts as a “central hub” for the association's board members, handling finances, maintenance requests and communication with their communities, Bolinger says.
In particular, PayHOA says it is profitable (EBITDA positive), which helps explain how it managed to raise such a decent-sized Series A round in what remains a challenging fundraising environment, especially for startups. that are not ai. The 15-person startup posted more than 70% year-over-year revenue growth. It has over 652,000 users and makes money by charging a monthly subscription fee based on the number of units in the community. Prices start at $49 per month for HOAs with 25 units or less. Self-managed HOAs They represent between 30% and 40% of community associations.made up of 2.5 million volunteer board members.
According to Bollinger, the decision to raise outside capital for the first time was due to PayHOA reaching a critical inflection point.
“We had found product market fit and were growing at a rapid pace,” he told TechCrunch. “Additional capital and investor guidance will guide the business to the next level.”
The new funds will primarily go toward product development and procurement. PayHOA plans to grow its team by 40% in engineering, sales and support. Today, the company also announced an Accounts Payable module, which Bollinger says uses optical character recognition (OCR) technology to automatically scan and extract data from invoices. PayHOA has processed over $1.6 billion in invoices since 2018.
Looking ahead, PayHOA has no plans to expand outside of community management, but Bollinger has noticed an increased number of property management companies signing up for the platform, opening up the total market the company addresses.
“Many homeowner associations manage their communities themselves, and for too long their needs have not been fully met,” Peter Fallon, general partner at Elephant Ventures, the firm that led the round, said in a written statement. “PayHOA recognizes this gap and provides a comprehensive platform designed specifically for self-managed HOAs. This allows them to access powerful tools normally reserved for larger communities.”
