It only takes a quick scan on Zillow to get a sense of just how unaffordable housing options are in a number of American cities.
With rent prices soaring well over $1,600 in the Atlanta area, the lack of affordable housing options is strongly tied to the labor shortage realities companies of all sizes are grappling with this year, PadSplit founder Atticus LaBlanc told Hypepotamus.
“Prices for rents and home prices continue to rise at historic rates. And that’s really constraining the ability of anyone in the workforce, particularly frontline workers, to be able to access housing opportunities that are anywhere close to their places of employment,” LeBlanc said.
PadSplit has been working on innovative solutions in the affordable housing and co-living space since its inception in Atlanta back in 2017. The marketplace focuses on providing housing options that best serve employees at schools, restaurants, hospitals, grocery stores, hotels, and government offices. The average PadSplit member pays just under $630 per month for rent, utilities, and other apartment-related costs, making city living more attractive and attainable for many workers.
Armed with a new $20.5 million Series B round, the team is ready to improve access to housing options in other cities while increasing financing options and the number of investors in the space.
Between The Rounds
Core Innovation Capital, Impact Engine, Citi, Alate Partners, Mark Cuban Companies, and Cox Enterprises, and others joined in on the Series B round.
“With our Series A, the mandate was really to demonstrate that we had viability in markets outside of Atlanta,” said LeBlanc. “And we certainly proved that. Moving forward, our major thing will be to continue to see how we expand and achieve the same unit economics in our new markets.”
PadSplit rooms are currently available in Atlanta, Houston, Richmond, Tampa, Indianapolis, New Orleans, and San Antonio, with other cities on the way.
Part of scaling PadSplit has been not only finding ways to tackle the housing crisis for individuals but also finding “fast and cost-efficient ways to create supply in a market with underutilized, wasted spaces,” added LeBlanc.
PadSplit has been growing at a fast pace since closing its Series A back in August of 2020, helping over 5,000 members find an affordable place to stay while providing access to needed services.
88% of PadSplit members report an improved credit score and increased monthly savings, according to the startup.
Growth over the course of the pandemic has not been without its struggles, LeBlanc added, given that PadSplit is working in cities with increasingly low housing inventory.
In order to scale more sustainable housing solutions, PadSplit will use the Series B funding to expand its turnkey solutions for people interested in real estate investing by providing additional financing, construction, and on-site management options.
To date, most of those involved in PadSplit have some sort of professional real estate experience, but LeBlanc said moving forward the team can “leverage some of our own resources in-house to source and acquire and provide financing for investors that are not necessarily professionals, but are interested in real estate and investing in making a dent in the affordable housing crisis.”
