PayHOA, a previously bootstrapped Kentucky-based startup that offers software for self-managed homeowner associations (HOAs), is an example of how real-world problems can translate into opportunity.
It just raised a $27.5 million Series A round in an environment where nearly $30 million Series A rounds are no longer common.
PayHOA founder and CEO Mike Bollinger has been putting his finance degree to good use. The entrepreneur started PayHOA in 2018 after selling two other companies — LegFi.com, a startup focused on fraternity and sorority financial management and File990.org, which catered to nonprofit tax compliance needs — to Togetherwork in 2018.
Bollinger says experience working with volunteer-based organizations fueled his desire to create PayHOA.
“While larger companies catered to professional property managers, self-managed HOAs struggled,” he told TechCrunch. “They were forced to cobble together solutions with unconnected tools or generic software not designed for their specific needs — some even came to us with shoe boxes of paper receipts.”
PayHOA’s SaaS offering acts as a “central hub” for association board members, handling finances, maintenance requests and communication with their communities, Bolinger says.
Notably, PayHOA says it is profitable (with positive EBITDA), which helps explain how it managed to land such a decent-sized Series A round in what remains a challenging fundraising environment, especially for non-AI startups. The 15-person startup notched year-over-over revenue growth of over 70%. It has more than 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 account for 30% to 40% of community associations, made up of 2.5 million volunteer board members.
The decision to raise outside capital for the first time stemmed from PayHOA reaching a critical inflection point, according to Bollinger.
“We’d found product market fit and were growing at a rapid rate,” he told TechCrunch. “The additional capital and investor guidance will guide the business to the next level.”
The new funds will mostly go toward product development and hiring. PayHOA has plans to grow its team by 40% across engineering, sales and support. Today, the company also announced a Payables module, which Bollinger said uses Optical Character Recognition (OCR) technology to automatically scan and extract data from invoices. PayHOA has processed more than $1.6 billion in invoices since 2018.
Looking ahead, PayHOA doesn’t have 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 company’s total addressable market.
“Many HOAs manage their communities themselves, and for too long, their needs haven’t been fully addressed,” Peter Fallon, a 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 empowers them to access powerful tools typically reserved for larger communities.”
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