Clever Real Estate, a tech startup that connects consumers with top real estate agents in their area who help sell their home, announced on Tuesday that they have successfully closed a seed funding round of $500,000.
“Selling a home is still a complicated process,” said Ben Mizes, CEO and Co-Founder of Clever Real Estate. “Most sellers want to save on commission, but they still need a professional to help guide them through all the paperwork and negotiations before closing.”
Standard commission to seller’s agents ranges between 2.5 and 3 percent nationally and is even higher in some areas. Clever agents charge a flat fee of $3,000 for homes priced below $350,000, and a 1 percent commission for homes priced higher.
Mizes said that Clever strikes a balance by connecting sellers with a full-service agent who can guide them through the process of pricing, listing and selling a home, but for a fractional commission.
“Technology has made it cheaper and easier for real estate agents to help their clients sell homes,” said Bill Schmidt, individual investor in the seed round and Managing Partner of Cultivation Capital.
Schmidt said that real estate agents who adapt to tech platforms can reach clients in ways they couldn’t without companies like Clever Real Estate.
“Today, as many as 90 percent of buyers are finding their home on the internet,” said Schmidt. “That means that agents who embrace modern efficiencies can provide the same service clients expect for a fraction of what they used to charge, and still make a profit.”
Mizes said that Clever Real Estate has seen action nationwide with pockets of seasonal activity.
“We did really well in places like Florida in the winter when people are wanting to buy or sell homes there,” said Mizes. “Now we’re seeing it shift to the rest of the country as it becomes spring and summer.”
Clever Real Estate is positioned to do business from coast to coast, but the company is a homegrown success story for the startup ecosystem in St. Louis.
Mizes had the chance to take Clever to an incubator on either coast but ultimately decided on St. Louis’ Capital Innovators accelerator, a competitive program that connects top startups with mentors and resources in the region.
“Capital Innovators only invests in six companies, so you’re getting really hands-on mentorship,” said Mizes. “There’s a huge startup ecosystem now in St. Louis with TREX and Cortex, the whole district, […] and a lot of people who are behind you and willing to support you.”
After completing the Capital Innovators program, Mizes said he couldn’t imagine building his company anywhere other than the Midwest.
“The biggest thing is the cost of hiring and living in the city,” said Mizes. “[Now], we can take our $500,000 and we can get an affordable office space, we can hire incredible talent at affordable rates. You can almost do 2-3 times the output in terms of manpower and space in the Midwest compared to having to do it in San Francisco.”
Clever’s investors represent some of St. Louis’ largest venture capital firms.
Personal checks were written by prominent venture capitalists in the St. Louis area to close out the funding round. Individual investors included Bill Schmidt, Managing Partner of Cultivation Capital; Pat Steinlage, Managing Partner of Pinpoint Holdings; and Bill Donius, former CEO of Pulaski Bank.
Clever Real Estate currently has a team of 12 including a content and SEO team and seven in their St. Louis sales office, as well as a marketing team in Australia.
Clever Real Estate plans to use the investment to expand its sales team, develop its software infrastructure, and expand outreach to new local markets.
Christine McGuigan is the Managing Editor of Silicon Prairie News