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8/2/2019 Kwelia Investment Deck 020812
http://slidepdf.com/reader/full/kwelia-investment-deck-020812 1/15
8/2/2019 Kwelia Investment Deck 020812
http://slidepdf.com/reader/full/kwelia-investment-deck-020812 2/15
Kwelia:
Real Estate AnalysisRe-invented
What we do
Kwelia is an analytics platform for
residential rental real estate. Our data-
driven and quantitative approach
leads to sharper decision-making for
rental apartment transactions.
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Two Problems
1. Rudimentary Rental Analysis
Rental market analysis severely lags behind
modern advances in technology.
The Status Quo
Pricing and other assumptions are typically
derived by either:
1. Guessing
2. Relying on biased sources
3. Repeating historical patterns
2. Messy Rental Markets
Compared to for-sale markets, rental
markets are unstructured and opaque.
The Pain is our Opportunity.
Billions of dollars are lefton the table each year bylandlords and propertymanagers.
RENTALMARKETS
FOR-SALEMARKETS
Transparency
S t r u c t u r e
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Our Solution
BIGDATA
REALESTATE
QUANT ANALYSIS
Our platform is positioned at the nexus
between big data, quantitative analysis,
and real estate to deliver groundbreaking
intelligence to the multifamily industry.
We’re bringing institutional-grade analysis
downstream.
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Unraveling theKwelia PlatformWe are creating the most comprehensive
database of past and present rental listingdata ever compiled.
We apply our proprietary algorithms and
modeling techniques to derive meaning from
these noisy datasets.
We supplement the quant analysis with
qualitative real estate knowledge.
BIGDATA
QUANT ANALYSIS
REALESTATE
Partnerships
Currently negotiating with apartments.com
Discussions commenced with olr.com,
nakedapartments.com, and move.com
Technology
Our proprietary web crawling platform
continuously monitors, archives, and cleans
online rental listings.
Multivariate Analysis
We use hedonic regressions and otherforms of multivariate analysis to make sense
of these datasets.
We are developing algorithms that
recommend more optimal rental pricing,
renewal rates, unit mixes, and lease terms
to clients.
Technology
Our analysis is more than a black box as we
supplement quant output with data on things
like the macroeconomy and other market
factors.
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Why RevenueManagement?Once a tool only used by institutional entities,
revenue management is quickly becoming astandard software application among
landlords and property managers of all sizes.
“All of the public REITs except one use a
revenue management software, and all of
them use some type of revenue management
strategy…[t]he thing that was most
interesting to me…was the number of smallerowner-operators…that have invested the
time and energy into adopting a revenue
management strategy.”
—Steve Lefkovits, president and chief
executive of Joshua Tree Internet Media2
1. According to Robert C. Cross, President ofRevenue Analytics, Inc.
2. Hudgins, Matt, “When Apartment Rent Climbs,
Landlords Can Say ‘The Computer Did It’.” The NewYork Times 29 Nov 2011
3 Arguments for Revenue Management Software
1. Revenue growth
There is typically a 3-7% increase in revenue across
industries when a revenue management system is in place.1
2. Multiplier Effect on Value
Small increases across a portfolio can be immensely
valuable, particularly at the end of an investment term when
a sale or refi is being considered.
3. Isolation of other Problems
Implementation of a revenue management system can help
point to flaws in other parts of landlord businesses ranging
from marketing to maintenance.
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Competition inRevenueManagement
Yieldstar LRO Kwelia RM
Infrastructure On-Site Servers On-Site Servers Cloud
Scope of Analysis Property specific Property specific Market-wide and
property-specific
Pricing Structure $25k minimum set-up fee;
$2 — $6 per unit per month
$25k minimum set-up fee;
$2 — $6 per unit per month
Subscription-based, tiered
for product robustness
Yieldstar Optimizer by Real Page and
Lease Rent Optimizer by Rainmaker are the
two leaders in revenue management for
the multifamily industry.
Kwelia’s product offeringis truly the next generationof revenue management
software. Its simplicity,affordability, andconvenience make it anattractive product that is
poised to challenge thecurrent field.
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The Market forRevenueManagement
Software
Of the 40,703,218units for rent in
the US, only 15%use optimizationsoftware.
Huge Market
Based on rental transaction volume alone, the
multifamily industry is a $350 Billion industry.
Real Estate
Of the 40,703,218 units for rent in the US,
only 15% use software for pricing and other
assumptions.
Other Industries
This can be contrasted with airlines, rental
cars, and hotels where there is near 100%
adoption of optimization software.
40,703,000 is according to the 2010 US Census
15% is according to multifamilyrevenue.com
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Our PilotProgram
Pilot Program Participant Profiles
Landlord Footprint Portfolio Size Status
The Galman Group PA, DE ~6,000 units Data received
Korman Communities Nationwide ~10,000 units Awaiting test property data
Allan Domb Real Estate PA ~1,000 units Data received
Campus Apartments Nationwide ~35,000 beds Follow-up meeting scheduled
Brownstone Apartments PA ~200 units Data received
A diverse group of five evangelical landlords
have agreed to participate in our pilotprogram. Their eagerness to participate
underscores the market’s frustration with
the current revenue management offering
and the demand for a new solution.
Pilot Milestones
Test ProductDetermine Sales Cycle
Determine Pricing
Refine Product
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Exit Potentials
M&A Activity
Real estate technology as a sector has seen
heavy M&A deal volume of late. Notabledeals include:
PropertyShark by Yardi in 2011
Mynewplace by Real Page in 2011
Vaultware by MRI in 2011
Level One by Real Page in 2011
Rentbureau by Experian in 2010
The Property Management Suite
Internet Listing Services
Resident Screening
Online Applications
Lead Generation/CRMs
Reporting and Accounting
Analysis and Information
Online Payment Processing
Electronic Documents
Revenue Management
Revenue Management and heavy analytics are often themissing links to the property management suite. Only Real
Page and Yardi have the complete suite of products.
Other players want to expand their suite to incorporate all
links of the chain. We have commenced discussions with
On-Site.com and are doing a 3rd party integration of our
product with AMSI’s Reporting and Accounting software at
the request of a pilot client.
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What’s Next?
Our Product Pipeline
Revenue Management for Self-Storages
Revenue Management Commercial OfficesDecision analysis for Consumers
Decision analysis for Developers
Additional Lines of Business
Direct Raw Data Sales
Reports and Analytics
Kwelia seeks to develop anarray of products beyondrevenue management to
disrupt the archaic methodsof analysis in the real estaterental market.
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Our Team
John Njoku
Founder/Chief Strategist
Duke University
Bachelor of Arts in Economics andPolitical Science
Stanford Law School
Juris Doctorate
Columbia University
Master of Science in Real Estate
Development
Greg Phillips
Co-Founder/Chief Engineer
Cornell University
Bachelor of Arts in PhilosophyConcentration in Information Science
3 Years Experience
Developing demand forecasting
solutions for consumer packaged
goods
Chris Connell
Co-Founder/Chief Economist
Utah State University
Bachelor of Science in Economics
University Of East Anglia
Master of Science in Economics and
Finance (Masters’ Dissertation; Airline
Pricing: An Alternative Approach)
Founder: Philadelphia Predictive
Analytics Meetup
THEREAL ESTATE
GUY
T H EBIG DATA
G U Y
T H EQ U A N T
G U Y
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The Ask
We have an open round of funding with a
target of $300,000.
This funding will seed the company as itrefines its revenue management product
through its pilot program and explores the
development of products in its pipeline.
With intentions to stay lean, it is intended that
this round of funding will last 12 months.
Milestones to be Met with Funding
1. Recruit engineering generalist to join the team.
2. Test and refine revenue management product through
pilot program.
3. Test and determine pricing structure for revenue
management product.
4. Begin exploration and development of ancillaryproducts in pipeline.
5. Commence marketing and branding strategies through
presence at tradeshows and conferences.
$300,000
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