PayHOA is a Kentucky-based, self-founded startup that provides software for self-managed homeowners associations (HOAs) and is an example of how real-world problems can turn into opportunities. is.
The company 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 is putting his finance degree to good use. The entrepreneur has two other companies: LegFi.com, a startup focused on financial management for fraternities and sororities, and File990.org, which serves the tax compliance needs of nonprofits. He started his PayHOA in 2018 after selling it to Togetherwork in 2018.
Bollinger said his experience working with volunteer-based organizations spurred his desire to create PayHOA.
“While large corporations catered to professional property managers, self-managed HOAs struggled,” he told TechCrunch. “They were forced to assemble solutions using disconnected tools and generic software not designed for their specific needs. Some people came to us with it.”
PayHOA's SaaS service will serve as a “central hub” for association board members, handling finances, maintenance requests and communications with the community, Bollinger said.
In particular, PayHOA says it is highly profitable (with positive EBITDA), which explains how it managed to secure such a decent-sized Series A round in what remains a tough funding environment, especially for non-AI startups. This will help explain how it worked. The 15-employee 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. Rates start at $49 per month for his HOAs with 25 units or less. His self-managed HOA is made up of 2.5 million volunteer officers, representing 30% to 40% of the neighborhood association.
Bollinger said the decision to raise external capital for the first time stemmed from PayHOA reaching an important inflection point.
“We saw the product fit the market and were growing rapidly,” he told TechCrunch. “The additional capital and guidance for investors will take the business to the next level.”
The new funding will be primarily used for product development and hiring. PayHOA plans to grow its team by 40% across engineering, sales, and support. The company also announced its Payables module today. Bollinger said the module 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 beyond community management, but Bollinger has noticed an increase in the number of property management companies signing up to the platform, opening up an entire addressable market for the company. doing.
“Many HOAs manage their own communities, but for far too long their needs have been underserved,” Peter Fallon, general partner at Elephant Ventures, who led the round, wrote in a statement. mentioned in. “PayHOA recognizes this gap and offers a comprehensive platform designed specifically for self-managed HOAs. This provides powerful tools typically reserved for large communities. will be able to access it.”