Agya Ventures revenue, CEO Kunal Lunawat, team size, customer count, churn, and more in 2023.

hey folks my guest today is kunal lunavet he's building a company called agya ventures it's helping it's he's built the fun to invest in the future of the built world kunal you're ready to take the top awesome thanks for having me over nathan you bet thanks for coming on so just be clear this is not a sas company you're building a fund correct that's right it's an early stage pc fund okay and are you investing in any sas companies focused on the space or no right uh so we're investing in seed and series a stage companies focused on real estate a part of that could be sas business models that we'd look at and have you deployed any capital to date in sas companies focused on real estate correct we made five investments so far and two or two of them are sas companies great tell me more about the fun did you come as a you know were you an operator you sold and then you you launched the fund or you have always been sort of on the fun side uh no it's been it's been an interesting journey to this point nathan um so i grew up in india my dad's a first-time entrepreneur he's a real estate developer back in india so kind of grew up in that environment uh came stateside for college and then my first job out of college was at blackstone real estate uh so made a bunch of real estate right equity investments there across different asset classes i went to business school after that at that point i got more interested in product and tech uh then helped out a couple of friends with their prop tech companies and then eventually um by happenstance i i got a call by a japanese real estate developer to help them run their corporate venture capital arm base of tokyo they were looking to do more things in the us uh this was in 2019 so i went visited tokyo spoke to this company and kind of got connected to two more institutions and they wanted me to do the same thing which is helped their cvcs gain more exposure to us based prop tag so at that point i kind of built out this consulting business which was the first iteration of archaea ventures as the business kind of kept growing at that point i convinced my now co-founder and gp in the fund nobu who is my classmate in business school to join the team so we kept on building the consulting side of the business and last year we went back to some of our japanese institutional clients and they participated as lps in the fund so kind of fast forward to today we spend i would say 75 to 80 of our time as a team on the fun side and the remaining 20 of our time on the consulting side how large is the consulting business what was revenue in 2020 just on that that part of the company uh it was a little less than half a million dollars okay got it so it's really more of an excuse for you to get connected to these folks while you focus on the fund exactly interesting now did you and your partner split were you friendly did you just split carry 50 50 or how do you how do you do that when you launch a fund how do you talk about carry splits sure um so it's um you know there are a few things that you need to bear in mind it's the uh it's the amount of work that's already been put in um it's the experience in the background that you're bringing to the table um and it's the optional cost of each founder uh for kind of you know leaving their existing jobs to start something like this uh bear in mind that the you know the the cad interest for fund one may not be the same as that for one two because by the time you're looking at front door it's more more more of an established vehicle so you know the economics might change at that point so how much did you guys raise for fund one are we still raising so we are not allowed to disclose uh but we're looking at a 45 to 50 million dollar fund uh ballpark we're 50 on the way there and are you selling sort of the you know two and twenty model you're selling sort of forty five percent irr is there a fixed hurdle or something unique about it it is a two and twenty model um and um it's pretty market standard in that perspective okay let's talk more about now we understand a function let's talk more about real estate and there's a lot of folks saying you know obviously the fed is printing money actually most world banks are now printing money like crazy and you've got large private equity firms like blackstone actually sort of buying up the american dream storing money in real estate many people are saying for the consumer owning a home is dead prices are too high because these funds are bidding it up you have some experience here is the american dream dead owning a home uh well what we see is actually quite the opposite um last year um you know was the best year for residential home sales in in the last 15 years or so uh mortgage rates are at an all-time low um there is some concern that you know institutional buyers are crowding out the individual homeowner uh but all said and done we still think that you know there's space for everyone to operate and we're seeing home ownership levels go up you quoted residential home sales but how do you split out the buyers of those residential homes into cohorts consumers like you and i versus big funds institutional funds buying it isn't isn't that a bad proxy to use just pure residential home sales true that's a good point um and really if you want to slice and dice it more nathan you know there's the individual homeowner that's buying a home for the first time there's an individual homeowner that's buying a vacation rental or a second time home as a rental property and then among the funds you've got the you know small to mid-sized funds that are buying anywhere between 2200 assets and then you've got you know the large price equity funds that are buying 10 000 assets at time um so you've got the whole spectrum uh there are certain markets for sure where the large price equity funds are buying you know thousands of assets and that's crowding out the market but uh even then if you look at like the total volume of residential sales across the us that's still a fraction of the total market so to say that you know large real estate bracket refunds are kind of dominating the u.s home residential market i think would be factually incorrect do you believe we're an inflationary environment with so much money floating around and you're that's why we're seeing these crazy asset prices i do believe that you're seeing some indications of inflationary trends uh but at the same time you know from a macro perspective you've never seen anything like this before the rate at which vets printed money interest rates at an all-time low so there's something we said about maybe this is the new normal yep interesting okay how is all of this funding a thesis a core belief you have about property and then how is that determining and how is that guiding you in terms of where are you playing capital in the prop tech companies um i think you know last year uh was kind of a watershed here for us and prof tech some of the trends that we've been looking at kind of got accelerated by more than 10 years and to give you a sense you know we divide real estate across a few different asset classes so when you look at office uh this whole trend around healthy buildings and technology promoting healthy buildings has been accelerated when you look at you know residential um the one one underlying theme that we're backing pretty strongly is community and having a sense of community and multi-family properties and any technology that kind of promotes that when you look at hospitality i mean the hotel sector was really badly hit you had occupancy levels at all time lows across major markets in the u.s and usually it's during those points where the propensity to adopt technology is at an all-time high among property managers and hotel owners and operators if you look at retail brick and mortar retail almost you know was again struggling so anything that brings people back to malls and makes it more experiential and technology that drives it is something we are bullish on on the flip side of retail struggling nathan was e-commerce was on fire and as a result you know you barely had any spaces in warehouses so we had warehouse owners and operators come to us asking us for technology product uh that would make these warehouses more efficient so that's that's what we've been looking at you know across the five to six different asset classes in real estate have you made a bet there and then specifically in the warehouse space making it more efficient and if so what was the company you wrote a check into we're actively looking at the space we haven't made a bet yet okay where happy place bets you've written five checks i think sure um so we've invested in the hospitality space we've invested uh in the senior living space we've written two checks in the residential space uh and then we run one check in the retail space can you show are any of these public already can you share the story of these companies and what they're doing sure uh we can share um uh we can share four of the five okay let's see can you show the senior living one yeah sure um so actually that's the one that's uh that's on the stealth so yeah okay what about what's about one of the residential checks one of one of the two checks there yeah uh happy to talk about both of them so one of the companies was the name of the company's rumor r-u-m-r um great founder's story the founder's name is jordan allen he was previously the founder of this company called stay alfred which is a short-term rental company scaled it to 100 million dollars in revenue and then the business shut down during the pandemic and he had to stop the business um so this is his second rodeo and what's what's really interesting and fascinating is um each one of his competitors in the business invested in the new company that he started which goes on to show the command that he respects in the business right uh his new company is predicated around bringing more transparency in the home sales process and the way he's doing that is by building a bidding platform where you as a seller can put your property for sale and as buyers you can bid on the property and you can see for live uh you know where the property is currently at and what's the latest bid and what what that kind of solves for is a lack of transparency in the home sales process and second you know if you're a home buyer and if you've set your eyes on your dream home and you're bidding say 250 000 and then your broker comes back and tells you that hey we lost the property by two two and a half thousand dollars you don't want to be in that situation right so this bidding bidding platform kind of solves for that so that's a company that we recently invested in and what was the check size there uh we wrote a 250 000 check in that company and that was a traditional sort of seed or series a ah there was a seed stage safe note seed stage shape okay got it were you guys the lead there were the only investor uh we won the league there uh there are a bunch of other investors a pretty high profile names as well um one of them is adam newman the former founder of rework yeah is that i'm trying to think after the after the documentary came out is that a good check to have on the cap table or a bad check to have on the cap table um so i would not you know opine much on how we work with one as a business um but the fact is that if you think about a proptech business that's been scaled faster anything there's a few proof points on rework if you think about a category being created in the office space i mean co-working as a concept was introduced and made global by viewwork so to have you know those insights in terms of how to make a business go global and how to scale something that fast i think there are fewer people better positioned to do that than the current teams that we have in the gap table yeah i mean look the hit there on wework would be anyone can raise 20.6 billion dollars spend 10 billion and have a company worth 10 billion at the end or less um you know to your point what you're basically saying is but getting on the cap table you get all the lessons learned from spending 20.6 billion in the category and hopefully save some money yourself at rumor um i'd have a more positive spin towards that which is not everyone in the world can raise 20 billion dollars so you find me five people and i'll speak to all five of them totally understand but i just have to i mean we work is worth 8.5 billion today market cap right they raised 20.6 billion that basically adam has lost more money than any other founder almost on earth over the past decade to your point though obviously a lot of learnings there as well i'm only pointing that out because one of the themes on the show is like we don't we don't advocate people always going out and trying to raise capital at all costs and wework is probably an example of one of the most egregious i mean adam's is a great storyteller he raised like crazy softbank push the rays obviously but ultimately didn't create value in terms of market capitalization but again highly strategic makes sense why you guys obviously did that deal with him it makes sense why a lot of prop tech folks want him on the cap table so totally understand that um what about the hospitality space can you tell us the story there sure um so we invest in this company called stay flexi um it came out of y combinators last cohort um they're building the modern os for hotel owners and operators um and uh way to think about it is you know the initial wedge the foot in the door for them is allow flexible checking and checkouts uh so nathan you may have gone to a hotel room you know you your flight may have landed early and you want to check in at 9am but you can you could only check in like post 2 p.m and then you wanted to say check out late but you had to check out by 11 am so what stay flexi solving for essentially at the point of sale when you're making a reservation you get to select the r that you can you want to check in so it could be 9 a.m 9 30 a.m 10 a.m and then you also get to check out the r that you want to check out could be 3 p.m 3 30 p.m and 4 p.m turns out to actually have this flexibility is a pretty complex problem at the back end so they're building software and product for the property managers to kind of still run the ops of the hotel business while solving for this at the front end isn't the harder part in that two-sided marketplace not lining up the the hospitality folks but actually getting consumers to use you to book the reservation over a hotel tonight expedia and all the other hundreds of folks in the space excellent question so that's exactly what they're working on now which is to integrate this product with the leading otas so if you go to an airbnb or booking.com expedia you would have that option to book by the r i see so we'll stay flexible in the background i will be more of an api running on the back end or will you see power by state flexi on on airbnb they're they're still trying to figure out both strategies interesting so so how do you work with donna you write the seed check i mean do you get active in product discussions with these founders you sort of write the check and move on we love to get active with the founders so just with the case of state flexi one of things we've been focused on is the go to market strategy we've been having daily calls for the founding team um we are looking at bringing on board a couple of pretty senior advisors from the hospitality industry because i think you know there's a lot of progress that we made on the software and product side now we want to understand the nuances of the industry and make sure that we are also focused on the top line and the product market fit um so that's that's been a lot of things we've been doing we've been helping them with hiring uh we're looking to get onboard a vp of sales for the team and they've been interviewing candidates along with the ceo um and also this depends on you know how much the portfolio companies want us to get involved um you know there's some times where the founder wants to check in once a week and that's fine by us the times when the founder wants to check in once a month that's also fine by us our role is to be available and to be cognizant of what the founder might need and be prepared when he or she reaches out let's talk about the flip side there's a lot of founders listening right now thinking maybe i want to go raise my seat round but i don't want to make mistakes what's the biggest mistake you see founders make when they're pitching you to write their seed check um the biggest thing we've come across nathan is not having focus or clarity of being able to communicate what the value proposition is if you're not if you're confused about your value proposition and where the products headed it's very tough to convince that to someone else feed that to an investor or to someone in the sales cycle and what that also tells me is you know getting to that level of clarity which is you know being brief and concise and punchy actually requires a lot of work it requires you to have had made like a bunch of iterations with the product and with your pitch so if you're coming in with a brief concise punchy pitch that tells me that you're putting a lot of thought and effort and work towards this the flip side to that is a genius engineer that is that is product engineered his or her way to growth but can't market herself or but they've got incredible traction metrics what about a founder like that um great question and you do account for that right i mean on one hand you want to have a great salesman or sales woman making the pitch on the other hand you also want to look at the metrics and sometimes the metrics speak for themselves uh what you know what what we would also often advocate is if we do come across you know founding teams such as that where it's like a one-sided a unidimensional funding team at the outset we would encourage them to kind of build out the team in a more holistic manner uh if we were to invest in that company so if you have an engineer you want to bring on the sales capacity very cool quinoa this is good stuff if you want to learn more about you and the fun where can they find you online uh it's aagiaventures.com that's agyaventures.com guys there you go again a lot of sas companies they start off as an agency they pivot into sas they take success it sounds like vc firms also sometimes start us consultants or agencies they're doing five hundred thousand bucks a year in consulting in the prop tech space now raising their first 45 million dollar fund uh more than we'll call maybe flirting with about halfway there but already writing checks into hospitality space senior living residential and uh anything related really prop check there quina appreciate you taking us to the top thanks steven one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathanwacka.com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that i appreciate your guys's support all right i'll be in the comments see ya