PayHOA, a formerly bootstrapped Kentucky-based startup that provides software for self-managed homeowner associations (HOAs), is an example of how real-world problems can be transformed into opportunity.
It has raised a $27.5 million Series A round in an environment where near-$30 million Series A rounds are no longer common.
PayHOA Founder and CEO Mike Bollinger is putting his finance degree to good use. The entrepreneur launched PayHOA in 2018 after selling two other companies — LegFi.com, a startup focused on fraternity and sorority financial management, and File990.org, which handles nonprofit tax compliance needs — to TogetherWork in 2018. .
Bollinger says the experience working with volunteer-based organizations heightened his desire to create pehoa,
“While larger companies hired professional property managers, self-managed HOAs struggled,” he told TechCrunch. “They were forced to cobble together solutions with unrelated devices or generic software not designed for their specific needs – some even came to us with shoeboxes of paper receipts.”
Bollinger says PayHOA’s SaaS offering acts as a “central hub” for association board members, handling finances, maintenance requests, and communications with their communities.
Notably, PayHOA says it’s profitable (with positive EBITDA), which helps explain how it’s in such good shape in a challenging fundraising environment, especially for a non-AI startup. K managed to reach the Series A round. The 15-person startup reported revenue growth of more than 70% year-on-year. It has over 652,000 users, and makes money by charging a monthly membership 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 The share of community associations is 30% to 40%Composed of 2.5 million volunteer board members.
According to Bollinger, the decision to raise external capital for the first time stems from PayHOA reaching a critical inflection point.
“We found product market fit and were growing rapidly,” he told TechCrunch. “The additional capital and investor guidance will take the business to the next level.”
The new funds will be spent mostly on product development and deployment. PayHOA plans to grow its team by 40% in 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 over $1.6 billion in invoices since 2018.
Looking ahead, PayHOA doesn’t have plans to expand outside of community management, but Bollinger has seen an increase in the number of property management companies signing up for the platform – opening up the company’s total addressable market.
“Many HOAs manage their own communities, and for too long, their needs have not been fully addressed,” said Peter Fallon, a general partner at Elephant Ventures, the firm that led the round. , said in a written statement. “PayHOA recognizes this gap and offers a comprehensive platform designed specifically for self-managed HOAs. This empowers them to access powerful tools usually reserved for larger communities.
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