One month before the coronavirus pandemic began, proptech startup Swivel raised $8M to launch its digital office leasing platform nationwide.
The start of the crisis in March stunted the company’s expansion as office landlords cut back on spending, Swivel CEO Scott Harmon told Bisnow, but the startup has now landed three new partnerships that he says will help it take off.
The partnership is arranged to allow brokers to use the Swivel service at a discounted rate for the buildings they represent. This gives them a tool to help sign leases and earn commissions, while helping Swivel grow its network. The company didn’t disclose the size of the discounts, but Harmon said they scale up proportionately to the number of buildings a firm adds to the Swivel platform.
Harmon said Swivel had previously tried to add buildings to its platform by marketing directly to landlords, but he thinks having brokers bring it to the owners will accelerate adoption.
“When you’re a small company — we’re growing, but we’re still small — it’s easier to work with the thousands of real estate agency brokers that the landlords already trust to help them market their buildings,” Harmon said. “We thought it would be better to partner with their trusted advisers and work with them so that now we don’t have to establish a relationship all by ourselves.”
Harmon founded Swivel in 2017 in Austin and launched the platform in 2019. He started by expanding to Dallas, Houston and San Antonio. Then in February 2020, the startup raised $8M in a Series A round led by Breyer Capital’s Jim Breyer. JLL Spark, the brokerage firm’s venture investing arm, also participated in the funding round. The funding was used to launch Swivel’s nationwide expansion.
After its slow start during the early months of the pandemic, the company built up momentum, as landlords became more comfortable spending money and were looking for new technologies to help their leasing efforts.
Swivel now has just under 100 buildings on the platform, and Harmon said it is on track to have over 350 by the end of the year. It has also continued to hire, and the company now employs 35 people.
He said the partnerships with the three national firms are a key step in its growth, and he aims to partner with more national, regional and local brokerage shops.
“There’s a million little companies, and a lot of those little companies don’t get to be bigger companies and you never hear about them,” Harmon said. “So turning that corner where you’ve got some of the biggest real estate brokerages in the world partnering with you means an awful lot, and it sure makes us feel pretty excited about the future.”
What makes Swivel stand out from other online office leasing platforms, Harmon said, is its digital twin technology. The technology creates a virtual copy of the space that can be altered to show prospective tenants various options for designing their offices.
“Our software platform allows landlords and tenants to visualize and negotiate exactly how a space would look,” Harmon said. “Traditionally people just use photography, even a 3D camera, but you’re photographing the existing condition, you can’t conceptualize ‘what if I want it to look this way?'”
JLL Managing Director Steven Hurwitz, who used the platform for six buildings before the firm announced its partnership with Swivel, said it was an ideal solution for landlords looking to adapt to the pandemic. Once it became more difficult for tenants to travel and tour spaces, he said leasing teams started looking for new technologies to offer virtual tours.
“You’re able to get more people virtually through the space, where in the past they would be reliant on pictures or they would have to travel,” he said. “So now, we can really show people our buildings and spaces, and not just what they look like today but what they could look like.”
While the pandemic has accelerated adoption, Hurwitz thinks Swivel will continue to be valuable to landlords and their leasing teams for the long term. He said he has heard from competing brokers who have asked him where JLL got the technology for its virtual tours, and he thinks more firms will soon adopt Swivel.
“One of the more complicated parts of our job is to help envision what the space is going to look like before it’s built, and this is a really cool architectural tool to help someone see that,” Hurwitz said. “It’s not just a COVID tool.”
Written by: Jon Bannister, Bisnow Washington, D.C