Commercial real estate development has many moving parts – parts that need to move in unison to ensure projects are completed in a timely manner and within budgets. However, most CRE development still relies on manual, data-entry tasks that are time-consuming, tedious, and prone to human error. Northspyre has built a cloud-based intelligence platform specifically made for real estate development that eliminates redundant work through AI-powered automation and gives development teams unprecedented insight into project delivery concerns. The platform can save up to 40% of the time that is typically allocated for data entry, giving teams more time to spend on high-value tasks. On the data side, the platform tracks all the data that flows through these CRE projects, enabling project teams to make better, faster, and more informed decisions while also providing critical and proactive alerts when projects are deviating. Northspyre currently serves 130+ customers and has managed more than $44B in customer capital projects.
AlleyWatch caught up with Northspyre CEO and Cofounder William Sankey to learn more about the inspiration for the business, the company’s strategic plans, latest round of funding, which brings the total funding raised to $32.5M and much, much more…
Who were your investors and how much did you raise?
$25M in Series B funding which was led by CRV, with participation from Craft Ventures, Tamarisc Ventures, and Des Traynor, cofounder of Intercom.
Tell us about the product or service that Northspyre offers.
Northspyre is a financial tracking and project delivery automation platform for real estate developers. It’s the real estate industry’s first purpose-built operating system for real estate owners and developers managing complex and well-capitalized projects such as ground-up developments, fitouts, and major renovations across all asset classes, including multifamily, office, retail, hospitality, and mixed-use. Northspyre’s solution utilizes modern technologies such as automation, data analytics, and artificial intelligence to put proactive, data-driven insights into the hands of development teams, transforming the way they approach the various intricacies of project delivery, vendor management, and capital deployment.
I founded Northspyre after spending years as a New York City developer overseeing projects for firms such as Madison Realty Capital, Macklowe Properties, and Jones Lang LaSalle. It was during this time that I experienced firsthand the inefficient, outdated methods utilized across the industry to manage billions in capital for transformative, complex real estate developments. I realized that the commercial real estate sector was falling far behind other high-skilled industries and needed to catch up. I envisioned a tailor-made, data-driven solution for owners, developers, and project management firms that could help professionals within these industries make faster, more informed decisions.
How is Northspyre different?
Northspyre is disrupting the extremely outdated, antiquated, and error-prone real estate development and capital management process. Most development teams today still manage hundreds of vendor contracts and invoices for a single project in spreadsheets, limiting their line of sight into the real-time status of project budgets. Project teams track everything from vendor contracts and expenses, to outgoing capital and change orders within spreadsheets – all of which are input and updated manually. Data within these spreadsheets are not stored in real-time nor is it universally accessible to all team members at any time. Northspyre leverages artificial intelligence, automation, and data analytics to completely transform this process, helping project teams reduce errors as well as escalated costs. Additionally, Northspyre utilizes all of the data it aggregates to offer up proactive insights from past projects to mitigate risk and inform current project outcomes.
What market does Northspyre target and how big is it?
Northspyre’s target market is comprised of real estate owners, owner’s reps, and developers managing complex multi-million-dollar projects such as ground-up developments, fit-outs, and major renovations across all asset classes. These development teams oversee managing contracts and invoices for more than 200+ vendors for a single project and keeping track of capital coming in and expenses going out to ensure projects remain profitable, are under budget, and are within the projected timelines.
What’s your business model?
What are your post-COVID office plans??
Our company mainly operates remotely with a small office in Brooklyn for those in the NY area that want to meet to work in person. We have no plans to change this setup post-COVID.
What was the funding process like?
The funding process is always fast-paced with many unexpected turns. In this case, we had built a relationship with Anna Khan from CRV over the last year. In many ways, we had a shared vision for the future of real estate project delivery and capital deployment. And so, when we decided to raise our Series B, CRV had a strong understanding of what we aspired to do. They understood our business, and we partnered up pretty quickly.
What are the biggest challenges that you faced while raising capital?
Even though we signed a term sheet with CRV relatively quickly, the most difficult part of raising capital is that the rest of your business doesn’t stop during the process. While you’re working to get the funding round closed you’re simultaneously pushing out new products, servicing existing customers, and growing your team. Juggling is the hardest part.
What factors about your business led your investors to write the check?
Northspyre is positioned for strong growth given the massive market opportunity. Real estate is one of the largest industries in the world and Northspyre tackles capital deployment across the design, development, and construction of real estate, which is the largest part of the world’s largest industry. We created a thoughtful product that was purpose-built to meet this need, which has been attractive in the eyes of investors.
What are the milestones you plan to achieve in the next six months?
Over the next six months, we hope to bring Northspyre to additional customers across the United States, launch new products, and continue to refine and improve our core solution.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
If you are able to, keep a line of sight to profitability. Growth is the most important thing when you’re a startup, but having a clear plan or roadmap to profitability can help you weather the ups and downs of shifting financial markets and business climates.
Where do you see the company going now over the near term?
We’ve facilitated $44B of projects across 130 customers in the US. We believe that if we can grow our team, we can serve hundreds of real estate teams across trillions of dollars in projects in the coming years. Additionally, we have an exciting product launch for two new products on Feb 22 that we hope will begin to transform the predevelopment process and the future of vendor discovery. We’re excited about what we have in store for 2022.
What’s your favorite outdoor dining restaurant in NYC?
I’ll go with 67 ORANGE STREET in Harlem. Fantastic cocktails.