VTS founder and ex-CBRE CFO join Withco
A US startup that seeks to make commercial real estate ownership accessible to small business owners, has hired two industry veterans in a drive to become a “true institutional investor”.
Mirroring residential rent-to-own products – some of which have raised hundreds of millions of investor capital in recent years – Withco describes itself as a social impact-driven company that helps small businesses become commercial property owners.
Because commercial mortgages are usually out of reach for small businesses due to the size of the down payments required, Withco buys the space in partnership with business owners.
Instead of securing a traditional lease, users incrementally pay Withco to transition to full ownership over the course of what would be the lease term.
Streamlining the market
While Withco’s major selling point is helping small businesses (founder Kevin Song was inspired by his parents who lost their store in Brooklyn when the space they rented switched owners and their rent doubled), the product also taps into an under-developed part of the investment market.
The company said that while small commercial real estate spaces see more than $90bn of deal flow annually, the market lacks a buyer who can efficiently price and purchase these investments.
With data-driven pricing models, backing from major investors and partnerships with landlords and agents, Withco aims to become what Song has described as a “true institutional investor”.
Appointing proptech and real estate veterans
Commenting on Stearns’s appointment, Song said: “Leah comes with a wealth of industry knowledge, strategic finance expertise and the rolodex to navigate the complexities of the CRE space.
“She’s building us into a true institutional investor with the finance muscle and capital needed to support thousands of small businesses.”
Stearns, who recently left CBRE, had planned to take time off before her next role, but she reconsidered after meeting Song and investing in their fundraise.
She said: “I met Kevin and was immediately excited to help small businesses build equity in their communities. Having grown up in the Hudson Valley, I know how important our local small businesses were, and how important they are to each community they serve.”
As the company’s new engineer, VTS founder Karl Baum will take on the responsibility of making Withco more efficient and better at “programmatically” purchasing commercial real estate space.
His understanding of CRE tech and data make him “mission-critical” to the company’s plans to “dramatically scale”, Song said.
Baum added: “It’s exciting to join a company at the intersection of commercial real estate, technology, and social impact.
“I was excited to hear about Withco’s pioneering financial product and technology platform that enable it to provide property sellers, their brokers, and small business owners a simpler, faster, and more rewarding experience across the full property lifecycle.”
Headquartered in New York, the startup plans to complete 100 deals across the US by the end of the year.