Ryan Serhant isn’t your typical startup founder. That became obvious when a Netflix crew filmed our interview, which surprisingly is not a regular occurrence for Term Sheet. But as I learned while trying not to be distracted by the drone flying out of Serhant’s office window capturing wide shots, his fame is a feature, not a bug.
Maybe you recognize Serhant’s name from Million Dollar Listing or his new Netflix show, Owning Manhattan. Or maybe you’ve bought an apartment from the man himself or one of his rapidly growing army of brokers, all operating under his eponymous real estate empire, which closed the sixth most residential sales in Manhattan last year, according to the Real Deal. (Serhant tells me he’s opening in a new market roughly every 14 days.)
But now, Serhant wants to position himself as a tech entrepreneur, raising $45 million from the respected New York venture firms Camber Creek and Left Lane Capital and launching an app called S.MPLE, designed to help brokers navigate their sales.
Most software founders gain celebrity because of the success of their products, but from his flagship headquarters in SoHo, which greets guests with a massive statue of an S right inside the front door, Serhant makes a convincing case for why the reverse can also be true.
Through his reality shows and millions of social media followers, Serhant helped pioneer a new form of real estate sales, where brokers find buyers through virality rather than staid listings in newspapers and Craigslist. His average agent is 20 years younger than the industry average. “They only know their business through social media,” he tells me. The number one lead generator? LinkedIn.
Serhant describes S.MPLE as “Instacart for salespeople” (See, he really is one of you.) It wasn’t his first foray into developing real estate-focused tech, including an aborted metaverse platform called UNIVERS and a real-time video editing app called Spaces, which never took off with his agents. “I used to call them missteps,” he says. “I had to go through that process.”
S.MPLE came as a learning from his second attempt—that people want to spend less time on their screens, rather than more. The app allows brokers to automate parts of their sales process, from listings to communication. Rather than your typical SaaS product though, the real innovation—like Serhant’s brokerage business—is his distribution funnel. Every aspect of his operation, from social media to reality TV to actual real estate sales—works as a flywheel to generate more business. “Our customer acquisition cost is near zero,” he tells me. “If a significant amount of your dollars are going to Meta ad spend or figuring out how to take a product and create distribution, it's just a rough race.”
Serhant says that he’s been profitable from the beginning and that he’s bringing venture investors on board because of the help they can provide from a strategic partnership perspective, with Left Lane Capital known for its consumer-focused portfolio and Camber Creek focused on property technology. Both firms recognized Serhant’s “inherent value,” as Left Lane Capital’s Harley Miller describes it. “It's made investors like us wake up to the power of this distribution and how big of a value driver and unique competitive moat it can be,” Miller tells me.
Jeffrey Berman, general partner at Camber Creek, says that the most successful firms in his portfolio have “cracked the code” of the business-to-business-to-consumer model. He points to the rent payment platform Flex, which deals with multi-family-owner operators who can market to tenants en masse. “It's not apples to apples with the idea of having a socially recognizable personality, but it's similar in terms of the ability to [market] at a relatively low cost,” he says.
For now, Serhant is rolling S.MPLE out to brokers across his own company and plans to expand to other outfits. His software ambitions may not supersede his Netflix renown anytime soon, but that might only aid his efforts. “He’s not just a quote-unquote celebrity broker,” Berman tells me. “He’s actually a technology CEO, and he’s running a pretty big company at that.”
Leo Schwartz
Twitter: @leomschwartz
Email: leo.schwartz@fortune.com
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