An online real-estate services startup founded by University of Arizona grads has received critical early-stage funding in an investment round led by a new Phoenix-based venture capital fund.
InHouse Marketing, which offers an online networking and marketing platform for real-estate agents and mortgage lenders, recently concluded a $150,000 private-equity investment round led by The Arizona Founders Fund, with participation from Scottsdale-based Roundsquare Ventures and members of Tucson’s Desert Angels.
Founded in 2015, InHouse grew from a graduate project by three students in the highly ranked McGuire Center for Entrepreneurship at the UA’s Eller College of Management.
InHouse CEO Luis Palomares and former UA roommate Josh Gill had already been making marketing websites for real-estate agents, writing software to pull data from real-estate multiple listing services, making websites for individual properties that can be easily shared on social media and generating marketing materials like flyers and postcards.
The pair was joined in founding the company by McGuire students Cooper Kowalski, InHouse head of business development, and Mat Friedman, content manager for the company. Gill, a UA engineering grad, is chief technology officer.
The InHouse student team won a business-pitch contest as “most likely to launch” as part of McGuire’s 2015 New Venture Competition, winning six months’ free office space at Connect Coworking in downtown Tucson.
Though InHouse got some initial traction, it was difficult to sell the online service to real-estate agents nationally, Palomares said.
But then some lenders approached the company, asking for a service that allowed them to track and market to real-estate agents.
“That was kind of the ‘aha’ moment for us, so we modified our system a little, and instead of a marketing system, it’s more of a data-analytics platform for mortgage lenders,” Palomares said.
Real-estate agents can still take advantage of InHouse’s web-based services for free, while lenders pay $129 a month for a software service that allows them to market to real-estate agents in certain markets, pulling in the latest information on agent performance and properties.
“It gives them a little edge over the next lender, and they can get a little pulse on the market,” Palomares said.
Now, the company has data on more than 2 million agents nationwide and about 90 percent of all active U.S. listings, and the company recently landed a deal to supply a custom analytics package to a major Arizona mortgage lender, he said.
And InHouse is still based at Connect Coworking, with seven employees, though at one time the founders had planned to move to California, said Palomares who grew up in Agua Prieta, Sonora, and attended high school in Douglas before moving to Tucson about seven years ago.
“We just stayed here because of the free office space downtown, and once we were in here and saw the kind of growth Tucson is having, so much going on, we decided to stay,” he said.
InHouse already is working with The Arizona Founders Fund on a second round of funding of about $850,000 to $1 million, to help accelerate the company’s nationwide rollout, Palomares said.
The InHouse investment is the first in a Tucson-based business for The Arizona Founders Fund, which has also invested in four companies in the Phoenix area since its founding in late 2015, said founder and managing director Romi Dhillon.
The fund was created to increase the amount of early-stage investment capital available to startups in Arizona, where a dearth of early-stage funding makes growing young companies difficult, Dhillon said.
Startup companies often face gaps in early-stage funding sometimes called the “valley of death” for entrepreneurs.
“We wanted to raise a seed fund to help really bridge companies through that valley of death,” said Dhillon, who moved to the Phoenix area from Utah to work with a software company in which he invested.
The fund’s strategy is to invest $100,000 to $400,000 in companies as part of larger rounds, initially focusing on Arizona-based software-as-a-service, mobile app and cybersecurity companies.
“We really want to lead the rounds for our startup companies,” Dhillon said, adding that the fund aims to put together funding rounds totaling from $750,000 to $1.5 million.
While that seems like a small amount for venture-capital funds, which typically invest in the millions or tens of millions of dollars, The Arizona Founders Fund calls itself a “seed stage venture capital fund.”
“Our take is, we hope that InHouse can raise much, much more, being able to use this capital as a springboard,” Dhillon said, noting that the Founders Fund is the first fund dedicated to Arizona tech startups.
Dhillon has some valuable experience in investing in software services companies. A few years ago, he helped InfusionSoft, a Chandler-based company that provides online sales and marketing tools for small businesses, raise more than $100 million in venture capital in deals with Goldman Sachs and Bain Capital.
The Arizona Founders Fund is backed by a network of tech-firm founders that includes InfusionSoft founder Clate Mask and other Phoenix-area software executives.
Dhillon said the fund is committed to raising money for startups across Arizona, noting that Founders Fund has become an affiliate member of the Desert Angels.
Curtis Gunn, chairman of the Desert Angels, said the emergence of The Arizona Founders Fund is good news for the state’s entrepreneurs.
“Access to early-stage capital continues to be a big issue in Arizona and (The Arizona Founder’s Fund) is another step in helping to fix that problem,” he said, adding that the software-industry veterans backing the fund provide invaluable experience.
“It’s so vital to have successful entrepreneurs giving back to the startup community,” Gunn said.
Tucson Tech runs most Thursdays or Sundays in the Star. Contact senior reporter David Wichner at email@example.com or 573-4181. On Twitter: @dwichner Follow the Star’s business coverage at
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