PayHOA, a software provider for self-managed homeowner associations (HOAs) based in Kentucky, recently raised a $27.5 million Series A round.
PayHOA, a Kentucky-based software provider for self-managed homeowner associations (HOAs), is one example of how real-world challenges can lead to opportunities.
In a setting where almost $30 million Series A rounds are no longer usual, it just raised a $27.5 million Series A round.
Mike Bollinger, the CEO and founder of PayHOA, has been making good use of his degree in finance. After selling two other businesses to Togetherwork in 2018, the entrepreneur launched PayHOA, LegFi.com, a venture that specialized in financial management for fraternities and sororities, and File990.org, which served nonprofit organizations’ tax compliance needs.
Bollinger claims that his motivation to start PayHOA came from his experience working with volunteer-based groups.
“Self-managed homeowner associations suffered, while larger companies catered to professional property managers,” he said to the press. Some even approached us carrying shoe boxes of paper receipts, compelled to improvise solutions using disjointed tools or generic software not tailored to their unique requirements.
According to Bolinger, PayHOA’s Software as a Service (SaaS) serves as the “central hub” for association board members, managing finances, maintenance requests, and community outreach.
Interestingly, they claim to be profitable (with positive EBITDA), which helps to explain how it was able to get such a sizable Series A round in the still-tough fundraising landscape, particularly for non-AI firms.
The 15-person firm saw a more than 70% increase in sales year over year. It charges a monthly subscription fee based on the number of units in the community, and it has over 652,000 users. For HOAs with 25 units or fewer, monthly dues begin at $49 per unit. Of the 2.5 million volunteer board members that make up community associations, 30 to 40 percent are self-managed HOAs.
PayHOA reached a significant inflection point, which led to the decision to raise outside funding for the first time, according to Bollinger.
He informed the reporters, “We’d found product market fit and were growing at a rapid rate.” “The extra funding and advice from investors will propel the company into new heights.”
PayHOA will use the majority of the new funding for employment and product development. PayHOA intends to increase the size of its engineering, sales, and support teams by 40%. Bollinger revealed that today’s unveiling of the Payables module uses optical character recognition (OCR) technology to automatically scan and extract data from invoices. Since 2018, PayHOA has handled invoices totaling over $1.6 billion.
Although Bollinger has observed more property management firms signing up for the platform, PayHOA currently has no plans to expand outside community management. This increases the company’s entire addressable market.
The firm that led the investment, Elephant Ventures, said in a written statement that “many HOAs manage their communities themselves, and for too long, their needs haven’t been fully addressed.”” PayHOA is aware of this need and offers a feature-rich platform made especially for independently run homeowner associations. They now have access to powerful tools that are typically only available to large populations.