Ben Johnson was living in a Houston apartment when he noticed that more than a dozen dog walkers were coming to his compound every day. He believed that choosing a dog-walking service would give apartment supervisors fewer people to check on and perhaps create savings for residents by increasing efficiency.
But Johnson couldn’t get the neighbors to agree on a dog-walking service. So in 2016, he started Spruce, a company that provides apartment dwellers with on-demand pet sitting, housekeeping, laundry, dry cleaning and more from licensed contractors.
Today, Spruce operates a platform that allows people to book services through a mobile app. Services are provided by certified, insured and verified professionals, according to the company.
The company, which moved its headquarters from Houston to Austin in 2019, has big plans for expansion as it onboards a new CEO and recently raised $26 million from investors.
Spruce currently serves more than 2,300 apartment communities – approximately 600,000 units – in multiple markets nationwide. The company recently expanded to Minneapolis and St. Paul, Minnesota, as well as Jacksonville, Florida. The company also recently began offering services to short-term rental owners listed on Migo, a home-sharing service created by RealPage in partnership with Airbnb. .
Taking the helm as CEO, CTO Steven Pho has served as a director on Spruce’s board for two years. Pho has held leadership positions at Austin-based companies including on-demand delivery startup Favor Delivery and digital discounts company RetailMeNot, which went public during his tenure as vice president of business development.
Johnson will become the company’s president.
“Over the past six years, Spruce has helped transform both the multifamily and janitorial industries and has experienced phenomenal growth in the process,” Johnson said. “I am extremely excited to work with Steven through our next phase of growth as we pick up our pace with this new funding.”
When COVID hit, Spruce shifted gears. In April 2020, the company added a range of sanitation and disinfection services to help combat the spread of COVID-19. Services included disinfecting common areas such as rental offices and common areas such as hallways, elevators, mail rooms and courtyards.
Today, with a new investment of $26 million, the company is moving forward and plans to double its workforce to 80 people, 60% of whom are based in Austin. The company abandoned its East Austin headquarters amid the pandemic, but is considering renting new space to have a hangout for employees, Pho said.
“I’m excited to step in and help provide strategic leadership and direction and help us evolve,” Pho said. “Developing great technology – that’s where the investments really go.”
In addition to expanding its engineering team, the company will invest in marketing as it expands its short-term rental housekeeping services.
Pho acknowledges that Spruce faces stiff competition in the apartment and short-term rental markets, but said the company aims to differentiate itself by partnering with local service providers and creating efficiencies in operations.
“A lot of people who compete with us are very regional in nature. They are family operations that focus on narrow parts of their market,” he said. “Our goal is to make our home service providers much more efficient by optimizing their time. Think about downtime and moving from building to building. We are working to create more routing efficiency and planning, which helps them make more money.”
As the company grows, Pho said he looks forward to becoming a player in Austin’s growing technology and startup sectors.
“I think we’re capturing a lot of momentum. This is a big milestone for the company and for the team, and we’re all very excited to be part of the growing tech ecosystem in Austin,” a- he declared. “The city has fast-growing tech companies and we love being a part of them.”
Spruce’s investment comes as the flow of venture capital to startups slows. According to analytics firm CB Insights, VC-backed startups have raised far fewer funding rounds in the past three months than they did late last year and early this year.
Deal activity worldwide fell 23% between the first and second quarters of this year, CB Insights said. Total startup funding for the second quarter to date fell 27% from the first quarter.
“People are really pulling back,” David Steakley of the Texas HALO fund told the Statesman.
Steakley, who is an investor in other Austin companies including motorcycle rental platform Riders Share, said, “It’s going to be a tough winter for many businesses. If you need to raise cash now and If you haven’t lined it up, you’re in danger. People are pulling out the term sheets. People are getting pretty nervous about an impending recession.