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Proper, an automated accounting and bookkeeping service for property managers, announced Wednesday it raised $9 million in Series A funding in a round led by QED.

Existing investors MetaProp, Expa and Bling Capital also participated in the round, which gives the San Francisco-based proptech company a total amount raised of $13.8 million. The company brought in $4.8 million of seed funding last August.

CEO Mark Rojas, whose background is in product development, founded Proper in 2017 after spending a year-and-a-half learning the ropes in a property manager’s office. He was looking at the maintenance side of the business when he realized how much the accounting part of the business “was almost a dumpster fire.”

“I knew the space was rife with problems to solve and how much accounting was a bigger part of the operations that needed to be executed each month and tied everything else together,” Rojas told TC. “Property managers don’t often come from an accounting background — usually they have a real estate license, so that lack of expertise can put them in a position where they can’t scale their portfolio, or if they try to, things break.”

Proper dashboard

Proper’s tech-enabled service is designed to execute those specific real estate accounting-related processes and apply automation to those that are repetitive. The company said property managers with 1,000 doors can see 63% higher profit margins and spend 45% less time per year on accounting.

Rojas says accounting automation in real estate has been neglected with few startups stepping up to solve it like Proper is. He considers proptech still in its infancy with much of the innovation coming from home buying, selling and maintenance rather than accounting. It also doesn’t have a “champion company” yet leading the way.

Rather than sit and wait for a company like that to emerge, Proper pivoted to address accounting in early 2020 and saw “growth explode” over the past year. Rojas said he saw the opportunity to not only scale aggressively on the revenue side, but also build a lasting business that was sustainable.

“Real estate is the most valuable asset class, and what I am looking at is how big this industry could be,” he added. “That idea of there being no competitors enables us to be aggressive, be the go-to brand and scale with that high demand.”

Now armed with the Series A funding, the company intends to focus on operations, product development, build a new customer-facing platform and add to its headcount across business functions. Rojas said it went from zero to $2.3 million in annual recurring revenue in 2020 over 12 months. Proper also grew from 15 to 120 employees in 2021 and expects to end the year with about 200.

Proper paused its sales and marketing in order to scale, and Rojas is ready to hit the “play” button again. He is also happy to work with QED, which is in alignment with the company’s vision.

As part of the investment, QED Partner Matt Risley is joining Proper’s board of directors. Risley’s background is in fintech, and he was previously chief financial officer of e-commerce payment platform Klarna.

Risley told TC he initially met Rojas during Proper’s seed round and was tracking the company’s growth as its initial ideas came to fruition. He considers Proper among the success stories coming out of the real estate industry that also include RealPage, Yardi and AvidXchange.

He spent time with small business owners using Proper and said its product has a good market fit.

“What we see consistently is they are passionate about the core business of delivering value to clients and have a true expertise,” Risley said. “We also see the relief that Proper gives property owners and managers from doing bookkeeping. Anything that enables small businesses to spend more time on what they like about their businesses, they will seize upon it.”