Kwelia Investment Deck 020812

8/2/2019 Kwelia Investment Deck 020812

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Kwelia:

Real Estate AnalysisRe-invented

What we do

Kwelia is an analytics platform for

residential rental real estate. Our data-

driven and quantitative approach

leads to sharper decision-making for

rental apartment transactions.



Two Problems

1. Rudimentary Rental Analysis

Rental market analysis severely lags behind

modern advances in technology.

The Status Quo

Pricing and other assumptions are typically

derived by either:

1. Guessing

2. Relying on biased sources

3. Repeating historical patterns

2. Messy Rental Markets

Compared to for-sale markets, rental

markets are unstructured and opaque.

The Pain is our Opportunity.

Billions of dollars are lefton the table each year bylandlords and propertymanagers.

RENTALMARKETS

FOR-SALEMARKETS

Transparency

S t r u c t u r e



Our Solution

BIGDATA

REALESTATE

QUANT ANALYSIS

Our platform is positioned at the nexus

between big data, quantitative analysis,

and real estate to deliver groundbreaking

intelligence to the multifamily industry.

We’re bringing institutional-grade analysis

downstream.



Unraveling theKwelia PlatformWe are creating the most comprehensive

database of past and present rental listingdata ever compiled.

We apply our proprietary algorithms and

modeling techniques to derive meaning from

these noisy datasets.

We supplement the quant analysis with

qualitative real estate knowledge.

BIGDATA

QUANT ANALYSIS

REALESTATE

Partnerships

Currently negotiating with apartments.com

Discussions commenced with olr.com,

nakedapartments.com, and move.com

Technology

Our proprietary web crawling platform

continuously monitors, archives, and cleans

online rental listings.

Multivariate Analysis

We use hedonic regressions and otherforms of multivariate analysis to make sense

of these datasets.

We are developing algorithms that

recommend more optimal rental pricing,

renewal rates, unit mixes, and lease terms

to clients.

Technology

Our analysis is more than a black box as we

supplement quant output with data on things

like the macroeconomy and other market

factors.



Why RevenueManagement?Once a tool only used by institutional entities,

revenue management is quickly becoming astandard software application among

landlords and property managers of all sizes.

“All of the public REITs except one use a

revenue management software, and all of

them use some type of revenue management

strategy…[t]he thing that was most

interesting to me…was the number of smallerowner-operators…that have invested the

time and energy into adopting a revenue

management strategy.”

—Steve Lefkovits, president and chief

executive of Joshua Tree Internet Media2

1. According to Robert C. Cross, President ofRevenue Analytics, Inc.

2. Hudgins, Matt, “When Apartment Rent Climbs,

Landlords Can Say ‘The Computer Did It’.” The NewYork Times 29 Nov 2011

3 Arguments for Revenue Management Software

1. Revenue growth

There is typically a 3-7% increase in revenue across

industries when a revenue management system is in place.1

2. Multiplier Effect on Value

Small increases across a portfolio can be immensely

valuable, particularly at the end of an investment term when

a sale or refi is being considered.

3. Isolation of other Problems

Implementation of a revenue management system can help

point to flaws in other parts of landlord businesses ranging

from marketing to maintenance.



Competition inRevenueManagement

Yieldstar LRO Kwelia RM

Infrastructure On-Site Servers On-Site Servers Cloud

Scope of Analysis Property specific Property specific Market-wide and

property-specific

Pricing Structure $25k minimum set-up fee;

$2 — $6 per unit per month

$25k minimum set-up fee;

$2 — $6 per unit per month

Subscription-based, tiered

for product robustness

Yieldstar Optimizer by Real Page and

Lease Rent Optimizer by Rainmaker are the

two leaders in revenue management for

the multifamily industry.

Kwelia’s product offeringis truly the next generationof revenue management

software. Its simplicity,affordability, andconvenience make it anattractive product that is

poised to challenge thecurrent field.



The Market forRevenueManagement

Software

Of the 40,703,218units for rent in

the US, only 15%use optimizationsoftware.

Huge Market

Based on rental transaction volume alone, the

multifamily industry is a $350 Billion industry.

Real Estate

Of the 40,703,218 units for rent in the US,

only 15% use software for pricing and other

assumptions.

Other Industries

This can be contrasted with airlines, rental

cars, and hotels where there is near 100%

adoption of optimization software.

40,703,000 is according to the 2010 US Census

15% is according to multifamilyrevenue.com



Our PilotProgram

Pilot Program Participant Profiles

Landlord Footprint Portfolio Size Status

The Galman Group PA, DE ~6,000 units Data received

Korman Communities Nationwide ~10,000 units Awaiting test property data

Allan Domb Real Estate PA ~1,000 units Data received

Campus Apartments Nationwide ~35,000 beds Follow-up meeting scheduled

Brownstone Apartments PA ~200 units Data received

A diverse group of five evangelical landlords

have agreed to participate in our pilotprogram. Their eagerness to participate

underscores the market’s frustration with

the current revenue management offering

and the demand for a new solution.

Pilot Milestones

Test ProductDetermine Sales Cycle

Determine Pricing

Refine Product



Exit Potentials

M&A Activity

Real estate technology as a sector has seen

heavy M&A deal volume of late. Notabledeals include:

PropertyShark by Yardi in 2011

Mynewplace by Real Page in 2011

Vaultware by MRI in 2011

Level One by Real Page in 2011

Rentbureau by Experian in 2010

The Property Management Suite

Internet Listing Services

Resident Screening

Online Applications

Lead Generation/CRMs

Reporting and Accounting

Analysis and Information

Online Payment Processing

Electronic Documents

Revenue Management

Revenue Management and heavy analytics are often themissing links to the property management suite. Only Real

Page and Yardi have the complete suite of products.

Other players want to expand their suite to incorporate all

links of the chain. We have commenced discussions with

On-Site.com and are doing a 3rd party integration of our

product with AMSI’s Reporting and Accounting software at

the request of a pilot client.



What’s Next?

Our Product Pipeline

Revenue Management for Self-Storages

Revenue Management Commercial OfficesDecision analysis for Consumers

Decision analysis for Developers

Additional Lines of Business

Direct Raw Data Sales

Reports and Analytics

Kwelia seeks to develop anarray of products beyondrevenue management to

disrupt the archaic methodsof analysis in the real estaterental market.



Our Team

John Njoku

Founder/Chief Strategist

Duke University

Bachelor of Arts in Economics andPolitical Science

Stanford Law School

Juris Doctorate

Columbia University

Master of Science in Real Estate

Development

Greg Phillips

Co-Founder/Chief Engineer

Cornell University

Bachelor of Arts in PhilosophyConcentration in Information Science

3 Years Experience

Developing demand forecasting

solutions for consumer packaged

goods

Chris Connell

Co-Founder/Chief Economist

Utah State University

Bachelor of Science in Economics

University Of East Anglia

Master of Science in Economics and

Finance (Masters’ Dissertation; Airline

Pricing: An Alternative Approach)

Founder: Philadelphia Predictive

Analytics Meetup

THEREAL ESTATE

GUY

T H EBIG DATA

G U Y

T H EQ U A N T

G U Y



The Ask

We have an open round of funding with a

target of $300,000.

This funding will seed the company as itrefines its revenue management product

through its pilot program and explores the

development of products in its pipeline.

With intentions to stay lean, it is intended that

this round of funding will last 12 months.

Milestones to be Met with Funding

1. Recruit engineering generalist to join the team.

2. Test and refine revenue management product through

pilot program.

3. Test and determine pricing structure for revenue

management product.

4. Begin exploration and development of ancillaryproducts in pipeline.

5. Commence marketing and branding strategies through

presence at tradeshows and conferences.

$300,000

Kwelia Investment Deck 020812

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