Dwelly, a UK AI-first lettings platform, grows by acquiring traditional letting agencies because landlords rarely switch agents, making acquisition the fast route to growth.
Dan Lifshits says Red Bus and Episode One passed on Dwelly several times, and that early investors need to believe later-stage investors will back the story.
Dan Lifshits says a roll-up needs at least two, ideally three, founders with operations, technology and M&A skills, and that deals become cookie-cutter by around the tenth acquisition.
Dwelly buys letting agencies and rebuilds them with AI
Dwelly is building AI-native letting agents by buying traditional agencies. Landlords rarely switch agents, so acquisition is the fast way to win customers, and technology then standardises how each agency runs. The model needed founders with conviction and a venture market that had turned toward roll-ups.
Takeaways
Organic growth in lettings is hard, so buy. Landlords rarely switch agents, while tenants are easy to find through portals such as Zoopla. Buying existing agencies brings landlord customers directly. Dan calls customers the main value of each deal and acquisition the only meaningful route to growth.
Investors resisted roll-ups until sentiment shifted. Red Bus and Episode One passed several times, with the balance sheet the issue, per Hector Mason. B2B SaaS slowed and AI rose. The largest 20 funds raise over 80% of VC capital, and roll-ups let them place big checks.
Relocating to Hull signaled founder conviction. The first acquisition was in Hull, and the team moved there for more than a year. Dan says London and New York investors read that as conviction. Founders hear around 200 VC rejections and 50 from private equity, so conviction carries them.
AI-native operations improve agency results. Most property management is conversational project management between tenant, landlord and contractor. Dan says AI tenant inquiries lift applications per property from about one to eight or ten. Maintenance tools cut resolution from about 50 days to about 30, with a target under ten.
The founders have run this play before. Dan worked at McKinsey, then at Gett, which grew past a billion in GMV and a thousand people. His co-founders were Uber general managers, and the group earlier built and sold a tech-enabled letting agency in Eastern Europe.
Many current AI companies will not last. Dan doubts AI-first products like call note-takers, which Zoom and Google Meet could absorb, and says switching models is as easy as opening a tab. He expects many to vanish within ten years and AI roll-ups to run until 2030 at least.
How Dwelly runs acquisitions
A roll-up needs at least two founders, ideally three. Dan covers product, fundraising and larger deals, Ilya covers integrations, operations, finance and legal, and Dimitri owns technology.
Targets are growing agencies with good operational practices, a fragmented customer base and a strong management team. Dan treats growth as a better quality signal than current NPS.
Deals have ranged from about 1m to 100m in revenue.
The process turns cookie-cutter by around the tenth deal, though each deal stays unique.
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On this episode 3
Show 1
Dwelly picks one way of working from data and tests it against each new agency in a continuous feedback loop.