Dwelly, an ‘AI rollup’ buying U.K. real estate agencies, gets $93 million to fuel expansion

Dwelly, which is based in London, said the funding comprises £32 million in equity led by General Catalyst, the Silicon Valley venture capital firm, with participation from Begin Capital and S16VC, alongside a £37 million debt facility from Trinity Capital, the Nasdaq-listed alternative asset manager.

The company, which has already acquired 10 real estate agencies, according to its cofounders, plans to use the money it has raised to accelerate its acquisition spree.

The U.K. real estate brokerage market consists of roughly 20,000 so-called “lettings firms,” (those that handle leased properties.) These firms collectively manage some 5.5 million rental properties generating more than £100 billion in annual rent and £10 billion in agency commissions, according to Dwelly’s calculations. Despite those enormous sums, the sector remains deeply fragmented: the top 100 firms control less than 30% of the market, and many agencies still run on phone calls, manual paperwork, and ad hoc processes.

“We have crossed 10,000 properties under management, placing Dwelly among the UK’s top 15 largest letting agencies in less than 2 years — an unseen speed of growth for letting agencies,” Ilya Drozdov, Dwelly’s cofounder and CEO, said.

In an interview, Drozdov told Fortune the company currently manages more than £200 million in gross rent. He said Dwelly aims to reach 50,000 properties under management by the end of this year, which would make it a top-five agency in the U.K. The company currently employs close to 300 people, roughly 40 of whom work at headquarters in engineering, product, and analytics roles. Drozdov said headcount could surpass 1,500 by year’s end as acquisitions continue.

Dwelly is what venture capitalists have taken to calling an “AI-enabled roll-up” — buying traditional businesses, then layering in technology to wring out efficiencies that the previous owners couldn’t achieve on their own. The strategy has become popular in the past three years among Silicon Valley firms and private equity groups, but it is not without detractors who say that simply using AI to take administrative costs out of traditional businesses won’t transform the core business model and won’t deliver tech-style valuations.

In Dwelly’s case, the cofounders argue that the real value of acquiring agencies isn’t just operational leverage but customer acquisition. The typical tenancy in the U.K. lasts about three years, making it difficult to organically win landlords away from their existing agents.

“Structurally, finding a landlord is pretty hard organically, just because the window of opportunity to catch a landlord untenanted is pretty hard,” co-founder and chief product officer Dan Lifshits said in the interview. “That’s exactly why for us, the roll-up is, in a way, tactically buying a customer base.”

Lifshits, a former general manager and global vice president at Gett, the ride-hailing company, said the cofounders considered and rejected the idea of just selling AI software to agencies, as opposed to buying the agencies and operating them.

Agencies are reluctant to change established workflows, he said, and the economics of selling software are far less attractive than owning the entire customer relationship. “If you sell the software, you get one and a half, 2% of the P&L of the agency. If you own an agency and deliver the full end-to-end service, you get 100% of the P&L,” Drozdov said.

Once Dwelly acquires an agency, it preserves the local brand and staff but integrates its own AI-powered operating system to automate key functions. In the lettings process, Dwelly’s AI handles tenant communications, background verification, and offer management. Where a traditional agency might generate one or two offers on a property, Dwelly says its system produces an average of 10 validated offers on each listed property within three days. Drozdov said the company has cut the time to find a tenant from the industry standard of roughly three weeks to under two.

On the property management side, the company says AI has reduced maintenance resolution times from the industry average of about 50 days to 20, although the startup is, according to the cofounders, aiming to get that down to 10. The system uses chatbots to triage tenant requests around the clock and actively tracks follow-ups with maintenance providers so that jobs don’t fall through the cracks.

Lifshits emphasized that the goal is not to replace agency workers but to make them more effective. He noted that in a typical branch of 10 to 15 people, only one person is usually out doing physical work like property viewings; the rest are at their desks handling emails, phone calls, and coordination — precisely the kind of workflow orchestration AI can automate.

“It’s not by coincidence that letting agents, estate agents, are among the top three most hated professionals in the U.K.,” Drozdov said. “People, with all the good intentions to deliver an outstanding service, are underwater with all the admin stuff. We help to reduce that workload and let them do what they really love to do.”

Zeynep Yavuz, a partner at General Catalyst, said in a press release that the firm views Dwelly as converting “thousands of analogue, agency-level processes into scalable software, improving tenant experience, landlord economics, and agency efficiency all at once.”

Drozdov, who previously served as a general manager at Uber and co-founded a tech-enabled rental agency in Russia that scaled to 10,000 apartments, said Dwelly is focused exclusively on the U.K. for now but has ambitions to expand to Western Europe — with France as a likely first market — and eventually the United States.

“Europe is an amazing place to build companies, especially in the AI era,” Drozdov said.