Pioneering the AI-rollup model in the property management space with Dan Lifshits, Co-Founder @ Dwelly

0:00Welcome to the Riding Unicorns podcast. Today we have Dan from Dwelly. Dan great to have you on thanks for joining. It'd be great if you could just introduce yourself and the business. Thank you for having me. Yeah, my name is Dan Lifshitz and we're building Dwelly, that is the UK-based lettings and property management AI-first platform, where we're growing by acquiring and partnering with existing traditional letting agencies to evaluate this level of service and experience. Dan, it's great to have you on. And we go back a long way now. I made the fatal error of not angel investing because I was buying a place at the time.

0:36and so maybe you made the right decision was trying to conserve cash but i wish i had now i mean you've um of course it's early days you would obviously say that as well you're very modest but you have um uh had some real success raising a lot of money from funds like general catalyst already so we'll hear more about that in a bit but um tell us a little bit about your career you've been at mckinsey you were then senior at get the taxi company and so tell us a bit about that journey before Dwelly and kind of how that sparked the interest in being a founder, but specifically with Dwelly. Sure. I think that every kid when growing up wants to be a realtor, right?

1:17So I think that this is the short version of the start. Yeah, I think a bit of a longer version is, yeah, kind of effectively spent a significant part of my childhood growing up in between Israel and Russia. Then he came here in the UK, finished mathematics and lunch club economics. and I think as discussed, being a son in a Jewish family and not being a lawyer and a doctor already implies that effectively family gave up on me. So I think that being either in property or investment banker, I think that one of the only ways to try to recoup some of this love back and so that the family doesn't give up on you completely.

1:52I spent a bunch of years in consulting. I was at McKinsey in my early days and was able to grow there very, very fast and be probably one of the youngest, if not the youngest, associates here in Europe and the world. And it was pretty much the times when the whole ride-hailing journey was effectively just starting up. And I think that's not me, guys, to tell you what FOMO feels like, right? When you feel like the whole world is moving in one direction and that you're a little bit missing out of that. But a few friends of mine that I knew really well for a long period of time invited me to join when it was a really pretty early company.

2:34I don't remember exactly, but I think it was just around our Series A back at GERD in something around 2015-ish when the whole ride-hailing world was just evolving, especially in Europe. And yeah, you might know the rest of the story. during the early days when it was like very, very small business. We scaled the business to more than a billion of GMV to more than a thousand people. I think that all these stories, especially in tech-enabled operational businesses, do not come without its own ups and downs, high ups, low downs. You know how it works. But I think that you get to learn the most on this sort of stories.

3:11And that's effectively what I think professionally, to some extent, formed me and gave me some experiences for sure. I've been doing different things. I was in charge of operations first, then moved back to Israel, was in charge of a significant chunk of our product engineering teams. And then I came back to the UK and was GM of our consumer business here. And I think that that experience coupled with, as Hector, you probably know and remember, all my co-founders being general managers at Uber themselves before as well. So that's where we met each other more than 10 years ago, furiously competing between each other on the right hand in front.

3:48I've been, as we keep joking, I've been on the bright side of things. Yeah, they've been on the dark side of things at Uber, or maybe vice versa, like who knows. And yeah, after that, been looking what are the other markets resemble very, very similar features to that of ride-hitting. Effectively, huge operational business, untouched with technologies to a significant extent, two-sided marketplace that is highly fragmented, both between demand side and supply side. And the co-founders already had experience of building, scaling, and then selling successfully. what scaled to become the largest tech-enabled lighting agency focused on long-term residential rentals in Eastern Europe.

4:24And we decided to build on top of that experience of our marketplace knowledge and of the previous experience of scaling lighting agencies to try to reinvent the business model and engineer something new, given some of the localities and some of the limitations of the organic growth in certain markets. Yeah, no, it's a great story. And I mean, maybe we can touch on the dip, you know ilia and your co-founders a little bit later but was that how obvious was it to you that you should dwell it and like what was was there anything holding you back you know it's never an easy there'll be a lot of listeners probably thinking about starting a business like what would you say to them when they're working out whether they should take the plunge this is a great question i think that this is not my first attempt of the business this is not the first business that Ilya and Dimitri are building as well.

5:15So I think it's all kind of second or third kind of business for us. And I think that this is applicable both to the value, but even before that, that I think there is something inside you at some point of time where you're thinking what you want to do in your life. And I think that at a certain point, you arrive to the stage where you understand that something within you wants to build something. and this is like a desire that you cannot hold. And there is no reason to do that, honestly. That just dominates in a way and you understand that there is no other way rather than trying and going to do that.

5:53And I think there can be different motivations. It can be what I probably believe is the best motivation is the motivation to really make an impact in the world and change something. And I think whenever you experience renting out pretty much across the world, in the UK included, you understand that potentially there is a better way because I think that unfortunately, but quite rarely, people refer highly to the experience that they had in their journey. I think that for some of the founders, it might be the experience coming from a personal pain. It might be the experience coming from a desire to leave the mark in the world and some legacy.

6:30But I think it's a combination of factors. For me personally, it was all of the above. Plus, I think that it's only the business that you're building yourself where you can leave some culture and some personal mark that you want to inherit as much as you want to be building things and not that you need to. Anyway, the culture is going to be the summary of the key leaders that you have in the business, and I think that's fine. But the question is how much of an impact and opportunity you have to navigate this culture. And I think that whenever you're feeling, and whenever you get to know yourself too well at some point and you understand what things you can compromise with, what things you cannot compromise with.

7:11You understand that it's only building your thing that can create the sort of unique feeling and vibe that you want to have. I think to some extent, it's also a mixture of, it's very hard to combine the work-life balance because I think whenever you're working somewhere, you have the work-life balance. Whenever you're building something, there is no work, there is no life. Your life is work, your work is life. It's all kind of connected together. And I think that's the only meaningful way to really try to blend this all together and to leave us like comprehensive and wholesome kind of human beings.

7:44So I think all factors together. But it's in a way never was a question of should I continue just a corporate career and build an amazing progression at McKinsey's of the world? Or if I want to go and build something myself, I think always been a question that it's always been a statement that I definitely would do that. only a question of when. And I think that all previous steps were rather fundamental blocks into getting some key experience to make sure to reutilize that. But it never was a question if I'm ever going to do something. And I think most of them are like that. I think that they're set in mind that they understand that they're going to build something regardless.

8:20It's just the question of when. And it's amazing how few entrepreneurs that we speak to have any regrets about their decision to found a business, which suggests that more people should do it. Probably if enough people are becoming entrepreneurs, some of them would probably regret it. And we're certainly not at that point, at least here in the UK. Yeah. Don't get me wrong. I mean, and you know it better than anyone else. It's a very tough journey. It's a ton of compromises that you're having. It's a ton of life choices that you're making every single time. So it's not that this is the only cheerful path in your life.

8:51I think that everyone knows deep down within themselves if they want to try it or not. And if they're never trying, they would regret it for life. So I think that for these people, the only recommendation would be to go and try it. I understand that there are some monetary limitations one might have, not enough runway to kind of do the things or some other things. But I think the only meaningful thing is worth trying. And especially whenever you have less commitments in life, go for it. That's my honor. Yeah. And Dan, Dwelly isn't just an AI company. You're an AI company with a roll-up model as well, which is really interesting.

9:23And I think 2025 was described as the dawn of AI roll-ups. But you founded Dwelly in 2023. So what was it that gave you the belief that the venture market would also catch on with this model that wasn't new, but has really come into vogue in the roll-up models, not new, but obviously AI roll-ups is. So how did you get the confidence that the VC market would really get it and buy into this model going forwards? Yeah, that's an amazing question and a journey, really. And Damien, you're saying 2025 is the year of AI roll-ups. let's see what 2026 is going to be i think that it's just starting to be honest but i mean it hasn't been a decade of roll-ups maybe the decade of roll-ups as with all kind of a bit of a hype thesis but that do have certain proofs in the pudding i think it's like five seven years away that is just starting and i think that that's what we're going to experience in the next until 2030 at least if not even longer than that because there's fundamental value being created and whenever it's created then kind of it's a big category that can be reshaped and redefined so So hence, I believe it's with us for long term, honestly speaking.

10:30But talking about 2023, a short answer, it was rough. A bit of a longer story. It was the only meaningful way how to reshape that specific industry, because exactly of having an experience of building a tech-enabled letting agents already once, we learned the hard way that acquisition of landlords, and this is effectively your two-sided marketplace, you have a tenant, you have a landlord, and you are kind of a service company acting on behalf of both to some extent. But it's not about finding the tenants. This is all this business is about. Finding tenant is comparatively easy peasy. You just pose the property on the likes of right Zoopla that you guys, both of you know really well and kind of other classifieds.

11:10And obviously kind of this distribution problem has been solved by lots of other smart people like Alex Chesterman and many more. But it's all the question about how to acquire the landlord. And growing landlord organically is hard because effectively it's structural reason of the market that the landlord switch between agents is very, very rare. And that's what we learned the hard way in the previous business, that effectively the only meaningful way to grow is not in organic growth. And then when we regrouped and started thinking other ways to overcome the limitation of organic growth, then that's where we came across such a beautiful world known as Roll Up that, honestly, I didn't know until end of 2023.

11:47Kind of no joke. And that's where we had an idea that why not we try to merge the best of the two worlds. with like building tech first business, but growing as effectively just customer acquisition costs. Because the way you can look at it is a tactical go-to-market where rather than acquiring customers one by one, you're just buying customers in a bulk by buying the existing incumbents and effectively preserving their customer base and highly recurring managed subscription books of customers that they have. As simple as that. And we thought it's brilliant. VCs didn't exactly think this way. You guys know it better than anyone else.

12:19I think both Red Bus and episode one passed on us and not just once, but on a bunch of occasions. And you're not alone, I think, that we got rejected by close to 100%. We would have loved to invest in it. It's the balance sheet stuff that was the issue for us. No, true, but I mean, not kind of keeping any hard kind of truth on that. I think that as earlier stage investor, you obviously need to be sure that later on, investors would kind of back it up as a story because obviously if you're the last investor investing at venture-style valuations where the next round would come at fundamentals of the business, then effectively it's not going to work for you, right?

12:56So effectively it's about kind of in a way believing to the story that the story would continue growing. And I think that whenever you don't see the proof of the later stage investors already doing this sort of strategy, you have no other way rather than either just like in a way saying we're the smartest and we see that this wave is going to come, so let us jump on the ship right now and hope that it's going to happen or just stay away. So, I mean, it's just how the world works and this is fine. I mean, I don't keep anything bad to that. but you guys also there's also something in that where you've almost turned what was potentially your biggest weakness from fundraising into probably your biggest strength by saying you know all of the vcs who weren't quite sure if the roll-up model would be the right thing and maybe some had lpas that don't allow them to invest in that type of model and things like that you've now gone well actually this is you know you that whole narrative is exactly why you are doing well is because it is your biggest strength it's like no this is the only way this is going to succeed because yeah anyone who's invested in any prop tech business that targets landlords pretty much everyone's failed because they are the hardest customer profile to get to they are private they're behind shell companies that they're literally the hardest people to target yeah so you've turned you've turned your biggest weakness into your biggest strength and i think that's a great lesson for any founder listening who's getting any sort of pushback is to try and think about well why am i doing it like this why why is this the model that's right i think you're right and i would share two learning observations here i think that number one the only thing that keep you afloat whenever you're hearing 200 rejections of vcs like 50 rejections of p's is just your personal conviction into the thesis because i think that we had a bit of unfair fair advantage of having seen in practice how this business model works already once on the real business that made us 100 confident that this is working it's just a question of execution but this is going to work and that degree of conviction we had was to the way that as you know kind of the first acquisition we've made was based up north in Hull where we relocated where we're building out the business for more than a year.

15:10So effectively, yeah, it was very conviction driven, but on our side. And I think whenever you know that it's going to work, you just, whatever. All the things that you hear, like, I don't believe it, no, kind of you guys didn't convince me. It's a helpful feedback for you to keep the firepower, to keep iterating, but that doesn't slow you and stop you from continue executing. And I think that you're just sure that there would be a moment of time where there would be enough data points to prove that this is really working. I think this is number one. But equally, number two, I probably would be a bit more conservative on the fact that it's us that turned it into the strength, et cetera, et cetera.

15:46I think that as much as obviously whenever something is not working out for you as easy, you obviously start investing much more resource into that. And that naturally becomes much bigger area of your focus, for sure. But I think that we experienced a crazy kind of tailwinds of things just becoming in a way more acceptive from the investor standpoint, just as a financial thesis overall, because I feel that there were a lot of changes on the VC side that were driving that change. And I think that coming down to a bit of a slowdown of an era of your typical B2B SaaS investments is one kind of factor that contributed to that appearance of AI that I think naturally pushes everyone to rethink some of the existing distribution models is number two.

16:31So hence, I think a lot of investors become more open to not just building yet another AI native kind of B2B SaaS, because you understand that as much values now can generate, potentially would not be adopted because of the lack of like effective acceptance to change within the businesses. And that's where you start with thinking in like volunteer FDE style, why don't we go full stack? And why don't we start owning the businesses in the first place? I think another factor that kind of contributed to that big time is that obviously, especially on the VC front and growth, that growth side, I think that everyone knows that there is crazy extent of capital consolidation within the few large kind of investors.

17:08I think that the statistics is that largest 20 funds raise more than 80 % of all VC capital in the world. And obviously, whenever you have a big capital pool, yes, you're targeting not a typical kind of fee style, in a way, just management fees game, but you're still targeting in the same kind of three, four X return on your fund, right? And that makes you potentially to go after a bit higher conviction, smaller amount, but bigger check investments, where roll-ups is also falling as the category very well, because you can deploy a lot of capital within one company. So I think that, fairly speaking, probably there are some things that will help to kind of create this wave, for sure, with proof in the pudding of execution.

17:49But I wouldn't shy away from the fact that I think it's just overall the kind of evolution investment that we're just changing, where you have Internet 1.0 mobiles. After that, you have mobile marketplaces. After that, you have enterprise B2B SaaS. And I think we're just approaching the completely new wave of investing of AI kind of native services, roll ups in the services, et cetera, et cetera, that out of our control. So I think that as much as we navigated it, we've equally just been lucky for the kind of things to change into our favor. And I think it's important all the time to just remember the fundamentals, just not to kind of start being lost track to reality.

18:25And Dan, tell us about moving to Hull. I mean, so you moved to Hull. I think it wasn't just you, but you were... Founders with families, yeah. Yeah, and you moved to Hull. And what was the purpose of that? And why was it a requirement? And was it valuable doing that? Yeah, I remember when we've been discussing that topic with the team in Hull. And actually, it's a completely outstanding team of an agency, the first one with whom we partnered. and I think that whenever we were making some of the investor conversations from the open office and sharing that we moved to HAL, et cetera, et cetera, I remember that at first the people were like, okay, what's the heroism here?

19:04I mean, it's amazing city and we've been living here for all of our life. Why are you putting it as such a kind of thing? And whenever you're speaking to the New York or kind of London-based investors that usually do not travel beyond M25 quite often, you're like moving to HAL. And they were like, oh, wow, kind of this is such a conviction bet. I mean, it was fine. I remember that. But coming back to the point that effectively the business is about, I think you can look at it from two distinct angles. I think you can call it a roll up with technology. And I think that this is the wrong way to position what actually are we doing.

19:36And I think that another way to look at it is that we're building the tech first, AI native letting agents of the new era. or it happened to be that our growth and effectively the way that we acquire customers tactically is just a go-to-market angle is acquiring existing businesses because this is the only way to grow fast. And I think that that changes the perspective of how you look at things because eventually when you say the word roll up, I think that there are too many hashtags sitting on it. It's like PE term and you preserve not just the kind of customer base, but also the business, the processes, the team, kind of et cetera, et cetera.

20:11Reality is majority of what we're buying. it's primarily the customers. Yes, it comes along with great kind of local teams and property managers and lots of other educated professionals that know how to run the property space. But we're also re-engineering the target operating model of the value delivery of the service quite significantly as well. With changing roles and responsibilities of the people, with changing how certain activities being done, with unifying these operational activities, because obviously you can expect that lots of very kind of moms and pops, traditional businesses, implies that there is a variety of different operational ways how to do the same activity.

20:46And that's why the only way to really build a product and build your target operating model that would allow you to achieve the goals of increasing the user experience and efficiency of the underlying businesses is only by kind of sitting in this office as yourself and on the fingertips feeling and understanding what product are you deploying, how is changing the processes, how to change the process of the product, how to change the product to fit in all the existing processes. Because differently from distributing your typical B2B SaaS, it's not that you're building a product that then you're going and selling to the other customers, but you have one goal, and one goal is serving your end customer, in our case, like landlord, tenant, contractor, and then you can attack it from both ends.

21:28You can approach it from the end of changing the operational processes, or you can change it from the way of changing the product and technology, and you need to understand both sides on your fingertips really well to understand what are you actually building and changing. And this is not achieved by sitting in the fancy view work and drinking smoothie, sitting on the phone call with property managers and telling them which buttons to click. I mean, this is about rolling up the sleeves and going to the boardwalks of the world and sitting side by side with these teams and co-creating the target rating model and technology to run these businesses.

21:58And with what you learned sitting alongside in this kind of forward deploy, you mentioned FD earlier, sort of manner, have you learned that, I'm sure these agents have slightly different ways of working, there are idiosyncrasies between them. And have you learned, have you had to build your product in a sort of configurable, modular way? Or have you sort of built it in an opinionated way where the agents that you acquire and start working with are forced to fit your product? That's an amazing question. That's exactly the letter. And I think that's exactly where the difference between your typical kind of buy and build.

22:37And what we're doing is coming up because our vision is effectively with the use of technology and AI is to streamline the entire lighting lifecycle from finding a tenant to collecting rent or property management to enhance the user experience. And you cannot do that while preserving the variety of different operational practices and having a very versatile product supporting these different ways of work. You can achieve it only by choosing one way of work and then effectively, in a way, pushing or suggesting everyone to adopt this way of work because you on data has proven that this way of work is better than a variety of other ways of work that exist out there.

23:13And important to note is that this is not that you defined it and that's it and it's set to stone, but it's effectively a continuous feedback loop where you test it versus reality. You buy another agency, you look at some operational process they're doing there, and actually figure out that some things they invented to be doing there are smarter or more efficient or something. And then you go back and revisit your target operating model and your product supporting that for all the agencies that you already bought and fully integrated up until now. So L is effectively the selection of the best practices of operational processes across the UK with not just selecting the best one of the variety, but also quite often selecting none of the existing and reviewing all of them completely and rewiring your new one instead to replace the old ones.

23:57This is what effectively we build. Yeah, fascinating. So, I mean, you're able to use data to work out and determine the optimal process across every part of the letting's journey. and really fascinating stuff. How are you in practice? And that's where you allow bringing most of this needed transparency and guaranteed level of service through unification, and this is critical, and through very targeted adoption and deployment of AI, integrating it into very specific pre-designed workflows where after understanding very clear process and states that this process needs to follow, this is when you then can apply AI because effectively it's going to be primarily just your facilitator to move the process from state A to state B.

24:40Whenever you predefined, know which states you want to process to follow through. That's a great segue, because I was going to ask you, how are you using AI to achieve your sort of North Star metrics? Like what are the most exciting applications of AI and what you're doing? It's across the board. I think that this is an example. The beauty of the lighting agency is that it's an example of the industry where by far most of the service delivery is communication centric workflow of orchestration, where it's primarily quite labor intensive and quite repetitive admin operations that are structured around either project management type activities or communication center things, write emails, read emails, make phone calls, et cetera, et cetera, et cetera.

25:21And this is where I think it's not that it's specific activity that you can enhance, but it's rather the type of action, such as like phone call or conversation or conversational application of AI. So a few examples where we see the biggest change in adoption is, for example, on finding a tenant process to help tenant find the property and help landlords find the tenant is where, for example, we can increase the number of validated offers that we receive per property from one tool, as usually agents are doing that, by increasing the top of the funnel, by allowing much more tenants to leave inquiries on the property and have the conversational experience with AI and chatbots and everything and learn more about the property to the way that they can leave an application for the property and increase the number of applications that will receive per property from one tool, as traditional agencies would be doing, to like eight to 10.

26:12That allows not just to rent it faster, but also potentially have a more broad selection of the potential applicants for the landlord that benefits them because they can select a better person and a better couple. And effectively, that just makes the process more transparent for all the parties, right? Or another example might be, for example, on the property management kind of jobs resolution where you have like a bathroom leak or something. We're cutting down the job resolution time by somewhat around 30 % because kind of, yeah, I'll be surprised, but I can understand the tenants and the landlords and the British plumbers pretty well and happy obviously to share more about how it works.

26:51It's pretty brilliant. but that allows to reduce the average job resolution time from around 50 days that is average across the UK to around 30 where we're now. And I think that we'll get this to less than 10 days as product continues getting better and better. Because most of what property managers are doing is just conversational project management between the tenant, landlord, and contractor to triangulate communication. So this is a bread and butter for what EA can achieve. And there are many more examples, but I would say that this is one of the most prominent ones where the impact on the user experience is the most felt to the end customer.