Grotto AI has raised $10 million in seed funding to address one of the housing sector’s most measurable problems: vacancy related revenue loss. The round was led by ICONIQ, marking one of the firm’s earliest stage investments. Asymmetric Capital Partners also participated, alongside advisors and angel investors including David Dear of BILT and former Equity Residential executive, Caren Maio, Co founder of Get100 and Funnel Leasing, and Avi Dorfman, Co founder of Compass.

This investment positions Grotto AI among a small group of early companies backed by ICONIQ at the seed stage. While valuation details were not disclosed, the firm’s involvement signals confidence in the company’s focus on improving leasing performance and revenue outcomes in multifamily housing.

Real estate’s vacancy problem meets human centered AI

The company is targeting a significant inefficiency across the housing market. According to Grotto AI, vacancy contributes to an estimated $500 billion in lost property value. Many property operators rely on leasing teams to convert prospective renters, yet performance often varies widely based on human interaction quality.

Rather than replacing leasing agents, Grotto AI focuses on strengthening their effectiveness. Its platform analyzes leasing conversations and delivers real time guidance during calls and property tours. This helps agents build rapport, respond to objections, and increase lease conversion rates. The system is already in use with major operators including Weidner Apartment Homes, which manages more than 70,000 units.

“We had the privilege of working with Nick and Ben at EvolutionIQ and saw firsthand their ability to build and execute world-class B2B vertical AI products. What drew us to Grotto AI is that same combination of technical depth and commercial focus. We believe that they’re solving one of the most quantifiable problems in multifamily by driving real, measurable revenue growth. Grotto AI delivers results you can see on a P&L, not just a dashboard.”

Tengbo Li, General Partner at ICONIQ.

Funding supports expansion of AI models and platform reach

The new capital will allow Grotto AI to further develop its models and expand adoption among multifamily housing operators. The company’s system is built on extensive analysis of leasing interactions, allowing it to identify behavioral patterns that improve conversion rates.

Early research has already revealed measurable differences tied to interpersonal engagement. Agents who initiated moments of laughter were 48 percent more likely to convert leads into signed leases. Those who showed genuine curiosity increased conversions by 35 percent. Traditional tactics such as requesting tours or applications showed more limited impact, with a 14 percent increase.

“The industry has it backwards, typically, leads are escalated to humans based on complexity — if they ever reach a human at all. In reality, our data shows that we should actually be escalating to humans when intent and warmth can change the outcome. If 2025 was the year of replacing humans, 2026 is about unlocking what only they can do.”

Nick Deveau, Co-founder of Grotto AI

The company plans to use the funding to scale its platform, deepen its AI models, and expand partnerships with large property owners and operators across the United States.

Founded by experienced AI engineers focused on revenue driven outcomes

Grotto AI was founded by Nick Deveau and Ben Epstein, both experienced AI engineers with nearly two decades of combined experience building enterprise machine learning products. The two previously worked together at EvolutionIQ, where they helped develop core technology that contributed to the company’s $730 million acquisition in 2024.

Deveau trained in artificial intelligence at Stanford and has spent years leading AI product teams serving Fortune 500 companies. Epstein has focused on building infrastructure and platforms that help teams deploy machine learning and deep learning applications, including EvolutionIQ’s proprietary large language model platform.

The company’s early models were developed with input from statisticians and researchers from Carnegie Mellon and Stanford. Their work analyzed hundreds of thousands of leasing interactions, identifying behavioral signals that strongly influence whether a prospect becomes a tenant.

Today, Grotto AI provides real time coaching and post call insights designed to help leasing teams improve performance. Its platform is already trusted by major owners and operators seeking to reduce vacancy and increase revenue.

Origianl Creator: Paulo Palma
Original Link: https://justainews.com/companies/funding-news/grotto-ai-secures-10m-to-improve-leasing-with-ai/
Originally Posted: Thu, 19 Feb 2026 17:20:36 +0000