See the 14-page deck a startup used to pitch its investors on selling the in-house AI tool it built to help hedge funds buy real estate

• Keyway was managing real-estate deals for investors when it realized it could sell its in-house software.
• The software uses AI to manage all aspects of a transaction, from sourcing to underwriting.
• Keyway walked Insider through the pitch it used to sell this pivot to its investors.

Keyway has always been a software company, just not in this form.

The company’s original business plan was to assist hedge funds and other large investors in putting money into small but profitable real-estate deals by utilizing technology to make them more efficient.

“It takes the same amount of time and effort to close a $5 million deal as it does a $100 million deal, so the biggest players are just looking at large deals,” Matias Recchia, cofounder and CEO of Keyway, told Insider.

The company created software to help hedge funds and large family offices manage $5 million deals on a large scale. They initially concentrated on sale-leaseback transactions, in which an investor purchases retail real estate from an owner-occupier and then leases the same space back to the company from which it was purchased.

Conversations with clients and prospective clients, on the other hand, always seemed to return to the software. Clients soon expressed a desire to use the software themselves rather than outsource the investment process to Keyway. Some clients saw it as a way to cut labor costs on deals that were not handled by Keyway. (Purchasing and managing real estate is an expensive business that necessitates the involvement of lawyers, analysts, and associates, all of whom can “eat into profits,” according to Recchia.)

So Keyway gave them what they wanted by launching Keypilot as a separate business line last month.

Since its inception in 2020, Keyway has raised $40 million in equity and $70 million in debt financing. Its most recent funding round, a $25 million Series A led by Camber Creek, an early proptech investor, was announced in June of last year. It is not actively fundraising, and the pitch deck was designed to inform existing shareholders about the strategic shift.

Its software assists in the sourcing and underwriting of properties by utilizing 300 data sources and 1200 data points for each asset. Users can find properties by using a filtering service or a chatbox similar to ChatGPT. The search results are then fed into Keyway’s underwriting service, which performs the calculations automatically. It can also help with the complex closing process, such as keeping track of all required documents. Following the completion of a transaction, the software will continuously evaluate the asset’s performance.

This type of end-to-end software is uncommon in an industry where most transactions are still conducted via email, with counterparts exchanging PDFs and spreadsheets to share information.

For the time being, the software only supports multifamily and sale-leaseback investments, but Recchia hopes that it will eventually cover all asset classes except office buildings. Along with the software, the company intends to continue offering its high-touch investment service, allowing clients to choose how automated they want the experience to be.

Recchia took Insider through the pitch deck the company used to introduce its software to investors and potential customers. It has been edited to remove some of the company’s financial information as well as the names of competitors whose software is similar to Keypilot’s.