Grotto AI announced it has raised a $10 million seed round, targeting what it identifies as a significant revenue hindrance in the housing sector: an estimated $500 billion lost annually due to vacancy. The funding round was led by ICONIQ, with contributions from Asymmetric Capital Partners and support from noted advisors and angel investors such as David Dear, Caren Maio, and Avi Dorfman.
Based in New York, Grotto AI is positioning its platform as a nuanced alternative to the growing trend of frontline automation in leasing. The company argues that the most impactful moments in leasing remain inherently human, emphasizing that artificial intelligence should enhance leasing teams’ capabilities rather than replace them.
Grotto AI’s platform is designed to analyze leasing interactions and highlight the most crucial revenue drivers for specific properties. It aims to provide real-time guidance during calls and tours, assisting agents in building rapport, addressing objections, and improving conversion rates. The platform’s effectiveness is already being recognized by property owners and operators, including Weidner Apartment Homes, Hillpointe, Trammell Crow, and Sentral.
The company was founded by Nick Deveau and Ben Epstein, who previously collaborated at EvolutionIQ. Grotto AI noted that the founders played a pivotal role in developing core technologies at EvolutionIQ, which recently achieved a notable exit valued at $730 million. Deveau brings a background in AI from Stanford and significant experience in AI-native SaaS products for large enterprises, while Epstein’s expertise includes building platforms for machine learning and deep learning teams, most recently leading EvolutionIQ’s internal LLM platform initiatives.
Grotto AI’s early models were developed in partnership with statisticians and AI researchers from Carnegie Mellon and Stanford, trained on hundreds of thousands of leasing interactions. The analysis underscores the importance of interpersonal signals as key predictors of conversion outcomes. Notably, interactions featuring laughter initiated by agents were associated with a 48% higher likelihood of converting a lead into a signed lease, while moments of curiosity correlated with a 35% increase in conversion rates. In contrast, traditional best practices such as requesting a tour or application only yielded a 14% lift in conversion.
With the recent funding, Grotto AI aims to expand its product offerings and scale deployments among multifamily operators. The company continues to promote real-time coaching and post-call feedback as vital tools to mitigate vacancy loss and enhance property-level revenue.
Tengbo Li, General Partner at ICONIQ, commented on the investment, stating, “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.”
In a similar vein, Deveau remarked, “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.”
As Grotto AI continues to refine its approach, the integration of AI into human-driven processes stands to redefine leasing strategies across the multifamily housing market, potentially reshaping how property management addresses vacancy challenges and revenue generation in the future.
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