Future City newsletter: Compass falls short of 20/20 goal, a proptech house hunt in Nigeria & more

Compass CEO Robert Reffkin (Credit: iStock)
Compass CEO Robert Reffkin (Credit: iStock)

Proptech is a $20 billion industry that’s already reshaping and upending traditional real estate as we know it. And this is just the beginning. Each Thursday, The Real Deal’s Future City newsletter breaks down the biggest news in proptech across the globe, from 3-D printer homebuilders in Long Island, to emerging tech brokerages in India, to crowdfunding property startups in San Francisco. Of course, we also cover the intrigue around firms backed by SoftBank. There are lots of them.

Our newsletter features exclusive interviews, insight and analysis that’s a must-read for brokers, developers and VCs alike. You can sign up here.

Here’s the Jan. 2 edition.

Looking for land in Mexico

A Chilean listings platform that specializes in plots of land, PortalTerreno announced plans to expand their model to Mexico. The plan to push north comes after the startup participated in an accelerator in Mexico City run by early stage venture fund and one of Airbnb’s early investors, 500 Startups. Just two years old, the platform has over 8,000 listings, running the gamut from residential to agricultural.

Look! Another WeWork parachute

It sure looks like Adam Neumann won’t be the only one with an outrageous payout. WeWork’s co-CEOs Artie Minson and Sebastian Gunningham will reportedly cash in on $8.3 million each should they leave their posts, per The Financial Times. It certainly doesn’t touch Neumann’s potential $1.7 billion golden parachute but this business of WeWork gifting big payouts to executives is turning heads in light of the company’s major job cuts. In November, the co-working firm announced that 2,400 employees would get the pink slip, and none of them got anything close to $8.3 million.

Airbnb wonders to ID or not to ID

A report in the Wall Street Journal found that Airbnb rejected a proposal from its safety team that would require all hosts to submit a government-issued ID. While some employees argued that collecting an ID would keep the platform safer, the company reportedly studied the issue and found that the added requirement would discourage some hosts from using the platform. Safety has definitely been on Airbnb’s mind the past few months. A shooting killed five at an Airbnb’ed home on Halloween and the company responded by announcing new safety measures including plans to verify all 7 million of its listings, which sounds like hard work.

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1.7 Billion

That’s how much Indian lodging startups raised in 2019, according to research firm Tracxn. It was a good year for these startups, thanks in large part to SoftBank-backed Oyo, which took in $1.5 billion, partly due to genius ideas like Marilyn Monroe pictures in hotel rooms boosting revenue. Speaking of Oyo, make sure to read the New York Times expose. It raises real questions about the health of the business. The Times reports that thousands of rooms on its platform are from unlicensed hotels and guesthouses, and that Oyo imposed extra fees on hotels and then refused to pay the hotels what they were owed. Some hotel operators have sought to file criminal complaints against the company, which aims to be the world’s biggest hotel chain by 2023.

Double the IPO
South Korean hotel booking platform Yanolja plans to go for the IPO for both its Singapore and Seoul operations in the next two years. CEO Lee Su-jin told Maeil Business Newspaper that he plans on listing the Singaporean subsidiary as soon as this year or by 2021. Along with the booking platform, the unicorn startup invested in the Rocket Internet fueled budget hotel network Zen Rooms, putting it in competition with companies like Oyo.

I’m Robert Reffkin, and this is (Compass) 20/20
Real estate brokerage Compass hasn’t yet reached its goal to take a 20% market share of the U.S.’s 20 biggest cities by the end of 2020 (someone there really likes the number 20.) But, on Tuesday, CEO Robert Reffkin told agents there was “progress” toward that goal. He claimed that the company reached the market share target for cities like San Francisco and Washington, D.C. and made 10% market share in “many more markets.” Compass ended 2019 with 15,000 agents who sold $88 billion worth of real estate, up from $33 billion a year prior, according to Reffkin’s letter. One reason for the massive jump is Compass’ recent acquisition spree; it has picked up large independent firms in key markets. In 2019, it added 87 offices for a total of 325 across 135 cities.

Listings in Lagos

In 2017, two major listings platforms in Nigeria merged to form PropertyPro, which at the time was the largest platform in the country with around 80,000 listings. The platform wants streamline house hunting in a country where rising urbanization and a small real estate market have created the perfect storm for a housing deficit.

Users seem to be taking notice. Co-founder Fikayo Ogundipe told Reuters that traffic to their site has been rising along with increased cell phone use, 90% of their traffic comes from phones. “Our focus is on the mobile market,” he said.

Europe gets a new proptech fund

VC fund Volta Ventures announced plans to launch a second fund, called Volta Ventures II. The fund has an initial closing of around $39 million, with plans to invest in budding startups in the Benelux region of Europe: Belgium, the Netherlands and Luxembourg. The fund previously invested in a Brussels-based startup that helps landlords create panoramas for listings platforms.

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