Future City: Silicon Valley is pumping money into Brazilian house-flippers, rocky times for Goldman-backed online mortgage broker Trussle & more
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.
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Here’s the Jan. 9 edition.
iBuyer builds up war chest
The iBuyer formally known as Perch, now called Orchard, just closed a $36 million equity round led by real estate geared VC firm Navitas Capital. The startup buys homes with a guaranteed offer for 90 days and provides a platform to find a new place for homeowners looking to sell their old home and buy a new one. Orchard’s CEO and co-founder Court Cunningham told TRD‘s David Jeans that the firm is much more than simply an iBuyer – its core product is a vertically integrated, streamlined model to buy and sell homes, he said. Orchard offers an online portal that uses artificial intelligence to suggest properties to consumers based on the images that they view. It also provides an online title service. The company has raised a total of $69 million in VC funding and also received a $200 million debt package from an undisclosed lender last year. The latest cash infusion will go toward doubling head count.
An Airbnb crackdown in LA
Throwing a house party at an Airbnb in the Hills just got a little harder. The company is cracking down on 28 listings in Los Angeles that the city’s police department flagged as hotspots for parties based on citations and cease and desist orders. Several of the listings were removed from the platform and others suspended depending on the severity of the issues but all of the hosts had upcoming reservations canceled. This is all happening after the company banned “party houses” in the wake of a shooting that killed five at an Airbnb’ed home on Halloween. They’ve been scrambling to prove the platform’s safe since then, especially with a potential IPO (rumored to be a direct listing) just around the corner.
Silicon Valley heavyweights get in on Brazilian home flipping
Brazilian iBuyer Loft just nabbed $175 million in a Series C funding round led by Microsoft co-founder Paul Allen’s investment arm Vulcan Capital and VC firm Andreessen Horowitz (a16z). The startup works a lot like its fellow home flippers in North America, purchasing direct from sellers, and then selling on the open market. It’s yet another sign that Latin American startups have been getting a ton of VC attention: this is Vulcan Capital’s first investment in the region and a16z’s first in Brazil. Loft didn’t disclose their valuation after the eye catching round, but reporting from The Wall Street Journal indicates that their unicorn horn may be sparkling very soon.
Over $1 Billion
That’s how much funding flowed into the construction tech industry last year, according to data from Crunchbase. It’s actually a big decrease from 2018 when funding topped out at around $2.865 billion, which was made up for the most part by a big rounds from con-tech firm Katerra and smartglass maker View.
Looking for a replacement
The Goldman Sachs-backed online mortgage broker Trussle lost its co-founder and CEO. Ishaan Malhi resigned late last week from the head of the five-year-old startup as well as the London-based company’s board. In the interim, Trussle will be led by chairman Simon Williams while the team looks for a new CEO to take over. Trussle has raised over 19 million British pounds since it was founded in 2015.
Hotel rooms on the company card
Hospitality startup The Guild just scored $25 million in a Series B funding round to expand the Airbnb/boutique hotel mashup model. The startup works with developers of apartments and offices to turn whole floors into hotel suites that can be booked by the night through their platform. A big component of their model is corporate stays. The Guild wants to use the new funds to expand to six new markets over the next two years, and plans to roll out more tech uses such as key-dispensing kiosks and virtual check-ins.
Looking for the right vibe
With news of The Guild’s funding round this week, it’s important to note that they aren’t the only the only startup with an Airbnb flavor. Five-year-old company Sonder offers apartment style rooms in cities around the world, all bookable on a digital platform.
The idea is to combine the convenience and reliability of a hotel experience with the local feel of an Airbnb. But unlike a home sharing situation, Sonder’s rooms are carefully designed and furnished. “We really want to be involved from A to Z,” the company’s VP of finance and real estate Martin Picard told me. Picard said they have local teams that work with a design team to come up with rooms that capture the each city’s “vibe.” A bright yellow couch may be unthinkable in New York but in Miami that works.
On the tech side, Picard said the company is digitizing many steps in the hotel experience like check in, requesting late check out, and concierge service. Instead of calling downstairs, if a guest has a request they can send it direct through Sonder’s dispatching system and get a response in some cases “faster than a hotel,” says Picard.
It’s a crowded field out there in the hospitality startup world with Airbnb-backed Lyric and Domio touting similar models.
Two cities, one co-living company
Two co-living startups are coming together in the same neighborhood. Hong Kong-based Dash Living just expanded to Singapore with the acquisition of Easyliving. The combined company claims to manage over 900 units across the two city-states, and around 100,000 square feet in Hong Kong. They’re saying this is the first step to becoming a major player in the notoriously pricey region.