Sun. Aug 14th, 2022

Opendoor opened the door to the idea of ​​applying technology to the concept of ‘house flipping’ to both increase the possibility and make it significantly more efficient. And while the stock price is currently being hammered into a broader downturn for tech stocks in general, it’s a strong enough concept that it has inspired a number of others to follow in its footsteps. In the latest development, an Opendoor-style startup called Casavo, from Italy, announces that it has raised €400 million (currently about $410 million).

It plans to use the money to expand its business across Europe through a platform that today offers nearly 4,000 homes in Italy, Spain and Portugal and has sold some 3,200 to date (since its inception at the end of 2018). real estate worth a total of €1 billion, according to CEO and founder Giorgio Tinacci.

Financing comes in the form of a €100 million Series D and a €300 million debt to purchase and refurbish properties. Casavo noted that this Series D is the largest ‘proptech’ equity investment to date in Europe, with the debt round pushing the startup’s borrowing capacity to half a billion euros.

Tinacci said in an interview with BestFitnessBands that the company did not disclose a valuation, except to note that it is more than twice the size it was in the last round. For context, that was $194 million as of February 2021, per PitchBook data, making Casavo’s valuation likely more than $400 million now.

Exor — a traditional holding company controlled by the Agnelli family that has a wide range of investments ranging from publishing houses (e.g. The Economist) to car brands (e.g. Ferrari and Stellantis) and sports clubs (football giant Juventus) — is leading the stock round with the participation of a number of others who will give it some strategic resources as well as money. Casavo’s new investors include Neva SGR (Intesa Sanpaolo Group), Endeavor Catalyst, Hambro Perks, Fuse Ventures Partners and angel investor Sébastien de Lafond (founder of MeilleursAgents). In addition to them, previous donors Greenoaks, Project A Ventures, 360 Capital, P101 SGR, Picus Capital and Bonsai Partners also participated.

Intesa Sanpaolo (IMI Corporate & Investment Banking Division), Goldman Sachs and DE Shaw & Co provided the debt.

Casavo’s rise largely stems from three main areas: the pandemic, the gaps in Europe’s real estate market as it exists today, and Casavo’s specific approach to addressing them.

As with the pandemic in the US, the lockdown brought about a new focus on family life and where people lived, leading to people looking for places (or renovating their existing places) to create more space and versatility given the increased time they spent there. “There was a shortage of inventory, but very strong demand,” Tinacci said. Platforms like Casavo’s found a lot of traction to make buying and selling easier in the pandemic climate, he added.

The state of the market in particular lent itself to this. A large proportion of private homes are owned by the families who already live there and usually do not work with real estate agents. These factors effectively slow down the buying and selling process: this puts people in “chains” where they would normally have to sell their place to move to another, allowing instant buyer platforms like Casavo to speed this up – for example by buying a property immediately. to free up capital for the seller, and refurbishing that property to sell it at a profit that Casavo in turn realizes for itself – a more attractive and widely used option.

That was very important for the startup. Pre-Covid, Tinacci said it typically saw 500,000 residential transactions a year in Italy. Last year that rose to over 700,000 – with an emphasis on metropolitan properties, and standard apartments rather than houses (which is much more the norm in metropolitan areas, especially in Europe).

“It is certain that companies like Opendoor or Loft in Brazil are a source of inspiration for us,” admitted Tinacci, adding that some casually referred to Casavo as a “European Opendoor”. But this is only the first part of what Casavo is doing, he added.

“The so-called ‘instant buyer’ approach has been our core and first step, but we are different from this one,” he said, noting that the reason he believes Casavo has greater potential is because its goal is to to go on. Direct purchasing, he continued, helped the company aggregate supply “which is very important in a very supply-driven market like this.” Now it also includes a number of properties on its platforms that it does not own directly.

The newer service launched a year ago now accounts for over 25% of transaction volume. “We expect this ratio to be 50% within a year,” he added. In other words, it started out as Opendoor, but eventually wants to be Zillow too.

“Casavo becomes the clear European PropTech leader and we are excited to continue the journey with Giorgio. Despite turbulent market conditions, the team has performed extremely well so far and we are optimistic about the future,” said Noam Ohana, MD of Exor Seeds, in a statement.

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