Scale vs Scalability - A look at innovators Opendoor, Wework and Nested - Proptech Weekly #25

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Friends, Feudal Landlords and Commoners, 

Wow! It has been a rapid-fire two weeks filled with Proptech news. I'm going to focus on two stories.

First, the most exciting PropTech company in the world has just announced some incredible news.

And no, I'm not talking about WeWork's mammoth fundraising. While impressive, it doesn't really change the world. You know, like how OpenDoor are re-imagining the process of buying and selling a home.

But first a little recap. Opendoor started life as a project called HomeRun and launched to the public in Phoenix Arizona in mid-2014.

Their proposition was a genuine techgasm: Opendoor instantly values your home via an online form and - upon visiting to make sure all is as you said it is - would honour that initial instant valuation if you accept. If you think that's great, the kicker is they're able to buy your home within 72 hours. Booyah!

They quickly grew to buying a home a day in Phoenix alone.

If revolutionising selling wasn't enough, they fixed up their homes to the 'Opendoor standard', complete with keyless entry. For the first time, buyers could book a property viewing from their smartphone and visit the home any time night or day. Yes, you heard right: 24 hour viewings. Like f*&^*&g magic!

Obviously introducing the world to the best way to sell your home AND the best home buying experience ever wasn't enough of a quantum leap forward for the Opendoor team.

This week they've announced a part exchange programme called TradeIn. While not too disimilar to their original innovation, the marketing ploy is genuinely expansive. Being part of a 'chain' is terrifying for many. For many more, it results in them losing out on the home they had their heart set on. 

This is one reason why I rate Opendoor: genuinely painful problems people experience are being eradicated by this ingenious team of technologists and marketeers. These guys are the vaccine for the painful residential real estate market. 

The second reason is a relative thing: while WeWork is raising silly money because it has potential scale, Opendoor is genuinely scalable. At it's core, it's just a valuation algorithm that can scale infinitely. And of course I say 'just' with asly grin on my face.

The second announcement is related. Matt Robinson, co-founder of Fintech darling GoCardless, is launching an online estate agent. 

It's called Nested and will guarantee to buy your home if they don't sell it within a certain time period (currently 90 days).

When I first heard about this, I felt deflated. Here was an experienced entrepreneur launching what felt like a 'poor man's Opendoor'.

But then it hit me: this is actually an online agent doing it right.

This is the very first online agent likely to be sustainable. Their business model viability comes from charging 2% + vat, rather than the usual online fare of "if you tell me you'll sell my property for less, you're telling me you'll sell my property for less." 

And as the perfect foil in the crowded world of estate agency, they have a gimmick people can genuinely feel is a differentiator.

There's a third point to consider: Matt Robinson has form. He founded the uninspiring GrouPAY before pivoting into the 'woah that's big' GoCardless.

I'd bet he takes this currently drole concept and refines it into something equally 'woah'. 

What's pertinent about both these stories is they are genuine Proptech: working toward making real estate agents obsolete.

Fundraisings

Summarising them here for easy reading: 

WeWork raised $430m: Link
Housing.com raises Rs 100 crore ($20m): Link
RealtyShares brings in $20m: Link
LendInvest brought in an additional £17m: Link
PropertyPartner brings in £16m: Link
NoBroker (India) lands $10m: Link
YourWelcome raises £400k: Link

People moving

Stephen Jury asked to leave Emoov; finds himself in high demand: Link
Former CoStar MD Paul Marples joins Datscha: Link


Please feel free to relay news, tips and comments @RayhanRESI 

Rayhan's PropTech Weekly XXV


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Meet WeWork's founders: Mr and Mrs Adam Neumann (Fast Company)

These two are the real 'je ne sais quoi' behind WeWork. The secret sauce. The new Colonel (KFC), if you will. This is what Antony Slumbers goes gaga over: Link


The Future of ZipRealty (Real Estate Magazine)

When Realogy bought competitor brokerage ZipRealty, many thought it was a defensive play to keep the technology out of others' (read: Zillow's) hands. This in-depth piece gives an insight into what technology is to come from the largest real estate company in the world: Link
 

GoCardless's Matt Robinson announces his Proptech start-up Nested (ThePitch.fm / Property Industry Eye)

See above. I'd also add that ThePitch.fm podcast is awesome. Love the format. It's a great listen: Podcast Link PIE Link 
 

Eddie Holmes's Proptech Podcast episode 2

This one wasn't so entertaining. First one must've been a fluke ;) Link


Scientists say future building materials will be grown (The Memo)

Mind. Blown. Might as well sell your cement and steel shares now: Link


Mitula acquires Nuora (Property Portal Watch)

Vertical property search classifieds group continues to make good use of its IPO funds, after previously acquiring Lokku/Nestoria: Link


Opendoor's TradeIn is a part exchange for your home

My initial reaction on reading this story was to be completely taken aback in awe. Read and you'll understand why: Link

 

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