California DoorDash workers protested outside of the home of DoorDash CEO Tony Xu on Thursday, prompted by a recent California Superior Court Judge ruling calling 2020’s Proposition 22 unconstitutional. Prop 22, which was passed last November in California, would allow app-based companies like DoorDash, Uber and Lyft to continue classifying workers as independent contractors rather than employees.
A group of about 50 DoorDash workers who are affiliated with advocacy groups We Drive Progress and Gig Workers Rising traveled caravan style to the front of Xu’s house in the Pacific Heights neighborhood of San Francisco. They demanded that DoorDash provide transparency for tips and 120% of minimum wage or around $17 per hour, stop unfair deactivations and provide free personal protective equipment, as well as adequate pay for car and equipment sanitizing.
“Dasher concerns and feedback are always important to us, and we will continue to hear their voices and engage our community directly,” a DoorDash spokesperson told TechCrunch. “However, we know that today’s participants do not speak for the 91% of California Dashers who want to remain independent contractors or the millions of California voters who overwhelmingly supported Proposition 22. The reality is, the passage of Prop 22 has addressed in law many of the concerns raised today through its historic benefits and protections: workers earn 120% of their local minimum wage per active hour in addition to 100% of their tips, receive free PPE and enjoy access to healthcare funds.”
DoorDash drivers say getting paid for the time they’re “active,” meaning actively driving to either pick up food and drop it off, rather than when they’re online and waiting for gigs to come through, leads to inadequate pay. They also say much of their living wage comes from tips, which should be an added bonus, but ends up helping make ends meet based on DoorDash’s pay structure. Prop 22 is also meant to guarantee a reimbursement of 30 cents per engaged mile, which drivers say “would be great if it were true.” DoorDash did not respond to follow ups regarding its pay structure or claims from dashers that they have not been given free PPE.
Rondu Gantt, a gig worker who’s been working for DoorDash for two and a half years and also drives for Uber and Lyft to get by, says his base pay from DoorDash is often as low as $3 per hour, and that around 40% to 60% of his money comes from tips. Although this model sounds similar to the restaurant industry in the United States, which can be quite lucrative for servers and bartenders, for a delivery driver, it’s an unsustainable way to make a living because tipping culture isn’t nearly as strong.
“DoorDash pays so low because they want to make it affordable for the customer, but I would say for the driver it becomes unaffordable,” Gantt told TechCrunch, citing the costs of owning, maintaining, parking and fueling a vehicle as potentially crippling. “Last week, I drove for 30 hours and I made $405. That’s $13.50 per hour, which is below minimum wage.”
Gantt said drivers also have had to deal with pressure to drive in unsafe conditions, and we can look to the images of delivery drivers in New York City during Hurricane Ida as an example of some conditions drivers feel compelled to accept. Over the past two years, DoorDash drivers have also been deemed essential workers, interacting with and providing services for many people during a pandemic at the risk of their health.
Gig Workers Rising says DoorDash workers “have received little to no safety support” with some workers reporting “being reimbursed as little as 80 cents per day for cleaning/sanitizing equipment and PPE that they use to keep themselves and customers safe.”
“Right now gig work isn’t flexible,” a spokesperson for Gig Workers Rising told TechCrunch. “Workers are at the mercy of when there’s demand. If they were employees the work would change as they’d work in the knowledge that they’ve healthcare and can take a sick day off.”
Because Prop 22 was ruled unconstitutional, the spokesperson said by rights it shouldn’t be in operation.
“The gig corporations violate that law everyday by choosing not to comply with it,” he said.
For Gantt’s part, he doesn’t necessarily want to be an employee, he just wants to make sure that he’s being paid what he deserves.
“Which is not minimum wage,” he said. “Minimum wage would be unacceptable as well. The cost of doing this, the danger, makes minimum wage unacceptable pay. And realistically, they’re only sometimes paying you minimum wage before taxes. After taxes you’re definitely making less.”
TechCrunch was given access to DoorDash workers’ dashboards that break down their pay. For the week of July 12 to July 19, one dasher was paid a total of $574.21 for 53 deliveries, $274 of which came from customer tip. His “active time” was 14 hours and 21 minutes, and his “dash time,” or when he was logged onto the app waiting for gigs to come through and doing deliveries, was about 30 hours.
The dasher’s “guaranteed earnings” from DoorDash for the week was $300.21. (DoorDash did not respond to clarification on how guaranteed weekly earnings are calculated or what they’re based on, but a post on the company’s site says that guaranteed earnings are incentives for dashers in specific areas.) His base pay ended up at about $257.62, but DoorDash added an additional $42.59 to adjust to guaranteed earnings. If we divide the amount DoorDash paid by the number of hours of “active time,” the worker was paid about $21 per hour. If we divide it by the “dash time,” it looks more like $10 per hour.
Again, this is before tax. Independent contractors are usually advised to put aside around 30% of their paycheck because they have to pay self-employment tax, which is 15.3% of taxable income, federal income tax, which varies depending on tax bracket, and potentially state income tax. After taxes, this dasher’s total pay for 30 hours of work, including his $274 worth of tip, would be around $402, which comes out to $13.40 per hour.
Tips were of concern at the protest on Thursday as drivers called for transparency. Gantt says dashers can see a cumulative amount of tip earnings per week, as well as how much tip they’re receiving from each order, but they don’t trust the amount they’re receiving is actually the amount customers are tipping them.
Gantt and other drivers aren’t just being paranoid. Last November, DoorDash agreed to pay $2.5 million to settle a lawsuit alleging the company stole drivers’ tips and allowed customers to think their tip money was actually going to the drivers. The suit, filed by Washington, D.C. attorney general Karl Racine, alleged DoorDash reduced drivers’ pay for each job by the amount of any tip.
One of the rallying cries of the protest was for Xu to “share the wealth.” In 2020, the CEO was reportedly the highest paid CEO in the Bay Area, making a total salary of $413.67 million. During the second quarter, DoorDash saw a $113 million profit adjusted for EBITDA, but was overall unprofitable with a net loss of $102 million.
“We all work for money and how that money gets distributed when they go through their earnings is telling you who matters and who doesn’t matter,” said Gantt. “It’s a clear sign of who’s important, who has value. If they don’t pay you, they don’t value you.”
HomeLight, which operates a real estate technology platform, announced today that it has secured $100 million in a Series D round of funding and $263 million in debt financing.
Return backer Zeev Ventures led the equity round, which also included participation from Group 11, Stereo Capital, Menlo Ventures and Lydia Jett of the SoftBank Vision Fund. The financings bring the San Francisco-based company’s total raised since its 2012 inception to $530 million. The equity financing brings HomeLight’s valuation to $1.6 billion, which is about triple of what it was when it raised its $109 million in debt and equity in a Series C that was announced in November of 2019.
Zeev Ventures led that funding round, as well as its Series A in 2015.
The latest capital comes ahead of projected “3x” year-over-year growth, according to HomeLight founder and CEO Drew Uher, who projects that the company’s annual revenue will triple to over $300 million in 2021. Doing basic math, we can deduce that the company saw around $100 million in revenue in 2020.
Over the years, like many other real estate tech platforms, HomeLight has evolved its model. HomeLight’s initial product focused on using artificial intelligence to match consumers and real estate investors to agents. Since then, the company has expanded to also providing title and escrow services to agents and home sellers and matching sellers with iBuyers. In July 2019, HomeLight acquired Eave as an entry into the (increasingly crowded) mortgage lending space.
“Our goal is to remove as much friction as possible from the process of buying or selling a home,” Uher said.
In January 2020, HomeLight launched its flagship financial products, HomeLight Trade-In and HomeLight Cash Offer. Since then, it has grown those products by over 700%, Uher said, in part fueled by the pandemic.
HomeLight’s Trade-In product gives its clients greater control over the timeline of their move and ability to transact, and Cash Offer gives people a way to make all cash offers on homes, “even if they need a mortgage,” he said.
“The pandemic only highlighted many of the pain points in the real estate transaction process that we’ve been focused on solving since our founding,” Uher told TechCrunch. “Between the real estate industry’s historic information asymmetry, outdated processes and unreasonable costs — not to mention today’s record-low inventory and all-time high bidding wars — buying or selling a home can be an incredibly difficult process, even without the challenges put in place by a global pandemic.”
Image Credits: HomeLight
Then in August 2020, the company acquired Disclosures.io and launched HomeLight Listing Management, with the goal of making it easier for agents to share property information, monitor buyer interest and manage offers in one place.
In June of 2021, HomeLight appointed Lyft chairman and former Trulia CFO Sean Aggarwal to its board.
Uher founded HomeLight after he and his wife felt the pain of trying to buy a home in the competitive Bay Area market.
“The process of buying a home in San Francisco was so frustrating it made me want to bang my head against the wall,” Uher told me at the time of HomeLight’s Series C. “I realized there were so many things wrong with the real estate industry. I went through a few real estate agents before finding the right match. So when I did find one, it made me feel empowered to compete and win against the other buyers.”
He started HomeLight with a single product, its agent matching platform, which uses “proprietary machine-learning algorithms” to analyze millions of real estate transactions and agent profiles. It claims to connect a client to a real estate agent on average “every 90 seconds.”
Over the years, Uher said that hundreds of thousands of agents have applied to be a part of the HomeLight agent network and that it has worked with over 1 million homebuyers and sellers in the U.S. Today, the company works closely with the top 28,000 of those agents across the country. HomeLight maintains that it is not trying to replace real estate agents, but instead work more collaboratively with them.
Uher said the company plans to use its new capital in part toward expanding to new markets its Trade-In and Cash Offer operations. HomeLight Trade-In and Cash Offer are currently available in California, Texas and, more recently, in Colorado.
“We plan to expand as quickly as we can across the entire country,” Uher said. “We also plan to hire aggressively in 2021 and beyond.”
HomeLight presently has over 500 employees, up from about 350 at the end of last year. The company has offices in Scottsdale, Arizona, San Francisco, New York, Seattle and Tampa, and plans to open new sites throughout the U.S. in the coming months.
Oren Zeev, founding partner at Zeev Ventures, said he believes that HomeLIght is better positioned than any other proptech company “to reinvent the transaction experience” for agents and their clients.
“With the onset of iBuyers and other technology introduced in the past decade, many proptech companies are building products to cut agents out of the transaction process entirely,” Zeev wrote via email. “This is where HomeLight uniquely differs — and excels — from its competitors…They’re in the perfect position to revolutionize the industry.”
Massachusetts Attorney General Maura Healey gave a coalition of app-based service providers like Uber and Lyft the go-ahead to start collecting signatures needed to put a proposed ballot measure before voters that would define drivers as independent contractors rather than employees.
Backers of the initiative, which is essentially a MA version of Proposition 22, would need to gather tens of thousands of signatures for the measure to make it to the November 2022 ballot. Despite the fact that last year Healey filed a lawsuit that challenged Uber and Lyft’s classifications of drivers as contractors who are therefore not entitled to benefits like sick leave, overtime or minimum wage, on Wednesday, the AG certified the current measure met constitutional requirements.
The news comes nearly two weeks after a superior court judged ruled California’s Prop 22, which was passed in 2020, unconstitutional. The union-backed Coalition to Protect Workers’ Rights urged Healey to reject the measure under the same grounds, and told Reuters that it is considering suing to challenge the measure.
The Massachusetts Coalition for Independent Work, the coalition of members including Uber, Lyft, DoorDash and Instacart, filed the petition for this ballot initiative last month, a move that Uber CEO Dara Khosrowshahi said he thinks is “the right move.” The proposed initiative would also allow drivers to earn a minimum of $18 per hour in 2023 before tips and provide those who work for at least 15 hours per week with healthcare stipends. Drivers would also be guaranteed at least 26 cents per mile to cover vehicle upkeep and gas.
The coalition has until December 1 to collect and file 80,239 signatures from voters. If they miss that deadline, they can gather an additional 13,374 signatures by July 6, 2022 to get the initiative on the ballot.
Flat.mx, which wants to build a real estate “super app” for Latin America, has closed on a $20 million Series A round of funding.
Anthemis and 500 Startups co-led the investment, which included participation from ALLVP and Expa. Previously, Flat.mx had raised a total $10 million in equity and $25 million in debt. Other backers include Opendoor CEO and CEO and co-founder Eric Wu, Flyhomes’ co-founder and CEO Tushar Garg and Divvy Homes’ co-founder Brian Ma.
Founded in July 2019, Mexico City-based Flat.mx started out with a model similar to that of Opendoor, buying properties, renovating them and then reselling them. That September, the proptech startup had raised one of Mexico’s largest pre-seed rounds to take the Opendoor real estate marketplace model across the Rio Grande.
“The real estate market in Mexico is broken,” said co-founder Bernardo Cordero. “One of the biggest problems is that it takes sellers anywhere from 6 months to 2 years to sell. So we launched the most radical solution we could find to this problem: an instant offer. This product allows homeowners to sell in days instead of months, a fast and convenient experience they can’t find anywhere else.”
Building an instant buyer (ibuyer) in Mexico — and Latin America in general — is a complex endeavor. Unlike in the U.S., Mexico doesn’t have a Multiple Listing Service (MLS). As such, pricing data is not readily available. On top of that, agents are not required to be certified so the whole process of buying and selling a home can be informal.
And since mortgage penetration in Mexico is also low, it can be difficult for buyers to have access to reasonable financing options.
“To build an iBuyer, we had to solve the transaction end-to-end,” said co-founder Victor Noguera. “We had to build the MLS, a third-party marketplace, a contractor marketplace, financial products, broker technology, and a home maintenance provider, along with other services. In other words, we have been building the real estate Superapp for Latam.”
Flat.mx says its certified remodeled properties have gone through a 200+ point inspection and “a full legal review.”
Flat.mx is growing sales by 70% quarter-over-quarter, and has increased its inventory by 10x over the last year, according to its founders. It has also nearly tripled its headcount from 30 at the middle of last year to over 85 today. So far, Flat.mx has conducted thousands of home valuations and over 100 transactions.
Image Credits: Flat.mx
The pandemic only helped boost interest.
“Our low touch digital solution was key for having a strong business during the pandemic. We were able to create quick liquidity for sellers at a time in Mexico where it was complicated to sell,” said Cordero. “Our model allows sellers to sell with one visit instead of having to receive over 40 potential buyers at a time where they wanted to sell but also wanted to avoid contact with many buyers.”
The company plans to use its new capital to continue to develop what it describes as a “one-stop shop where homeowners and buyers will be able to get all the services they need in one place.”
The founders believe that rather than just try to tackle one aspect of the homebuying process, it makes more sense in emerging markets to address them all.
“We believe that each one of our products makes the others stronger and creating this ecosystem of products will continue to give us an important advantage in the market,” said Noguera. The startup plans to also use the capital from the round to expand its presence in Mexico for iBuying, and to invest in data and financial products.
Image Credits: Flat.mx
Naturally, Flat.mx’s investors are bullish.
Archie Cochrane, principal investor at Anthemis Group, said his firm views Flat.mx as an integral part of its embedded finance thesis in the context of the Mexican property sector.
“The iBuyer model itself is well understood and developed in many parts of the world, but it is also a complex model with many variables that requires a seasoned and astute team to execute the strategy,” Cochrane wrote via email. “When we met Victor and Bernardo, it was clear that their clarity of vision and deep understanding of the broader opportunity set would allow them to succeed over the long term.
Tim Chae, managing partner at 500 Startups, said he envisions that Flat.mx will become “the go-to route” for buyers, sellers, agents and lenders in Mexican real estate.
“There are nuances and specific problems that are unique to Mexico that Flat.mx has done a great job identifying and solving,” he said.
ALLVP Partner Fernando Lelo de Larrea said that essentially after years of “unkept promises,” software is finally transforming the real estate industry in Mexico.
“Most models replicate successful models from the more mature U.S. proptech space,” he said. “Since we started investing in proptech, we’ve never seen such an innovative approach to seizing a trillion dollar opportunity.”
Less than three months after announcing a $300 million Series E, Brazilian proptech QuintoAndar has raised an additional $120 million.
New investors Greenoaks Capital and China’s Tencent co-led the round, which included participation from some existing backers as well. São Paulo-based QuintoAndar is now valued at $5.1 billion, up from $4 billion at the time of its last raise in late May. With the extension, the startup has now raised more than $700 million since its 2013 inception. Ribbit Capital led the first tranche of its Series E.
QuintoAndar describes itself as an “end-to-end solution for long-term rentals” that, among other things, connects potential tenants to landlords and vice versa. Last year, it also expanded into connecting home buyers to sellers. Its long-term plan is to evolve into a one-stop real estate shop that also offers mortgage, title insurance and escrow services.
To that end, earlier this month, the startup acquired Atta Franchising, a 7-year-old São Paulo-based independent real estate mortgage broker. Specifically, acquiring Atta is designed speed up its ability to offer mortgage services to its users. QuintoAndar also plans to explore the possibility of offering a product to perform standalone transactions outside of its marketplace in partnership with other brokers, according to CEO and co-founder Gabriel Braga.
This year, QuintoAndar expanded operations into 14 new cities in Brazil. Eventually, QuintoAndar plans to enter the Mexican market as its first expansion outside of its home country but it has not yet set a date for that step. Today, the company has more than 120,000 rentals under management and about 10,000 new rentals per month. Its rental platform is live in 40 cities across Brazil, while its home-buying marketplace is live in four (Sao Paulo, Rio de Janeiro, Belo Horizonte and Porto Alegre) and seeing more than 10,000 sales in annualized terms.
QuintoAndar, he said, is open to acquiring more companies that it believes can either help it accelerate in a particular way or add something it had not yet thought about.
“We’re receptive to the idea but our core strategy is to focus on organic growth and our own innovation and accelerate that,” Braga said.
The Series E was oversubscribed with investors who got in and “some who could not join,” according to Braga.
Greenoaks and Tencent, he said, couldn’t participate because of “timing issues.”
“We kept talking and they came back to us after the round, and wanted to be involved so we found a way to have them on board,” Braga said. “We did not need the money. But we have been constantly overachieving on the forecast that we shared with our investors. And that’s part of the reason why we had this extension.”
Greenoaks’ long-term time horizon was appealing because the firm’s investment was designed to be “perpetual capital with no predefined timeframe,” Braga said.
“We’re doing our best to build an enduring company that will be around for many, many years, so it’s good to have investors who share that vision and are technically aligned,” he added.
Greenoaks Partner Neil Shah said his firm believes that what QuintoAndar is building will “fundamentally reshape real estate transactions, enhancing transparency, expanding options for Brazilians seeking housing, dramatically simplifying the experience for landlords and driving increased investment into real estate across the country.” He also believes there is big potential for the company to take its offering to other parts of Latin America.
“We look forward to being partners for decades to come,” he added.
Tencent’s experience in China is something QuintoAndar also finds valuable.
“We believe we can learn a lot from them and other Chinese companies doing interesting stuff there,” Braga said.
QuintoAndar isn’t the only Brazilian prop tech firm raising big money: In March, São Paulo digital real estate platform Loft announced it had closed on $425 million in Series D funding led by New York-based D1 Capital Partners. Then, about one month later, it revealed a $100 million extension that valued the company at $2.9 billion.
If you’ve ever sold a house, you know what a pain it is to go through the process of listing, showing and negotiating the sale of your home.
It’s so much of a pain that many people put it off as long as possible because they don’t want to deal with it. The result is fewer homes on the market, which exacerbates existing housing shortages in already tight markets such as the San Francisco Bay Area.
In an attempt to help address the problem, one startup called Aalto has built out a new kind of homeowner marketplace. It’s a pricate one that doesn’t rely on the MLS, and gives sellers more control of how and when their homes are listed, shown and sold. Today Aalto is emerging from stealth and announcing that it has raised $13 million in a Series A funding round led by Sequoia Capital.
Background Capital, Defy Partners, Maple VC and Greg Waldorf — the first investor at Trulia — also participated in the financing, which brings Aalto’s total raised to $17.3 million since its 2018 inception.
Aalto’s online marketplace, which launched in April of this year, directly connects homeowners to buyers. The company claims that a potential seller can list their home on its platform in five minutes, rather than a typical process that is closer to five weeks. Since launching in the Bay Area, Aalto has built up a network of more than 30,000 buyers and more than two dozen homes have been sold via the marketplace. Currently, about 85 homes are listed for sale on its platform, with an average of one new home being added per day.
Ironically, Aalto founder and CEO Nick Narodny is the son and brother of real estate agents. He concedes that the startup’s platform could be seen as a threat to the industry, but notes the trade-off is that more homes end up on the market, which helps minimize the region’s affordability crisis, and sellers see higher returns.
Currently, 5-10% of total available inventory listed in competitive markets like Dublin, Fremont, Mill Valley and Milpitas are listed on the Aalto platform. And, Narodny said, the company is on its way to bring more homes to market, sooner.
“Buying or selling a home is one of the biggest events people will ever experience, but it’s also a tedious, outdated process,” he said.
Image Credits: Nick Narodny / Aalto
Aalto aims to double the number of homes on the market in the Bay Area by streamlining the way homeowners can list, without the third-parties or contracts required elsewhere. This dramatically lowers the bar to sell, according to Narodny, bringing homes to market an average of four and a half months earlier than traditional real estate processes.
The platform offers a preview listing feature that allows sellers to list with no commitment. They can also build a waitlist of qualified buyers for their home while they consider a sale.
“We pull the tax record and info to make it super easy and ask the seller to fill out a Q&A,” Narodny said. After filling out that info, sellers can then see interested buyers and those that are prequalified or that can make all cash offers.
The process is also less intrusive, Narodny said, by giving the seller more of a say in who sees their home and when. For example, sellers can also line up virtual or in-person showings on their own schedule. And they can sell the homes on their timelines — whether it be in a few weeks, or few months.
For example, a San Francisco-based hand surgeon recently listed his home on the Aalto platform with the desire of moving at the end of October. More than two dozen people were interested and he allowed a few people to tour the home. He was able to sell the house based on a timeline that was more beneficial for him.
“People can sell totally on their terms and are much more connected in the process,” Narodny said. Busy professionals such as the surgeon with director and above titles and growing families so far are among the most common sellers on the platform.
Image Credits: Aalto
Also, there is an economic benefit. By removing a middleman, or agent, from the process, sellers can make an average of $44,000 more on their home sale, according to Narodny. The startup charges a 1% fee, compared to the 2-2.5% commission that an agent charges. But if a seller requires help “with the hard stuff,” Aalto has “expert, licensed” people available.
Sellers can also craft descriptions of their homes in a way that comes across as more personal than if an agent does it, according to Narodny.
“We have them tell their own story of their home,” he said.
It also gives them more privacy. For example, an MLS will show when a home was listed and any price reductions. A home listed on Aalto won’t include any of that information. Also similar to Airbnb, the seller’s exact address is not shared, just a radius.
The benefit for buyers — besides having more options — is the ability to set up instant alerts, join waitlists and schedule showings in one easy-to-use platform. They can also “anonymously prequalify and share that with a seller,” Narodny said.
Bryan Schreier, partner at Sequoia Capital, believes that real estate is “one of the last giant industries with a 1900s experience.”
“It’s a painful process where the seller has limited visibility and the buyer is holding their breath after every bid,” he said. “Aalto is the first company to reinvent how homes are bought and sold by putting the consumer first. It goes far beyond a listing site and reinvents every aspect of the experience to be customer oriented rather than realtor oriented.”
Looking ahead, the company plans to expand beyond the Bay Area to other major metropolitan real estate markets in California and across the country. It also plans to use its new capital to continue improving its technology.
Meanwhile, Narodny insists that while the platform may be seen as a threat by some agents, it’s not a malicious thing.
“My family and I are very close. It’s something that I talk about with them quite a bit,” he told TechCrunch. “I believe Aalto truly is additive. We still work with them every day and will continue to…It’s not like agents are totally being replaced.”
La Haus, which has developed an online real estate marketplace operating in Mexico and Colombia, has secured $100 million in additional funding, including $50 million in equity and $50 million in debt financing.
The new capital was obtained as an extension to the company’s Series B, the first tranche of which closed in January. With the latest infusion, Medellin, Colombia-based La Haus has now secured $135 million total for the round and over $158 million in funding since its 2017 inception.
San Francisco Bay Area venture firms Acrew Capital and Renegade Partners co-led the round, which also included participation from Jeff Bezos’ Bezos Expeditions, Endeavor Catalyst, Moore Strategic Ventures, Marc Benioff’s TIME Ventures, Rappi’s Simon Borrero, Maluma, and Gabriel Gilinski. Existing backers who put money in this round include Greenspring Associates, Kaszek, NFX, Spencer Rascoff’s 75 & Sunny Ventures, Hadi Partovi and NuBank’s David Velez.
Jerónimo Uribe (CEO), Rodrigo Sánchez-Ríos (president), Tomás Uribe (chief growth officer) and Santiago Garcia (CTO) founded the company after Jerónimo and Tomas met Sánchez-Ríos at Stanford University. Prior to La Haus they started and ran Jaguar Capital, a Colombian real estate development company with over $350 million of completed retail and residential projects.
The company declined to reveal at what valuation the extension was raised, with Sánchez-Ríos saying only that it was “a significant increase” from January.
The Series B extension follows impressive growth for the startup, which saw the number of transactions conducted on its Mexico portal climb by nearly 10x in the second quarter of 2021 compared to the 2020 second quarter. With over 500 homes selling on its platform (via lahaus.com and lahaus.mx) the company is “the market leader in selling new housing in Spanish-speaking Latam by an order of magnitude,” its execs claim. La Haus expects to have facilitated more than $1 billion in annualized gross sales by the end of the year.
The startup was founded with the mission of making it easier for people to buy homes and helping “solve LatAm’s extreme housing inequality.” Its end goal is to accelerate access to new housing by both generating and curating supply and demand and then matching it with its technology, noted Sánchez-Ríos.
“In the last six months, our chief product officer has built a product that allows this to happen 100% digitally,” he said. “Before it would take a lot of time, people involved and visits. We want to provide people looking for a home a similar experience as to people looking for their next flight at delta.com.”
It has done that by embedding its software to developers’ new projects so that it can bring that digital experience to its users.
“They are able to view the projects on our sites, we match them and then they can see in real time which units of a particular tower are available, and then select, sign and pay for everything digitally,” Sánchez-Río said.
Image credit: La Haus
The need for new housing in the region and other emerging markets in general is acute, they believe. And the pace of building new homes is slow because small and mid-sized developers – who are responsible for building the majority of new homes in Latin America – are cash constrained. At the same time, mortgages are mostly not affordable for consumers, with banks extending only a fraction of the credit to individuals compared to the U.S., and often at far worse terms.
What La Haus is planning to do with its new capital – particularly the debt portion – is go beyond selling homes via its marketplace to helping extend financing to both developers and potential buyers.It plans to take the proprietary data it has been able to glean from the thousands of real estate transactions conducted on it platform to extend capital to developers and consumers “more quickly, with much lower risk and at better terms.”
Already, what the startup has accomplished is notable. Being able to purchase a home 100% digitally is not that easy even in the U.S. Pulling that off in Latin America – which has historically trailed behind in digital adoption – is no easy feat. By year’s end, La Haus intends to be in every major metropolitan area in Mexico and Colombia.
Its ultimate goal is to be able to help new, sustainable homes “to be built faster, alleviating the inequality caused by lack of access to inventory.”
To Acrew Capital’s Lauren Kolodny, La Haus is building a solution specific to the issues of Latin America’s housing market, rather than importing business models – such as iBuying – from the U.S.
“For many people in the United States home equity is their largest asset. In Latin America, however, consumers have been challenged with an impenetrable real estate market stacked against consumers,” she wrote via email. “La Haus is removing barriers to home ownership that stifles millions of people from achieving financial security. Specifically, Latin America has no centralized MLS, very costly interest rates, no transactional transparency, and few online informational tools.”
La Haus, Kolodny added, is breaking down these barriers by consolidating listings online, offering pricing transparency and educating consumers about their financing options.
Acrew first invested in the startup in its $10 million Series A and has been impressed with its growth over time.
“They have a unique focus on new housing — a massive industry worldwide, but especially in emerging markets where new housing is so necessary,” Kolodny said. “The management team…knows real estate in Latin America better than anyone we’ve met.”
For its part, the La Haus team is excited to put its new capital to work. As Sánchez-Río put it, “$50 million goes a lot further in Mexico and Colombia than in the U.S.”
“We are going to be very aggressive in Mexico and Colombia, and plan to go from four to at least 12 markets by the end of the year,” Jeronimo told TechCrunch. “We’re also excited to roll out our financing solution to developers and buyers.”
Realm, which aims to help homeowners maximize the value of their property with its data platform, has raised $12 million in Series A funding led by GGV Capital.
Existing backers Primary Venture Partners, Lerer Hippeau and Liberty Mutual Strategic Ventures also participated in the round, bringing the New York-based startup’s total raised to $15 million.
Liz Young founded Realm, launching the platform earlier this year with the goal of providing “a one-stop-shop for accessible, actionable home advice.”
So far, Realm says it has helped over 20,000 homeowners “uncover” an average of $175,000 in property value. Its user base is growing 20% month over month.
What makes the company different from other valuation offerings out there, according to Young, is that rather than telling owners what their homes are worth today, Realm can tell them what their home could be worth after renovations in months and years to come.
“There are a ton of tools and services that make it easier to buy or sell your home, but once you move, it’s a total black box,” she said. “You’re left trying to cobble together advice from fragmented, often biased resources to navigate big, expensive decisions. There’s nowhere else consumers spend so much money, with such little actionable information.”
For example, using data extracted from a variety of sources such as tax assessors and its own users, Realm can do things like tell a homeowner in real time how their property value will change if they do things like make over a bathroom or add a new deck. Its algorithms can assess a property and offer advice on what projects are most likely to add value.
“The public data that we acquire, the data we ingest from users, and the data that we build ourselves has allowed us to build the most robust and unique actionable real estate data set in the U.S.,” Young told TechCrunch.
Realm’s database is free and according to Young, offers insights on over 70 million single family detached homes across the U.S.
Part of that is determined by zoning data, which tells people where they can and cannot build on a property.
“It’s really important because square feet is one of the biggest drivers of home value,” Young said. “So if you’re trying to understand how much a home’s worth or could be worth, you really have to understand the local zoning rules.”
Image Credits: Realm
Realm’s marketplace offering, where an adviser connects owners to contractors, architects and lenders that can carry out the company’s recommendations, is currently only live in California, but will be expanding to new markets over the next 12 months.
“People can digitally consume our free insights but a lot want help interpreting them,” Young said.
The company plans to use its new capital to “improve the quality and sophistication of the platform’s data insights” and toward hiring across its data science, engineering, marketing and operations teams. It will also continue to develop its proprietary data sets and models, which offer homeowners across the country personalized analysis of over 70 million homes.
A lot of Realm’s business is driven by its relationships with agents and word of mouth via its existing user base.
Jeff Richards, GGV managing partner and new Realm board member, said that when his firm backs at the Series A level, its bet is “100% on the founder.”
“I met Liz when she was raising her seed round in July 2020 and was blown away,” he told TechCrunch. “She’s smart, ambitious and has a deep background in the space she’s going after. Although it was early, I could tell she was thinking big.”
Founder and CEO Liz Young. Image Credits: Realm
He points out that GGV Capital, with $2.5 billion in assets under management, is a long-time investor in other proptechs including Opendoor, Divvy Homes, Belong and Airbnb.
“Zillow made it easy for people to find a home to buy. Opendoor made it easy to buy and sell a home,” Richards told TechCrunch. “Airbnb made it easy to rent a home for a short-term vacation. Belong is making it easy to rent a home for the long term.”
Realm, according to Richards, was right in GGV’s “sweet spot.”
“No one has zeroed in on helping the individual homeowner manage their home, and that’s the opportunity area Liz is going after,” he said. “We kept in touch after the seed round, she pinged me to talk about her A, we met up and I gave her a term sheet 48 hours later.”
In general, Richards believes that residential real estate is one of the biggest spend categories in the U.S. and yet is still virtually untouched by technology.
Home sales are over $1.6 trillion annually, home improvement is one of the biggest categories in the U.S. at over $500 billion annually, and the average home renovation project in the U.S. is around $15,000, with many spending over $50,000.
“I’ve owned a home for 17 years and almost everything I do with respect to the home is the same as it was over a decade ago. The only thing that has really changed is I can manage my thermostat and cameras with my phone,” Richards said. “Literally everything else is the same — the way I do renovations, the way I find contractors to do repairs, the way I pay my mortgage, etc. — exactly the same. That’s ridiculous! Liz sees a huge opportunity here, and so do we. The market is enormous. So there will be many, many winners.”
On Tuesday, R-Zero, a pandemic-era biosafety company, announced the acquisition of CoWorkr – a company that develops room occupancy sensors. The acquisition marks a shift in focus for R-Zero as people return to work, vaccines are rolled out, and companies that sprung up in response to the COVID-19 adapt to another phase of the pandemic.
When R-Zero was founded in April 2020, the company primarily focused on developing hospital-grade UVC disinfection systems, or lights that can neutralize certain types of viruses (more on this later). As companies scrambled for ways to sanitize buildings, the company racked up a total of $58.8 in funding at a $256.5 million valuation. R-Zero now has about 1,000 private and public sector clients that range from correctional facilities, to the Brooklyn Nets and Boston Celtics, to the South San Francisco Unified School District.
CoWorkr was founded in 2014 and had totaled about $200,000 in seed funding, per Crunchbase.
With the acquisition of CoWorkr, R-Zero plans to develop an internet of things-style sensor network to manage both personnel and cleaning in the workplace, says R-Zero founder Grant Morgan. The company is moving beyond simply disinfecting air and surfaces, and will focus on managing the flow of people (and the viruses and bacteria) in public spaces.
“It’s like an OS for the workplace. That’s what we’re building: Tools that help both create and maintain indoor environments with health and productivity at their core,” Morgan tells TechCrunch.
Elizabeth Redmond and Keenan May, both co-founders of CoWorkr, will remain on in full time roles, where they will run a corporate real estate initiative, and develop an IoT capacity.
“We’ve spent a lot of time with our customers and understanding our customers’ initiatives, especially in commercial real estate,” Redmond tells TechCrunch.
“The majority are moving to a hybrid working scenario and that means you know they really need occupancy information,” she continues. “Our initiative in joining with R-Zero is very much highlighted by what the future of hybrid work looks like and what the future of commercial real estate looks like.”
Pre-CoWorkr, R-Zero’s flagship product was a UVC light called Arc – a rectangular light that can be wheeled into an office space once janitorial staff leave the office. It also offered a product called Arc Air, an air filter that also uses UVC light to kill germs, and that could be used in occupied spaces.
UVC lights had a brief moment of fame in mid-2020 for several reasons: they seemed like powerful ways to disinfect communal spaces, and there were certain incentives for companies to apply tech-based solutions to COVID-19.
UVC lights have been used in hospitals for decades to sanitize surfaces like scanners, or to sanitize air when inserted into UV air ducts. Studies have shown it can inactivate flu viruses in the air. Limited evidence also noted that UVC can also inactivate SARS-CoV-2 and other coronaviruses by destroying the virus’ outer protein coating.
These lights were also used in real-life during the pandemic. The New York Metropolitan Transport Authority, for example also, purchased $1 million worth of UVC lights to disinfect subway cars each evening. The CARES act passed in March 2020 was to allow companies and public sector institutions to use government loans to purchase cleaning services, including UV lights.
Still, some consumer-facing lamps drew their fair share of criticism. For one, they can cause eye injuries or burns if people are exposed to them for a long period of time. One review of UVC disinfection (notably, written by two scientists with ties to a UVC disinfection company) offered a blunt assessment noting that “nonscientific performance claims” were “widespread” in the nascent industry.
For its part, R-Zero’s Arc does have third-party testing to its name – it was shown to reduce 99.99 percent of two viruses: a common cold coronavirus, and a surrogate for norovirus on surfaces. It was also 99.99 percent effective in killing off E. Coli and Methicillin-resistant Staphylococcus aureus (MRSA).
Despite back-and-forth over the utility of some UVC lights as disinfection technology, some analysts suggest this industry isn’t going anywhere (for one, LG has entered the UV-based cleaning space). Tim Mulrooney, a commercial services equities analyst for William Blair told the Washington Post that we’re living through a “paradigm shift” in how people think about hygiene.
Polling from 2020 suggests that cleaning procedures were top of mind for employees and customers alike. Of 3,000 people surveyed by Deloitte, 64 percent of employees said that regular cleaning of shared spaces was important to them and 62 percent of customers wanted surfaces cleaned after every interaction. (This is despite evidence that surfaces aren’t thought to be a way that COVID-19 spreads).
At this point, it’s unclear how the rise of vaccines might impact perceptions of office cleanliness. But Morgan is betting that companies (and employees) are now more aware of the germs in our midst than they might have been pre-pandemic, and will be eager for ways to control their spread – that includes managing the flow of people within an office.
For R-Zero that means moving beyond UVC disinfection to focus on occupancy management, with the acquisition of CoWorkr.
Morgan calls CoWorkr’s sensors R-Zero’s “eyes and ears.” R-Zero plans to announce two UVC-based products that address air cleanliness in occupied spaces, and will use CoWorkr’s sensors to ensure “full automation.”
For instance, CoWorker’s battery-powered thermal sensors allow employers to know which rooms in an office are being occupied. That information, he says, could help trigger the use of an UV-based air filter or other cleaning products.
That information could also tell janitorial staff to clean the room more thoroughly that evening — or conversely, to forgo cleaning a room that hasn’t been touched all day.
“What our customers are seeing is that they’re getting an immediate ROI. Our customers are reducing labor costs by 30-40 percent,” says Morgan.
Overall, says Morgan, the company is still bullish on the idea that people will still crave clean workspaces; perhaps due to some lingering “scar tissue” from the pandemic, he notes.
“In almost 100% of cases, our customers are looking at this as a long term investment,” Morgan adds.
Commercial real estate tenants and property managers have to abide by strict liability rules that any vendor entering the property must have insurance certificates and meet other requirements. The approval process for this currently can take days and is still largely done on paper.
Enter Jones. The New York-based commercial real estate startup is curating a marketplace of pre-approved vendors for tenants and property managers to find and hire the people they need in a compliant way.
To continue advancing its network, the company announced Monday it raised $12.5 million in Series A funding led by JLL Spark and Khosla Ventures that also included strategic investors Camber Creek, Rudin Management, DivcoWest and Sage Realty. This new investment brings Jones’ total raised to $20 million, according to Crunchbase data.
Jones, founded in 2017, also manages certifications and approvals, moving the whole process online. Its technology can process an insurance certificate in less than an hour and reduce the overall vendor approval time to 2.5 days — from 12 days — with 99.9% accuracy, co-founder and CEO Omri Stern told TechCrunch.
The accuracy portion is key. With much of the work being done by hand, current accuracy is at about 30%, he added. In addition, the certifications are lengthy, and it is typically up to property managers to parse through the insurance documents to identify what is missing rather than spending time with tenants.
“In the consumer world, a homeowner expects to go on a marketplace and find a service and hire them,” Stern said. “Office managers and tenants can’t get their preferred vendors through the approval process, so we want to provide a similar digital experience that they can consume and use in real estate.”
He says Jones’ differentiator from competitors is that all of the stakeholders are in place: a group of high-profile real estate customers, including Lincoln Property Co., Prologis, DivcoWest, Rudin Management, Sage Realty and JLL.
Yishai Lerner, co-CEO of JLL Spark, agrees, telling TechCrunch that commercial real estate is one of the largest and last asset classes that is undergoing a technology transformation, similar to what fintech was 20 years ago.
He estimates the U.S. market to be $16 trillion, of which technology could unlock a lot of the value. That opportunity was one of the drivers for JLL to create JLL Spark, where Jones is one of the first investments.
Though Lerner spent time with property management teams on the ground, he became up close and personal with the problem when his wife, while moving offices, found out her vendors were not allowed in the building because they didn’t have the right insurance.
“We learned that property managers spend half of their time just working to verify the compliance of vendors coming into their building,” Lerner said. “We wondered why there wasn’t technology for this. Jones was doing construction at the time, and we brought them into commercial real estate because they had an example of how technology could solve the problem.”
Meanwhile, the Series A comes at a time when Stern is seeing Jones’s SaaS tool take off in the past 10 months. He would not get specific with growth metrics, but did say that what is driving growth is “competing against the status quo” as companies are searching for and adapting workflow solutions.
The company intends to use the new funds on product development in both quicker and easier approvals and bringing on new vendors. Jones already works with tens of thousands of vendors. It will also focus on integration, offering an API that could be used in other industry verticals where compliance is necessary.
Stern would also like to continue building the team. Having brought in real estate experts, he is now also looking for people with backgrounds in fintech, cybersecurity and insurtech to bring in additional perspectives.
“We are building an incredible company with the opportunity to be the next big digital marketplace,” he added.