Opendoor opened the door, so to speak, to the idea of applying technology to the concept of house flipping to both scale the opportunity and make it considerably more efficient. And while its share price is being hammered at the moment in a wider downturn for tech stocks overall, it’s a strong enough concept that it’s inspired a number of others to follow in its footsteps. In the latest development, an Opendoor-style startup called Casavo, out of Italy, is announcing that it has raised €400 million (about $410 million currently).
It plans to use the money to expand its business across Europe on the back of a platform that today is listing close to 4,000 homes in Italy, Spain and Portugal, and has to date (since being founded at the end of 2018) sold some 3,200 properties for an aggregate value of €1 billion, according to CEO and founder Giorgio Tinacci.
The funding is coming in the form of a €100 million Series D and €300 million in debt to buy up and fix up properties. Casavo noted that this Series D is the largest “proptech” equity investment to date in Europe, while the debt round takes the startup’s borrowing capacity to half a billion euros.
Tinacci said in an interview with TechCrunch that the company was not disclosing valuation except to note that it’s more than twice the size it was in its last round. For context, that was $194 million in February 2021, per PitchBook data, which makes Casavo’s valuation now likely over $400 million.
Exor — a traditional-style holding company controlled by the Agnelli family that has a wide variety of investments ranging from publishing (eg, The Economist) through to automotive brands (eg, Ferrari and Stellantis) and sport clubs (football behemoth Juventus) — is leading the equity round with participation from a number of others that will be giving 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). Alongside them, previous backers 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 D.E. Shaw & Co provided the debt.
Casavo’s rise has largely come out of three main areas: the pandemic, the gaps in the property market in Europe as it exists today, and Casavo’s particular approach to tackling that.
As with the pandemic in the U.S., the lockdown spurred a new focus on home life, and where people were living, leading to people looking for places (or renovating their existing places) to create more space and versatility given the increased time spent there. “There was a shortage of inventory but very strong demand,” Tinacci said. Platforms like Casavo’s found a lot of traction for making it easier both to buy and sell in the pandemic climate, he added.
The state of the market in particular lent itself to this. A large proportion of privately-owned housing is in the hands of the families who are already living there, and typically they do not work with brokers. These factors effectively slow down the buying and selling process: this puts people into “chains” where they have to typically sell their place in order to move into another one, making instant buyer platforms like Casavo that could speed this up — say, by buying up a property immediately to free up capital for the seller, and taking on the fixing up of that property to sell it at a profit that Casavo in turn realizes for itself — a more attractive and more-used option.
That very much played out for the startup. Pre-Covid, Tinacci said that in Italy it was typically seeing 500,000 residential transactions annually. Last year, that ballooned to over 700,000 — with an emphasis on metropolitan properties, and by default apartments rather than houses (which are much more of the norm in metropolitan areas, especially in Europe).
“For sure firms like Opendoor or Loft in Brazil a source of inspiration for us,” Tinacci admitted, adding that some have casually referred to Casavo as a “European Opendoor.” But this is just really the first part of what Casavo does, he added.
“The so called ‘instant buyer’ approach has been our core and initial step, but we’re different from it,” he said, noting that the reason why he feels Casavo has bigger potential is because the aim is to go beyond it. Instant buying, he continued, helped the company aggregate supply “which is very significant 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 more than 25% of transaction volume. “We expect this ratio to be in 50% in one year,” he added. In other words, it’s started as Opendoor, but ultimately wants to be Zillow, too.
“Casavo is becoming the clear European PropTech leader and we are excited to continue the journey with Giorgio. Despite turbulent market conditions, the team has executed extremely well to date and we are optimistic about the future,” said Noam Ohana, MD of Exor Seeds, in a statement.