Future City: Democratizing vacation homes, Bungalow’s breakdown


Spencer’s second act: Vacation homes for all!

Zillow co-founder Spencer Rascoff is back in the real estate game.

The former CEO went public this week with his latest venture: Pacaso, a startup that helps ordinary people purchase second homes.

“We’re trying to create a new category of home ownership, which is second-home ownership,” Rascoff said during an interview on CNBC. To “democratize” ownership, Pacaso’s marketplace helps aspiring owners purchase from one-eighth to one-half of a vacation home. The company will generate revenue on the home sale, and it will collect a fee for managing the property.

Founded by Rascoff and Austin Allison, who sold dotloop to Zillow, Pacaso came out of stealth mode with a $17 million Series A led by Maveron, with participation from Crosscut and Global Founders Capital. Former Starbucks CEO Howard Schultz and Amazon’s Jeff Wilke also invested. Pacaso also secured $250 million in debt to help buyers purchase homes.

It’s not Rascoff’s only new venture. The serial entrepreneur has also formed a blank-check company that’s looking to take a tech unicorn public. Since stepping down as Zillow’s CEO in February 2019, Rascoff has invested in a slew of real estate startups.

He has a penchant for early-stage startups, too. This year, he launched dot.LA, a news site covering Southern California tech. And he’s written checks to PocketList, a rental listings platform, and La Haus, a Latin American listings site. He was also an early investor in smart-intercom startup ButterflyMX.

“This is just a dressed-up version of the typical asshole landlord scenario.”

Frustrated Bungalow resident 

Airbnb valuation could hit $30B in IPO

It’s finally happening. Airbnb is looking to raise $3 billion in a December IPO, according to a new report. Sources told Reuters that Airbnb plans to file a prospectus in November after the presidential election. The sources also said Airbnb could hit a $30 billion valuation — up from its $18 billion valuation in April, when it secured $2 billion in debt and equity. That’s a remarkable turnaround for the home-share startup, which in May laid off a quarter of its staff and lost $1 billion in bookings overnight. But travel is bouncing back faster-than-expected, and Airbnb is benefitting from guests who don’t want to stay in a hotel because of coronavirus concerns.


Is Covid to blame for Bungalow’s woes? Some say no

Bungalow Living, a shared-living startup that’s raised $118 million from investors, may be the latest victim of coronavirus. The company, which manages between 500 and 1,000 units, has been telling some landlords it won’t make rent next month, according to The Information. The two-year-old company is blaming the soft rental market in major cities for its financial woes. But sources said the cash-strapped company was missing growth targets even before Covid struck. Others said Bungalow never had a great system for handling maintenance requests, leading to unhappy tenants.

Proptech funding is nosediving: report

Despite surging demand for real estate tech, proptech funding could fall by up to 53 percent this year, according to a new report from Deloitte. Based on data from Venture Scanner, the report predicted U.S. proptech funding could slide to between $7.3 billion and $8.3 billion. Last year, funding in the sector hit a record $15.5 billion, up from $4.9 billion in 2016. So far this year, funding is down 41.5 percent, the report found.

Any pain is likely to be short-lived, however. The report predicted funding would rebound to $10.9 billion to $17.2 billion in 2021. The pandemic has accelerated certain tools such as digital leasing, “smart” cleaning and remote property management.


STAT OF THE WEEK

-5%

One-day drop in Palantir’s share price after stock market debut


Domio founders out after Airbnb suspension

The founders of hospitality startup Domio abruptly resigned last week, following an Airbnb probe over alleged malpractice. Former CEO Jay Roberts and chief strategy officer Adrian Lam stepped down after the blistering report, which alleged Domio used fake host names and Airbnb accounts to flout local laws. Founded in 2016, Domio has raised $116 million in debt and equity. The fake names and photos made listings hard to pin on Domio in cities with short-term rental limitations. After an investigation, Airbnb removed Domio’s accounts from the platform.

The key to unlocking smart doors? $35M

A $35 million funding round will open a lot of doors for smart-intercom startup ButterflyMX.

The round, led by Volition Capital, coincides with surging demand for contactless entry in apartment buildings. Founder Cyrus Claffey said the company will use the cash to develop additional products and add verticals, including commercial real estate. With just a touchscreen, ButterflyMX automates building entry with “virtual keys” akin to QR codes. Clients include AvalonBay Communities, Lennar and Equity Residential, among others. (TRD Publisher Amir Korangy is an investor.)



In Toronto, a price-match guarantee for your home

Properly, a startup that gives sellers a price-match guarantee for their homes, has secured $100 million CAD to scale its business.

Founded in 2018, the Toronto-based startup is one of several new companies focused on freeing up home equity for owners. By making certified back-up offers on homes, Properly enables owners to purchase a new home before selling the old one. If the old home doesn’t sell in 90 days, Properly will buy it. In that regard, it’s similar to iBuyers that buy homes for cash in all-digital transactions.

The new funding, in the form of debt, will help Properly meet surging demand to buy homes, CEO Anshul Ruparell told Inman. The funding comes from Silicon Valley Bank and i80 Group. Last year, Properly raised a $12 million Series A.


Small bytes

👨Matthew Linnington resigned as head of sales at CoStar to pursue “personal interests.”

🎬Compass tapped Charles Phillips, a former president of Oracle, as an independent director.

🎬Former NYC housing czar Alicia Glen has joined the board of co-living startup Common.

💰 SquadStack, a sales acceleration startup, closed a $5M round led by Chiratae Ventures to grow “Auctm,” a real estate vertical focused on customer leads.

🗺 Engrain, an interactive mapping startup that helps people find and lease property, raised $3.7M. RET Ventures led the round.

🌆 Startups are flocking to Austin, where investments hit $2.2B last year, up 34% since 2014.

💸 Lane, a platform for managing office space, acquired eServus, a corporate concierge with 250,000 customers.


 

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