Immo Investment Technologies, a London-based fintech startup that purchase homes on behalf of buy-to-let investors, has closed €11 million in Series A funding.
Backing the round is Talis Capital and HV Holtzbrinck Ventures, with participation from Tom Stafford and Rahul Mehta of DST Global, and Mato Peric, among others. In addition, the company is disclosing that it has raised more than €60 million in real estate "buyer capital."
It will use the buyer capital to fund the acquisition of properties -- targeting private individuals who want to sell their property quickly. It then refurbishes these properties and puts them on the rental market as part of a fully managed package, therefore returning a predictable yield to investors.
Immo says it has already evaluated more than 10,000 for-sale apartments in the launch city of Hamburg. It claims its technology can accurately predict property sales prices, as well as current and future rental income prices.
"Immo buys residential properties directly from consumers on behalf of professional investors, thereby helping consumers sell their home in a fast, reliable, transparent and convenient way and providing investors with desired residential asset exposure at scale," explains Hans-Christian Zappel, the startup's co-founder and CEO.
"Immo tenants enjoy a well invested, fully furnished long-term rental product and a highly standardised and professionally managed lettings experience."
As well as serving investors and tenants, Immo is also targeting property owners that want to sell their home quickly, with less hassle, and without the expense of using an estate agent. "With Immo, consumers go through one viewing, receive an offer within 24 hours and then sell to us without any agency fees and free of worries about financing risks or changing minds," says Zappel.
The ability to transact "fast and confidently" is based on the company's data and tech-driven approach to understanding markets and assets, says the Immo co-founder. "We replace instinct and gut-based valuations with data; we call this the ‘Immo Intelligence,’ " he adds.
In this regard, it echoes similar claims made by Nested, another London-based fintech company aiming to remove the uncertainties surrounding selling a property.
"Using our inspection technology we collect a proprietary set of 281 data points about every property," continues Zappel. "Everything from ceiling height, decibel noise levels, wall dampness, lumen levels to water pressure gets measured. The resulting asset information is then combined with a hyperlocal market assessment which is based on two automated valuation models that use historical transaction and lettings data as well as environmental data such as traffic flow, crime statistics, average school/restaurant/cafe ratings, average Airbnb ratings in the area, social media activity, distance to supermarkets/places of worship, etc. to come up with the price we are able to offer to the seller."
Based on its machine learning model, Immo claims to be able to do the financial underwriting of a property "in a matter of minutes," a process that when done manually can take days.
Meanwhile, traditional real estate brokers are arguably Immo's most direct competitors, but they tend to charge high fees and don't provide a standardised experience for sellers. "They sell the hope for a quick and convenient sale to a customer that is helpless. Immo actually delivers on that promise," says Zappel.
He also argues that Immo isn't currently competing directly with other "iBuyer" models, such as those operated by OpenDoor, Nested and Casavo. "We are not in the same country market [yet]," he says, "but fundamentally these players are trying to address a similar problem for the consumer."
"Immo's C2B model -- buying from consumers, selling to investors -- is in our view superior to the C2C model [of] buying from consumers, [and] selling to consumers," adds Zappel. One reason is that Immo is able to operate a “balance sheet light” model, in which properties don't sit on its balance sheet and therefore is arguably less exposed than some other "iBuyer" models.
Immo generates revenue from investors that pay the startup a fee for sourcing, assessing and acquiring property assets. In addition, the company receives a subscription fee for ongoing portfolio management. "We don't take any fees from the seller, nor from tenants," says Zappel.