Companies like Opendoor opened the door to a new way of buying and selling properties by inserting a strong middle player who could buy in houses or apartments and redevelop them at scale, and then sell them to new homeowners at a profit. Now Clikalia, another player in the so-called iBuyer space, has raised €75 million ($86 million) to take that model to markets in Europe and Latin America.
The company is primarily active in Spain and Mexico, where it currently has a run rate of 2,400 properties acquired. As a point of comparison, that is 600 up on the 1,800 run rate Clikalia disclosed only one month ago when it raised $518 million ($70 million in equity; the rest in debt) to scale the business.
SoftBank Vision Fund 2 and Fifth Wall are co-leading the round with participation from existing investors Luxor Capital and Guillaume Pousaz. This is SoftBank's first property tech investment in Europe, although it's no stranger to the iBuyer model. Both it and Fifth Wall were big backers of Opendoor, one of the pioneers in the space.
Alister Moreno, the CEO who co-founded the company with Pablo Fernandez, said that Clikalia will be using the funds to expand the business, both by taking it to more cities in its main markets, and by entering other countries. It's already doing some work in Portugal, and we understand France is next on the list.
It will also be investing in inking more partnerships with companies that bring in a steady stream of inventory and those that can make the renovation process more efficient. Moreno said that last year Clikalia started working with Ikea in Spain and one of the bigger banks in the country, la Caixa, to buy in houses under the control of la Caixa, and then with Ikea completely renovate those homes and sell them on again.
Moreno and Fernandez started Clikalia after working for years in the U.S. on behalf of Santander, where they came across Carvana, which applies the iBuyer model to cars. After leaving Santander and returning to Spain, they first built a Spanish version of Carvana called Clicars, and then they turned their attention to applying the model to property, with Clikalia, to tackle what they estimate to be a $1 trillion market for second-hand homes, which in Europe and the dense cities of Latin America are just as likely to come in the form of apartments as single-unit structures.
While there is a very physical asset, a home — and an equally physical process involved with the renovation of that home — at the center of Clikalia's work, Moreno said he thinks of the company as a technology and data company first.
“The iBuyer model is an excuse to travel with the customer,” Moreno said, with the idea being that Clikalia brings together and simplifies the many steps needed to sell or buy a home in a one-stop-shop model.
“Every step of the process could be an independent company,” he added.
The stages include marketing and listing of the property, the data tracking the pricing based on location and how much to invest in renovating a home in a particular area, and a number of other services before, during and after a home purchase. All of that technology definitely came into its own during the peak of Covid-19, he said, when in Spain people were virtually forbidden to leave their homes without special permission.
All of these steps, and the different variables that come into play across different home types, different demographics, and different country regulations make for a very fragmented market, which is one reason why investors are interested in Clikalia: it has positioned itself as a platform that can potentially simplify all of that not just for home buyers and sellers, but also the many others involved in the home buying and ownership process.
That's not guaranteed to be as smooth as it sounds, and plenty have found it a bumpy market: Opendoor, for example, currently has a market cap of just under $6 billion, far below its $17 billion market cap when it first went public in a SPAC merger. But belief remains that the model can, over the long term, produce positive returns.
“The residential real estate market in Southern Europe is highly fragmented, with limited price transparency, poor quality stock and transactions on average taking twice the time of other European markets,” said Elizabeth Wells, investor for SoftBank Investment Advisers, in a statement. “We believe Clikalia’s technology directly addresses these legacy asymmetries and improves the customer experience at every stage. We’re excited to partner with Alister, Pablo and the whole team in their mission to make the process of buying and selling homes more transparent, efficient and affordable for consumers across Europe and Mexico.”
“We’re excited to continue supporting Clikalia’s team due to their continued strong execution and financial outperformance,” added Miguel Nigorra, partner and co-head of Europe for Fifth Wall. “Clikalia’s plans to expand their activities across several European markets shows their commitment to become the dominant residential real estate platform in Europe.”