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[LONDON] German ecommerce investor Rocket Internet is backing online apartment rental firm Nestpick as the start-up expands into four European countries, aiming to connect landlords with tenants and put real estate agents out of a job.
Nestpick said on Tuesday it was expanding into 14 cities in Britain, France, Italy and Spain, seeking to do for medium-term property rentals what AirBnB has done to transform the market for short-stay rentals for holiday and business travellers.
The company targets international renters moving to new cities and wants to turn apartment rentals into a more secure process for tech-savvy young professionals and students comfortable with online transactions. "Our vision is to replace every real estate agent," said former business student turned Nestpick founder Fabian Dudek, 22. "We believe in automating contracts and helping landlords manage their properties better." Nestpick started out as a student rentals marketplace in Rotterdam, where Dudek set up a similar venture called Effortless Housing when he was a student. It is now run out of Berlin, where Rocket is based, and has about 60 employees.
The company was founded in May and has been active in three Dutch cities: Amsterdam, Rotterdam and Groningen. Rocket Internet said it became Nestpick's majority investor this month. The terms of Rocket's investment in Nestpick were not disclosed.
Rocket has set up ecommerce sites and online marketplaces for everything from taxis to meal deliveries in more than 100 countries. It said last month it expects to launch 10 new companies in 2014 and another 10 start-ups in 2015.
Nestpick handles communications between landlords and tenants and conducts security checks on both. The service is free to landlords.
It promises to undercut finders' fees which property agents collect for acting as middlemen from levels as high as three months rent to 50 percent, or less, of one month's rent.
The service is designed to avert the fast-growing problem of online property rental scams, while giving tenants who are new arrivals in a country a process to establish their identity and financial means with landlords.
Tenants send rental deposits to Nestpick, which transfers them to the landlord once the tenant confirms they have moved in to the property.
Mr Dudek thinks Nestpick can avoid some of the controversy that ride-sharing service Uber has faced from taxi industry rivals and local regulators, in part because it is focused on longer-term, higher-value transactions where verification is essential.