Rental property site raises US$40m for expansion

London

RENTAL property listing service Spotahome has raised US$40 million in a funding round led by Silicon Valley-based Kleiner Perkins Caufield & Byers.

The company, which lets people rent homes the way they book hotel rooms, provides floorplans, photographs and extensive videos of the properties it lists, and also gives landlords software that helps streamline management of multiple premises.

"Real estate was one of the first industries that came online," said Mood Rowghani, a Kleiner Perkins general partner, "but it has been slow to innovate".

He said the main competition for rental listings were either real estate agents' websites, which don't provide landlords with the sort of property management software Spotahome is offering, or simple text-based online sites such as Craigslist, which have dated interfaces.

But Mr Rowghani said Europe's rental property market was worth an estimated US$500 billion annually, with about a third of people leasing their homes, so the business opportunity was attractive.

Alejandro Artacho, the company's co-founder and chief executive officer, said in an interview that Spotahome would use the money to accelerate its expansion and make key executive-level hires in areas such as marketing and product development.

He will also consider M&A opportunities. Earlier this year, Spotahome purchased an online community site for students studying abroad on the European Union's Erasmus programme.

Founded in 2014, Spotahome has about 50,000 properties listed in 33 European cities, including London, Berlin, Barcelona and Rome.

The company charges a percentage of the total contract value for the rental, split evenly between tenant and landlord. The average fee is less than 9 per cent, Mr Artacho said.

In addition to Kleiner Perkins, existing investors that participated in the latest funding round include London-based Passion Capital and Madrid-based Seaya Ventures. To date, Spotahome has raised about US$64 million in venture capital.

The company said it employs 300 people, plus an additional 120 "home checkers" who work on a freelance basis to vet rental properties and create videos for the website. BLOOMBERG