Hambro Perks


Italian proptech Casavo raises €400m Series D to expand into France

Property tech – or protech – might not immediately sound like the glitziest corner of fintech. But talk about buying a freshly renovated property in southern Europe and things immediately sound more appealing.

Milan-based Casavo just raised €300m in debt, in a Series D funding round to provide just that, and it’s already plotting an extension in the coming months.

What does Casavo do?

Casavo is a proptech with a rather unusual model: it offers free appraisals for property owners looking to sell, then generates an offer within two days, buying the property and renovating it to sell on at a profit. Casavo is gaining traction in Italy and Spain, where there are large pools of properties that haven’t changed hands often and require refurbishment.

The company operations on a ‘dynamic pricing model’, using the tech it’s built to evaluate the financial profile of each home, how much upside renovating each home will generate and the amount of data it has on similar homes in similar areas.

It says it charges lower fees than a normal brokerage, up to a maximum of 8% commission on each transaction.

Casavo has seen accelerated growth in the last couple of years. Founder and CEO Giorgio Tinacci tells Sifted the company grew its user base threefold in 2021, and expects ‘triple-digit growth’ in 2022. So far it’s executed €1bn worth of transactions and Tinacci says it has “very high market share” when it comes to real estate in Italian cities like Milan, Rome and Florence.

Tinacci also tells Sifted the latest funding round takes its valuation to “roughly double” what it stood at at its last round in November. According to Dealroom, it stood at 250m then, so we can estimate this to be around €500m.

Who’s investing in Casavo?

  • Dutch holding company Exor NV led the round.
  • New investors included Hambro Perks, Neva SGR (the venture arm of the Intesa Sanpaolo Group), Fuse Ventures Partners and Endeavour Catalyst.
  • All major existing investors including Greenoaks, Project A Ventures, 360 Capital, P101 SGR, Picus Capital and Bonsai Partners participated in the round.
  • Angel investor Sebastien de Lafond (founder of MeilleursAgents).

What’s the proptech market like?

Real estate has been a slow industry to digitalise, which means there are niche areas that proptechs have been cropping up to serve. As we wrote earlier this year, rising interest rates and inflation has been good news for property investment-focused startups, as capital looks for an asset class with returns to keep up with higher prices. This means increased demand for the advanced data and analytics for deal-making, valuations and portfolio tracking that proptechs like Casavo provide.

As Tinacci tells Sifted, Casavo’s large market share in its first two southern European markets – Italy and Spain – is partly due to the fact that properties tend to stay in families longer than in places like the UK. “More than 80% of residential stock is owned by families in Italy” Tinacci says.

What’s next for Casavo?

Casavo plans to use this fresh funding to go deeper in its current markets Italy and Spain, and to expand into France.

Tinacci tells Sifted the plan is to launch in Paris first, due to its high real estate density and transaction rate, so that Casavo can work out its product-market fit in France before expanding into other cities.

The company also plans to invest in new product development in its current markets.

Casavo plans on adding another 200 people to its 400-strong team in the next 12 to 19 months, across its new markets and its product and tech teams in existing markets.

Long-term, Tinacci says the plan is to focus more on product expansion than aggressively expanding into new markets. Casavo is already a regulated mortgage broker in Italy, so customers can sort their mortgage application process end-to-end through its platform. Its products like these he’s planning to continue developing across Italy, Spain and France.

Sifted’s take

Casavo has a truly unique business model that we’ve not seen across other proptechs in Europe so far. It’s clearly found a strong products-market fit in Italy and Spain – the question will be whether the same approach works in France, or whether the company will take longer to achieve significant market share in this market. The other question is how Casavo will fare if there is an economic downturn. Europeans are feeling their wallets tighten right now and might sit tight in their properties instead of looking to buy if we head into a full-blown recession.

Link to original article here.