Interviews, TECHNOLOGY

Giorgio Tinacci: Technology can simplify real estate transactions

Giorgio Tinacci graduated in International Management at Bocconi and Honk Kong University of Science and Technology in 2015. He joined BCG where he worked for 2 years with a focus on digital transformation projects in banking, insurance, and industrial goods. Giorgio left BCG in September 2017 and founded Casavo, the leading Instant Buyer in Europe.

— How did Casavo come to be? Under what circumstances did the startup arise in 2017?

— I’ve always had passion for real estate and since my very first experiences I had the dream to create something my own. I liked the idea of building a business model with a great impact, able to innovate a strongly traditional environment, redesigning its borders. Casavo simplifies the process of selling a home, allowing consumers to avoid the hassles and uncertainties associated with the different phases of the traditional transaction. Casavo achieves this by stepping in as a direct buyer and submitting an “instant offer” to buy the home in a matter of days. Casavo’s launch was really focused on the validation of our business model. We focused on testing our services, closing our first operations with both consumers and real estate agencies, our main partners. At the same time, we started laying the technological foundation of the company (the evaluation algorithm, the website, the data platform, and so on) trying to position ourselves as distinctive from the very start.

How have you attracted users and grown your company from the start? What problems did the startup face in the beginning?

— The first problem we had to face was to make our business model clear to our potential customers. In Italy, the iBuyer business model didn’t exist and people were not familiar with it. It happened often that people didn’t understand it fully and thought we simply were a digital broker. Moreover, our target of sellers involves also people not familiar with technology, and this at the beginning made them not comfortable relying on a digital platform.

— The business model “instant buyer” has many benefits. Are there any disadvantages?

— Our biggest disadvantage isn’t related directly to our business model: we are innovative and revolutionary in the real estate market and that becomes a problem when talking with people who are not familiar with the iBuyer model. Nobody ever heard in Italy or in Spain that a company directly buys and sells properties from and to private and so fast as us, so especially in the beginning people had trouble understanding our activity.

— How is Casavo different from competitors — for example Offerpad or Opendoor?

— Obviously, the first difference is the area where we operate: we are the largest platform in Europe and the first one ever in Italy. Offerpad and Opendoor operate in the USA, thus our reference markets are really different. The Italian and Spanish real estate market is one of the most complex and one of the less liquid ones: we need to calibrate our operative model based on this.Our focus is on technology and we always study new ways to exploit new digital tools in the real estate market. Another great difference between us and other real estate digital services is that we have an inclusive business model that sees brokers as key partners. Indeed, we also have a digital platform dedicated to brokers, “Doris”, where they can upload listings for free and also receive an offer directly from Casavo to buy the house. As of today, we activated more than 2,500 partnerships with real estate brokers in the markets where we operate.

— How much has Casavo raised since its establishment in 2017?

— Casavo has raised more than €100M with both equity and debt. Since the very beginning, we had the support of various investors. Picus Capital, a company specialized in long-term investment in digital startups, seated in Munich, was the first one who believed in us, but soon was followed by 360 Capital Partners, one of the most important venture capital italian funds.

Then, after only 17 months since Casavo’s establishment, we raised 7M€ with a capital increase led by Project A Ventures. The Series B funding round was led by Greenoaks, a San Francisco-based private investment firm.

— What is your company’s share in the real estate market in Italy?

— So far, the Instant Buyer model has been a metropolitan one — markets are represented by active cities rather than the whole country. With regards to Italy, we are present in 6 cities: Milan, Rome, Florence, Turin, Bologna and Verona. These 6 cities, considering only the municipal area, account for ca. 15% of the total Italian residential transactions. Especially in our first markets, we have reached monthly market hare peaks in the order of 2–3% showing effective penetration but at the same time signaling we still have a gigantic growth potential.

— How many real estate acquisitions have you closed in Italy since foundation?

— We closed more than 1,200 real estate transactions in Italy since our foundation, worth over 350M€.

— You announced your entry into the Spanish real estate market. How has the Spanish market received you? What success have you achieved there?

We entered the Spanish real estate market at the beginning of 2020, starting our expansion in Southern Europe. We started with Madrid representing one of the largest metropolitan markets in Europe (more than 40K+ yearly residential transactions), but we are looking forward to soon in other Spanish cities as well. Last year we have validated our business model performing more 35 transactions, and we are now ready to scale 4-5X our operations in 2021.Our final goal is to spread all over Europe and offer to European citizens a new, frictionless way to sell, live and buy a house.

— How has the coronavirus impacted the company? How did you adapt to new realities?

Being a fast-growth tech company, we managed to easily adapt to the sudden change caused by Covid-19 and were able to react well even during the most acute stage of the epidemic. For example, since the beginning of lockdown, we speeded things up for the development of our tech products, which have been even more improved through the acquisition of (the leading provider of virtual tour technology in Italy and Spain). Moreover, our Mobile App CasavoVisite allowed our clients to visit the properties on sale from a safe distance with a video call. Due to our ability to react to change, we managed to achieve a triple-digit growth in 2020 while continuing disrupting the market launching new distinctive products and services. As for the future on the market, we like to keep a positive outlook. Our market is buzzing and ever-changing and we think that technology can speed things up and actively contribute to the simplification of real estate transactions.

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