So bad is London’s housing crisis, which sees house prices make homeownership a pipe dream for many, a report by PWC reckoned that by 2025 more than half of under 40 year olds will be living in rental properties.
The answer, of course, is to build more affordable and/or social housing, but that hot political potato is continually kicked into the long grass and, even at its most optimistic, will take a generation to fix. In other words, so-called ‘Generation Rent’ is real and here to stay.
But one societal crisis is another startup’s opportunity, and we’ve already seen a number of companies crop up to serve the rental needs of Londoners and people living in other housing stock-starved cities.
These include consumer-facing apps like Acasa, which wants to make it easy to move from one houseshare to another, B2B services like the recently troubled Goodlord, which is digitising the rental process on behalf of lettings agencies, and a plethora of online estate agents, such as Open Rent, Home Made and Rentify, that help home owners rent out their property.
Another nascent proptech startup targeting ‘Generation Rent’ is London-based Homie, which might best be described as a concierge-style service that promises to save Londoner’s time, hassle and money when going in search of their next rental property. Today the company is disclosing that it has raised a further $4 million in Seed funding in a round led by Connect Ventures, with participation from VentureFriends, Seedcamp, and The Family. It brings total funding raised to date by Homie to $6 million since being founded in 2016.
Claiming to help renters “find, view and agree the homes they want in as little as three days,” the way Homie works is as follows:
You first enter your home search details and then get assigned your own Homie, a ‘personal agent’ that runs your home search and sends you a curated list of properties that matches your needs. That’s about as #Lazyweb as it comes.
Next up you’re asked to choose your favourites via the web-app and book viewings online at your preferred date and time. The Homie then schedules all viewings with multiple agencies into one tour. They then act as the your agent, accompanying you on a cab journey across London to visit your top ten properties, whilst offering “unbiased advice” on the area.
At this point you are probably wondering how all of this is viable from a unit economics point of view. Founder and CEO Alex Eid tells me Homie generates revenue by acting as a broker between renters and real-estate agents. “We make introductory fees from the agents we place the tenants in. Very much like the Deliveroo model,” he says.
Typical Homie customers are said to be students (“first time renters who don’t understand the real estate market, need to organise the logistics to move in with their friends, and need to find a solution that best fits their limited budget”), young professionals who have limited time to go house hunting, and millennial expats who need help figuring out the best place to live and navigating the market for the best value homes.
“Our direct competition are relocation agents, expensive private agents used by corporates to find accommodation for their employees moving from one city to another. An unaffordable option for most people,” says Eid.
“The main competition however is renters doing it themselves. They have no other option but to search multiple property sites and go through the hassle of contacting real estate agencies one by one to book single viewings. Homie is a first of its kind consumer brand for real estate services; provides a complete and tailored home search across the whole market, property scheduling, transportation and guidance”.