Quick Pitch – SpotAHome is an online mid-term rental platform where tenants can rent rooms in European cities from abroad without having to view the room. SpotAHome’s main innovation to date is video viewing of the flat/room.
How does SpotAHome make money?
When a tenant makes the booking, SpotAHome takes a one-time service fee that is calculated algorithmically based on the length of the stay.
SpotAHome bears the ‘publishing cost‘ of the ad, including:
- professional photos
- upload floorplan
- video of the flat
- live listing
The company charges a Booking Fee between 6-9% of the Total Contract Value (TCV), which is capped at £445 (~€500).
To put it in context, the company has secured about $200mn in total contract value (TCV) to date across Europe after about 5 years in operations (ie. $12-$18mn in revenue).
Community-Centric or Commercial-Partner Strategy?
SpotAHome operates in the rental market, with the majority of bookings for mid-term stays (minimum stay on most properties is 30 days). It appears that their strategy is to move progressively towards long-term stays in order to challenge the agents.
The company operates more of a commercial-partner strategy when you compare their model to many co-living companies, for example, who build their model around community.
The key value proposition of SpotAHome is a transparent and simple booking system, which is ideal for people booking a room from abroad. Especially compared to the real-estate agents in most major markets. In fact, you are NOT able to do in-person viewings on SpotAHome.
This company is following a path that is similar to Uber, which is why it is no coincidence that Uber founder Travis Kalanick is one of the company’s investors. The company has recently relocated its head office to London, poached major talent from Uber and Amazon (COO Cleo Sham from Uber & CTO Angel Azcarraga from Amazon), and is planning to hire hundreds of more people in London, all with backing from major Silicon-Valley VCs.
If the company wants to Uberize the rental market then they will probably continue to expand their influence via commercial partnerships that can speed up distribution (marketing), supply chain (hundreds of HomeCheckers) and other core elements of their business model
Fundraising and Valuation:
Raised to Date: $64mn
In the summer of 2018, the company raised $40mn from Silicon-Valley VC Kleiner Perkins and a syndicate of other prominent investors.
This would put the company’s valuation, at that time, near $200mn on revenue of probably ~5-$10mn (based on estimates above from disclosed numbers of $200mn in TCV flowing through the platform since inception). No actual revenue data is available for SpotAHome, as it is a private company.
SpotAHome BM Canvas
A business model is defined as:
Alex Osterwalder et al invented the Business Model Canvas to help individuals and organizations conceptualize how to analyze, create, and develop business models.
Online Rental Platform for Mid to Long-Term Stays
- ‘Safely book your new home abroad’
- Videos, floorplan, pro photos and in-person verification of every flat
- No need to view the flat, book online from another city or location