Spotahome contract value reaches €25 million
28 Oct 2016
Spanish real estate site Spotahome.com is enjoying a good October. Earlier in the month it collected the award for Best Start-up at #SouthSummit in Madrid, beating 99 competitors in the category. Now it announced that its transactions have hit the €25-million mark ($27 million U.S.) from a portfolio of 25,000 properties.
Co-founder and CEO Alejandro Artacho explained the company’s revenue structure in an interview with Spanish news site Sabemos.es. Spotahome takes a three- to six-percent commission of the total value of the rental contract (monthly price x duration in months). The average commission is €100, which is significantly lower than the fees charged by traditional real estate agencies, and Spotahome takes an additional small fee. Artacho offered an example: A €400/month room, rented for five months, would have a total commission of €140 plus IVA (value added tax of 21 percent). The total of €170 is still lower than half the standard Spanish real estate agency fee on a rent of a one-month contract.
Artacho also told Sabemos, “many investors” had been in contact with Spotahome following their #SouthSummit award, wanting to know about possible future financing rounds.
In an interview at #SouthSummit, Artacho said Spotahome’s ambition is to be the largest online, real estate company in the world in three to five years. “We’re going after the whole real estate industry,” he said. “It’s a broken industry, dominated by traditional classified sites, and real estate agents. Someone needs to bring a lot more technology into that. That’s where we see ourselves.”
Its immediate expansion plan is to almost double its presence in Spain. Currently in Barcelona, Madrid, Valencia, Granada and Seville, it plans to add Salamanca, Bilbao, Santiago de Compostela and Malaga.
Though Artacho acknowledged the competition from bricks-and-mortar real estate agents with large property portfolios and years of experience, his opinion was that consumers will inevitably change their behavior. Once people have used a digital platform to rent, they will not go back to analog, he said.