Anticipating reduced demand for residential property this year and next as a result of rising Eurozone interest rates, Milan-based IBuying company Casavo is to layoff 30% of its workforce. 

In an open letter to employees published on the company’s website, founder and CEO George Tinacci (LinkedIn profile) wrote “Residential markets are expected to go through a down cycle due to the rise of interest rates and the broader inflationary context.” 

“Despite being relatively insulated so far in our markets, we cannot exclude the possibility of reduced volumes, longer sales cycles and potentially decreasing prices. Therefore, we have to be very conservative when it comes to our business performance outlook.”

“Equity capital markets for high-growth tech companies are in a ‘reset’ phase: Valuations have dramatically dropped, and investors are extremely cautious when it comes to deploying capital in this asset class.” 

“As a consequence, it would be irresponsible to rely on additional external funding in the near term. This implies a need to reach financial self-sustainability as soon as possible, and luckily we are in a solid position thanks to our recent Series D equity round.” 

As a result, “… we will need to reduce our team by around 30%.” 

Furthermore, Tinacci outlines three strategic shifts: 

“Firstly, we will downsize our IBuying business, keeping it only as a ‘profitable wedge.’ It will remain at the heart of our product offer as a differentiating proposition to attract sellers, but given the market volatility, there will be less strategic effort to expand it.” 

“Secondly, we will re-focus our efforts and resources into core markets. We will suspend business generation in selected markets which are still unprofitable or at low scale, while we will invest more in those with high brand awareness …” 

“Thirdly, we will shift from a ‘growth’ framework to a ‘profitability’ framework. While we have always had a clear break-even timeline, the market environment forces us to take more drastic actions when it comes to active cost management.”

Apart from its native Italy, Casavo is also present in Spain, Portugal and, since October 2022, France.

In July 2022, the company raised €100 million ($114 million U.S.) in Series D funding, in addition to €300 million in debt funding.

In December 2022, Italy-based bank UniCredit invested €10 million in Casavo as part of a long-term strategic partnership agreement. This will see UniCredit provide its customers with new services developed in collaboration with the IBuying company. Moreover, Casavo will work with UniCredit Subito Casa, the bank’s real estate brokerage. 

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