Rocket Internet-Backed Nestpick Raises $11M To Move Entire Rental Process Online
For years you’ve been able to find a room to rent online via classified sites such as Craigslist or more vertical offerings. But once you’ve found your prospective rental, the process quickly moves off-line. Nestpick — backed, though not founded, by Rocket Internet — wants to change this.
The Berlin-based startup is aiming to ‘digitise’ the entire rental process, including eliminating the need for in-person viewings. And to aid that mission, the company it’s raised $11 million in Series A funding. Investors is this round include Mangrove Capital Partners, Enern and, of course, Rocket Internet.
Nestpick says the new capital will be used to create a better experience for the landlords and tenants that used the site, which since launch has broadened its target market from international students and expats to just about anybody looking for a rental. It now counts local tenants as making up over 30 per cent of its customer base.
“Our typical customer books accommodation with us for 7 months and treats Nestpick as his preferred way of moving from then on because it’s convenient, and at least four times cheaper,” Nestpick founder Fabian Dudek tells TechCrunch. “Tenants can book with us and receive confirmation in less than 48 hours with one click instead of hundreds of e-mails, calls, and scheduling conflicts.”
In addition, Dudek says the startup is attracting landlords who are already renting to tenants for between three months and three years via classifieds, but know that the process could be made more efficient.
“Landlords are tired of spending 20-40 hours each time they rent out their properties despite receiving so many enquiries, and they hate losing months of rent from the transition between tenants,” he says.
“Our challenge is to seamlessly connect these two worlds – the old fashioned real estate market made up of landlords who are uncertain about new technology and the current generation of tenants that are all mobile-first, and use apps like Instagram, Tinder, and Spotify every day.”
Fraud is another problem Nestpick is aiming to solve. Dudek claims that 1 out of 3 home seekers encounter a scammer online and that renters typically contact an average of 15 agents or 50 landlords on multiple platforms in order to secure a single viewing.
“Instead of that process, imagine walking through a new neighborhood that you love in any country, and being able to book your next home straight from your phone entirely online,” he says.
That imaginative leap may still be a stretch too far for some — given landlord horror stories, would you really want to rent a room without seeing it in person first? — but early Nestpick data suggests the timing is right. True to Rocket Internet form, the site is already active in 35 cities across eight European countries and recently launched in Australia. The company says it has listed more than 21,000 homes and transacted over €16 million in rental income for landlords in the last year.
Meanwhile, the startup’s business model entails charging a fee to the tenant for every transaction that is finalised via the Nestpick site. “We only profit from solving the problem, and that helps us focus on the important things – the experience of renting and letting your home and the relationship between tenants and landlords where both benefit,” says Dudek.
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