Why we invested in Casavo

We are proud to announce our Series A investment in Casavo, the perfect addition to our PropTech portfolio

By Enrico Mellis

Real estate is the most valuable asset most people will own in their lifetime. Buying and selling a home is one of the most stressful experiences people go through. The largest asset class in the world is also one of the most illiquid and opaque. In Italy, finding a buyer takes almost 8 months on average and involves a myriad of separate processes and multilateral correspondence with various stakeholders, including legal and financial arrangements.

At Project A, we embrace solving large problems with customer-centric solutions. In our continuous efforts to find the most transformational business models across Europe, we set out on a hunt for extraordinary founders transforming private real estate transactions. Ultimately, we found Casavo.

The team behind Casavo believes in a simplified transaction experience. Casavo’s automated valuation engine provides potential sellers with the fair value of their property — and a purchase offer. Upon acceptance of the offer, Casavo arranges a free inspection of the property and the seller receives the full cash payment in a matter of days. The property is then renovated and sold to the next owner directly by Casavo. A clear and transparent process which fosters customer confidence and peace of mind.

For sellers, they eliminate the hassle and uncertainty of valuation, renovation, viewings and months of waiting to finally find a buyer.

An outstanding team

When we first met Giorgio Tinacci, we saw a young and very ambitious first-time founder. In the subsequent conversations, we quickly realised that we had discovered a one-of-a-kind entrepreneur who impressed us with the clarity of his vision of the private real estate market and the role Casavo is going to play in it. With a relentless focus on execution excellence and value creation for the customer, Giorgio and his outstanding team have built a strong technological platform and demonstrated remarkable traction in their first year of operations.

Giorgio Tinacci, CEO of Casavo

A market ripe for change

The idea behind the “iBuyer model” itself is nothing new. For decades, “house-flippers” have offered immediate cash payments to distressed sellers. They demand a heavy discount on the fair market value, often in excess of 30% and capitalise on a seller’s difficult circumstances. Now, with the ample supply of housing data and the resulting increase in valuation accuracy, this model has become attractive for the mass market.

In the US, Opendoor raised more than $1bn in funding from investors such as Softbank’s Vision Fund and Andreessen Horowitz and is now selling in excess of 2,000 homes each month. Similar models such as Knock are also raising large funding rounds and incumbents like Zillow are adapting swiftly. Across Europe, we see a few interesting developments with various startups launching variations of the iBuyer model in different countries.

While screening opportunities, we carefully analysed the different European markets. Italy is perfectly suited as a home base for Casavo before expanding across Southern Europe. We looked for a large market with high private home ownership rates, low liquidity, and stable real estate prices with less inflationary tendencies and lower cyclicality.

A strong value proposition driven by execution

Core to the scalability of Casavo and the root of their healthy unit economics is their property valuation engine, i.e. their ability to accurately determine the fair market price instantly. The ability to accurately determine property values also stems from an in-depth understanding of a highly heterogeneous asset class and complex local market demands.

To increase the quality of their offerings, Casavo rigorously focuses on keeping high quality standards in the renovation process. Working only with the most reliable contractors, Casavo renovates every property they buy to match the expectations of their customers.

Understanding the local market also means respecting local market players. In Italy, the real estate broker community is much less consolidated than in other countries. These brokers are often small family businesses or sole proprietors. Casavo does not regard them as competitors but value their extensive hyperlocal market knowledge and expertise. This is why Casavo deliberately chose to collaborate with brokers, enabling them to generate both seller and buyer leads for properties and capitalise on the speed of transaction enabled by Casavo — a win-win agreement which fortifies Casavo’s strategic positioning and strengthened our conviction to invest.

The real estate market will be fundamentally transformed

Casavo is the perfect addition to our existing PropTech portfolio alongside Homeday, the leading German digital broker. Similar to Casavo, they focus on reducing the hassle of selling and buying homes and increasing transparency in a historically opaque industry.

Joining our friends at Picus Capital and 360 Capital Partners among others, we here at Project A are proud to announce our Series A investment into Casavo. We are happy to support this young and exceptionally ambitious team of superstars eager to change private real estate transactions for the better.

Benvenuti in famiglia, Casavo!