Barcelona-based Badi launched a marketplace for urban room rentals in September 2015 with the goal of inducing it easier to detect flatmates. The startup has now closed a $10 million Series A investment, led by Spark Capital, with the aim of ramping up its presence across Europe. Spark’s general partner Alex Finkelstein is the lead here, and joins Badi’s board.
The startup’s room rental platform caters to both sides of the equation: People will a room to rent where they also live, and people looking for a room to rent( and flatmates) in a city. It’s constructed out a major presence in Spain and is also live in a handful of cities in Italy, saying it has circa 700,000 registered users now, and a 10 M “rental requests run rate” in Spain.
“We want to be the platform with the best user experience in the real estate marketplace, ” says CEO and co-founder Carlos Pierre, discussing Badi’s plans for the new sources of funding. “And then expansion — so basically it’s team, product and expansion all over Europe in the next 12 to 18 months.”
“We’ll use these funds to hire the best talent, expand really fast all over Europe, while we gear up our Series b fund round, ” he adds.
London, Paris, Berlin, Amsterdam and Dublin are the target cities that Pierre lists for the expansion scheme. He also says the aim is to grow the team from its current headcount of 36 to around 60 before the end of the year.
“We truly think that every big city is going to have[ accommodation] problems in the course of the year because logistically a city has a lot of problems to grow but to its implementation of demand, Millennials, the new generation, they are flocking to cities because they want to live near the jobs, near the universities. So rental prices are increasing … Demand is outstripping render, ” he says.
Badi constructed its platform with the aim of interrupting the older classifies approach to room rentals, where people list rooms to rent and then have to do lots of manual legwork fielding all the calls and emails their advert receives.
They also want to offer an alternative to agencies that sit between landowners and room renters — by stripping away that middleman layer and replacing it with their own tech-enabled recommendation platform.
“Millennials want the best user experience and the best design you can offer, ” he argues, explaining the positioning of Badi vs other players in the market, and name-checking the likes of Easyroommate and SpareRoom as challengers in the UK.
There are also newer platforms, such as the student accommodation focused Uniplaces. But Pierre argues Badi differentiates against bureaux by allowing potential flatmates to match and connect( message) beforehand — giving them the opportunity to figure out whether they want to go ahead with a flatshare themselves. “Everyone, even landlords and renters, they want to make an interview, ” he adds.
Badi is utilizing machine learning to help with its flatmate matching process, draw lessons from users of its platform as they match and agree to become flatmates, and feeding that intel back into its algorithm to continue improving recommendations.
At sign up, users are asked to create a profile — stating where they are from, their age, their status( profession or student ), and which languages they speak. They are also asked to describe themselves “with six or seven main characteristics”.
Pierre claims the sign on process takes as little as a minute to complete, and can be done on mobile( Badi has Android and iOS apps as well as a web platform ). He also says the vast majority (~ 85 per cent) of Badi users sign up utilizing either their Facebook or a Google profile, so it’s able to use their social media data to help power its recommendations.
He says an overhauled version of the recommendation system is in the works — which will place even more weight on tech giants’ social graph, as well as holding core matching factors such as people’s locating and age.
If you are from Barcelona and you want to work in Dublin at Facebook you will be able just to search flats filled with people who are working at Facebook .
“It’s based on Facebook first, second and third connections so if you open a map and you search flats in Barcelona you will be able to press a button and just see the flats filled with people that you have friends in common with on Facebook, ” he tells TechCrunch. “And the same with LinkedIn. If you are from Barcelona and you want to work in Dublin at Facebook you are eligible only to search flats filled with people who are working at Facebook.”
On the user experience front, Pierre says some of the new sources of funding will go towards bolting additional features onto the platform. Such as — one recent addition — an escrow pay service.
A calendar for booking room views and a reviews system is in conformity with the works, slated for launching within two months, according to Pierre.
The escrow system is intended to offer added reassurance to people matching and messaging with potential flatmates that it’s okay to hand over a few months’ rent in advance via the platform.( To be clear: Badi is not offering vacation rentals so typical room rentals can last 12 months .)
The startup confirms users via their social media profiles but Pierre notes the committee is also lets people choose to offer a more fully confirmed profile — by adding and verifying a mobile number and by uploading identification documents, akin to Airbnb’s system.
He confirms it’s not currently taking any committee on flat bookings built via its platform at this stage. The focus is on expansion and on honing the user experience, he says. But the goals and objectives is to monetize in the future by offering additional paid features.
“Right now we are connecting profiles but we will launch in the next[ few] months new features — so for example a calendar to scale to scale flat visits, a review system for the listings … We will add insurance, ” he says. “It’s going to be optional.
“We will take a fee eventually in the escrow system — and eventually we want that all the monthly pays are transferred through our platform.”
The wider vision stretchings beyond only room rentals — with Pierre seeing being able to add the ability to rent entire flats via the platform, i.e. without the need for agency intermediaries. Indeed, he says the goal is to “eradicate agencies”.
“We think it induces no sense that in the real estate market there are so many intermediaries and you have to pay committee, ” he says. “It only adds friction … to the process. So eventually we want to eradicate bureaux. We truly is considered that has no sense.”
He even indicates the platform could eventually become a place for buying and selling homes too. “We want to create the best user experience and then offer self-service answers even to landlords where you have all the contracts, where you can manage all the payments without mediators, without committees. That’s our long term scheme, ” he says.
What about Airbnb? Couldn’t that platform giant expand its vacation rentals platform to move in on this space? Pierre reckons Badi has a window of opportunity before needing to worry about any risk of that — mentioning a meeting he had with Airbnb co-founder Brian Chesky last year which left him with the impression that the company isn’t very interested in moving in on this province for some while. So the aim for Badi is to be “like the Airbnb but for non-vacational rentals” in the meanwhile, he says.
“Airbnb is doing vacational for now. We focus on non-vacational. And we think that non-vacational is a huge market, ” he adds. “It’s a market that’s quite obsolete. And we have insured with Airbnb they are focusing only on travelling … Eventually you will be able to buy airliner tickets on the platform … They want to focus on vacational at the least in the next four years.”
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