Inspired by travel #15: Spotahome
How living in China and later working across Lisbon and London inspired Alejandro Artacho to simplify property rental for the online, digital age...
Founders: Alejandro Artacho, Bryan McEire, Bruno Bianchi and Hugo Monteiro
Started in: Launched in London in December 2015
Following the same model as websites which help vacationers find brief holiday rentals, Spotahome’s no-fuss process helps people to easily find places to live online, for periods of 30 days or longer.
Having struggled to find accommodation while living in China and then being confronted with the laborious, complicated rental process while working in real estate across Europe, co-founder and CEO Alejandro Artacho felt that the rental industry needed to move with the times.
By providing professional photographs, HD videos and detailed descriptions of each property and its surrounding area, Spotahome says it has eliminated the need for in-person visits and meetings, taking the entire rental process online.
This has clearly resonated with tenants, as the company now operates in 20 cities, hosts over 40,000 properties and has more than 600,000 unique users a month.
But how exactly did travel inspire this disruptive business? Read on for Artacho’s story…
Where were you when you had your business idea?
The business idea was born from a combination of experiences. I lived in China for three years where I founded two start-up businesses, an export business and a travel agency. During my stay there, I recognised how difficult it was to find accommodation, what with the language barriers, not understanding how things worked, and on top of this, the time spent searching before I found a place.
Later, I returned to Europe and worked both in London and Lisbon in the real estate sector.
It was the realisation of how much time, effort, money went into the rental process, and overall how manual each step of it was, that led to the idea that if people could book holiday accommodation online without the need to physically visit the property, why couldn’t they book in a similar way for longer periods of time, such as a few months or years? From here, Spotahome was born.
Why were you so inspired?
I’ve always imagined a world where international mobility is easy. One of the first start-ups I founded in China was focused on international job mobility. I saw Spotahome as a chance to disrupt an industry that has been doing things the hard way for too long.
Were you actively looking for a start-up idea or did it just seem too good to pass up?
For me, I see many industries that are in need of change and someone has to drive that. With the idea of Spotahome, it just made sense. It’s about wanting to change the status quo.
How easy was it to start the business?
Once we had our team together – Bryan McEire on the tech side, Bruno Bianchi in operations and Hugo Monteiro on the IT engineering side – it came together easily.
We focused first on the supply of properties, using our networks to build the listings and growing our library of housing videos before we finally launched the site. We are all very hands-on and took on the work ourselves. Once the bookings started to come in, the people around us quickly gained confidence in the concept.
What research did you have to carry out to learn more about the sector and the market opportunity?
I’d come from the real estate sector which meant I had a good understanding of the industry that I was able to bring to the table from the beginning. When we started out it was about understanding where the sweet spot was and who would benefit the most from the Spotahome platform.
We then identified different segments and started out with international students at universities and business schools and the new cohort of IE Business School students. From there it was a series of learning that helped us refine and develop further.
Then we identified the highest-potential rental cities across Europe, and are now progressively opening new cities based on the size of the opportunity.
How did you replicate what you’d seen overseas or use your experience there? Did you modify the idea for the UK market?
Even within a city, it is sometimes difficult to move between different areas. In Shanghai, I wanted to experience what it was like to live in different neighbourhoods around the city, and I did just that – I lived in four different areas, each one distinct from the other and each giving me a new perspective on life there.
Each time I moved, it was the same struggle of searching, visiting and making phone calls. With digital, I knew there had to be a better way.
We first launched in Madrid, which has a busy rental market – 22.5% of primary homes in Spain are rented – and these figures are similar to the UK where 21% of households are in private rented accommodation. As the rentals market is similar in the UK to how it is in Spain. The main area to focus on was to understand the laws and make sure we were operating within this.
How much did you invest in getting started?
We started out with just €3,000 – all four founders invested our savings in the business. We kept our expenses low and spent whatever we had on photographers to build our listings. Eventually friends and family realised the potential of the business and invested €125,000 before we secured our initial rounds of venture capital investment.
How quickly after starting did you experience what you’d describe as ‘success’?
Within two hours of opening the site, we took our first booking from a Japanese guy for a property in Madrid. What was even more exciting was that the user was already in Madrid – he had the opportunity to visit properties if he needed to – but he opted to book online.
This confirmed to me that the formula was right, and so long as we could provide the materials to replicate the experience of visiting the property in person and build the trust in our model, the business had huge potential.
Where did you go for business advice?
Our investors have given us invaluable direction in our business. Passion Capital and Seaya Ventures have been on board from the early days and have given us invaluable input into the business.
One of our Seed Investors, Howzat Partners, were also early investors in Trivago, and Arthur Kosten from our recent Series A round is a co-founder of Booking.com; so both of these investors have been able to give us really specific advice on the business, although all of our investors contribute in some way.
What advice would you give to others who travel looking for start-up ideas?
I’d tell them that ideas are everywhere, and by starting out as a traveller you already have a broader perspective on the world – you can recognise the differences between where you come from and the places you discover along the way.
It can be as simple as replicating an idea that is missing in one of the places you visit from your own country or vice versa, but the real innovation comes when you recognise a universal problem and find a way to address that on a larger scale.
I’d also tell them they have to be prepared to work hard and put everything into their project – it takes perseverance, confidence, optimism and determination to make it happen, and you quickly prioritise what’s important to give it your all.
What are your future plans?
Right now it’s about increasing our scalability in operations. The Homechecker is key to the value proposition of our business, where we personally check the properties and this requires us to have a network of top people to make it happen.
We opened three new cities in Italy over the past two months, bringing our total to 19 cities across Europe and UAE, and in the future we plan to keep this momentum. To achieve this goal, we’re going to need the right people on board, such as engineers and product developers, and hiring these people is the second part of the challenge for the coming months.