‘Tinder for property’ start-up PropHero raises $8m against market odds

A start-up dubbed the ‘Tinder for property’ has raised capital more than five times its pre-seed amount in February.

PropHero's Pablo Gil Brusola and Mickael Roger. Picture: Supplied

A proptech start-up dubbed the ‘Tinder for property’ has raised its second capital round this year, defying the market malaise to secure a funding amount more than five times its pre-seed raise in February.

But the raise in the current economic conditions wasn’t without difficulty, and PropHero co-founder Pablo Gil Brusola admits it would not have been possible without the help of overseas capital.

The latest round, which was oversubscribed, took several months before PropHero closed $8m co-led by US proptech venture capital fund Fifth Wall and European fund Samaipata. About $1.6m came from local venture capital firms AfterWork Ventures and Jelix Ventures, who had each participated in the seed round earlier this year.

“It was a crazy round,” Mr Brusola said.

In March, he said PropHero was approached by several Australian venture capital firms, one of which said it would provide $10m in funding at a $50m valuation.

“Mikael and I looked at each other and said, ‘this can’t be real’. We could see the crisis coming,” Mr Brusola said. “In April, this VC fund pulled out and they gave the excuse that the real estate market is not big enough.”

Mr Brusola said he and co-founder Mikael Roger began their own raise and that global capital did a lot of the heavy lifting.

“We opened a lot of doors and pulled on all of our network and then we went globally, which was great, because it gave us more options,” Mr Brusola said.

“(Locally) there’s just a more conservative mentality. It’s not only in Australia, many other countries have their concerns. We were lucky that the US VCs and some European VCs were (willing to take the risk). Some were even asking us why we didn’t raise more but there’s a limit to what we can value the company at this stage.”

The new capital will be deployed across three areas of the business to improve its data models, to consolidate its business in Spain and Australia and lastly into its global expansion plans.

Since March, PropHero has bought property for a further 170 clients, more than seven times the number of properties it sold in its first seven months.

Mr Brusola said PropHero’s main goal was to digitally replicate the role of a buyer’s agent.

“Our ambition is to revolutionise the property investment industry globally by using digital technology to replace traditional buyer’s agents and make property investment more time-efficient and profitable,” he said.

“Soon, you will be able to access all the services you need as an investor directly from our apps, such as property discovery, mortgage financing, insurance, property management and tax information.”

Since February, the return rate of customers is up three times at 60 per cent and about 80 per cent of new customers were referred by friends or family, co-chief executive Mr Roger said. Investors had achieved positive cash flow and price growth, he said.

“In fact, PropHero’s clients are outperforming the market by 1.7x for rental yield and 2.6x for capital gains. This shows you can use data to beat the downturn,” he said.

Earlier this year the start-up nabbed the nabbed two proptech awards for Start-up of the Year and Most Innovative Start-up – Consumer.

Originally published as ‘Tinder for property’ start-up PropHero raises $8m against market odds