Spotahome, a Madrid-based startup that lets you view and book mid to long-term accommodation online, has made its first acquisition after raising €13.6 million in Series A funding late last year.
The ‘proptech’ company has acquired international student community Erasmusu, a move that will see Spotahome add up to 70,000+ more properties to its rental inventory and gain access to what co-founder and CEO Alejandro Artacho tells me is “the largest network of Erasmus students in Europe”.
Terms of the deal remain undisclosed, though I understand the purchase price is “several million” Euros (update: one source pegs it at €2 million, while another with knowledge of the deal says it was up to €6 million) and was a mixture of cash and stock. Notably, Erasmusu, which was started by its founders as a side project eight years ago before becoming a leader in the space, hadn’t raised VC backing and has been largely bootstrapped. In that sense, it remained ripe for the picking.
Erasmusu currently claims 2 million visits per month (of which I’m told 80 percent is organic), is growing 2.5x year over year, and has half a million active students who are looking for homes and, crucially, writing content for the site. It’s this community building aspect, in addition to Erasmusu’s lean startup achievements, that Artacho says Spotahome can learn from. In many aspects, the two startups were competitors, too.
Spotahome aims to solve the problem of how to find mid to long-term accommodation online, including negating in-person viewing for the tenant. Key to this is the startup’s insistence that all accommodation is vetted in-person by members of the Spotahome team. These “Home checkers” visit every property to create accompanying audio-visual material and to verify the listing.
And whilst Erasmusu started out focused on building an online community for Erasmus students, covering various aspects of international student life, it quickly found that finding accommodation was one of its most active topics. This led the Spanish company to add classified ads for rentals, before evolving into a transactional model in 2015 — pitting it against other rental marketplaces, including the much younger Spotahome.
Now that the acquisition has closed, Spotahome has already begun to power the rentals aspect of Erasmusu, although the two sites and teams will remain independent. This is seeing Spotahome undergo the quite labour intensive process of creating audio-visual material (or what might be called virtual tours) for all of the accommodation listed on Erasmusu. In other words, bringing the Spotahome experience of finding a place to live to Erasmus students.
In return, Spotahome supercharges not only its inventory of properties, but also the countries and cities it is now active in. The newly-formed Spotahome Group — which points to more acquisitions in the not-so-distant future — now offers more than 115,000 flats, houses, rooms and student residences in 450 cities across 65 countries. Artacho says the startup also has a much broader user base now with 0.5m active users and 3m visits per month, whilst the new combined entity employs over 235 staff.