Vote of confidence in proptech McMakler with fresh €20m funding

Berlin-based online broker McMakler has raised a further €20m to add to the record €50m it raised in July, bringing its total funding to date to €74.5m and putting it at the forefront of German real estate proptech startups. 

The new investors are London-based venture capital firm Balderton Capital’s Liquidity I Fund, and GR Capital, who will replace investors from earlier financing rounds who are exiting. The new funds raise put a valuation on the company of €230m. The company’s largest shareholder remains Frog Capital with a 20% shareholding.

McMakler said the new funds will be used to further develop McMakler’s technology base, which includes a transaction platform and advance AI real estate valuation models.

The McMakler hybrid model uses tools that blend artificial intelligence, data science and digital workflow to improve the experience of buying and selling a home. It involves both traditional personal broker expertise with technology, with the aim of leading to quicker, more transparent transactions.

According to Felix Jahn, co-founder and CEO of McMakler, “Brokers remain the absolute experts when it comes to trading properties, but many traditional real estate companies do not have the technology to provide the highest level of service across the country. This is where McMakler is different: we have built the largest full-value chain transaction platform for real estate in Germany, that combines a great digital experience with highly skilled individual agents to provide superior service to our customers.”

While online estate agency has become the main tool for property search, most people still bring in a broker to carry out a transaction and few traditional estate agents understand how workflow tools and data science could help them to conduct business more efficiently, ultimately cutting costs to buyers, sellers and landlords. McMakler is bringing the ideas and skills of proptech companies to the traditional estate agency model and sees the potential of transforming the whole sector.

McMakler already employs more than 450 staff in Germany, Austria and France, including 255 full time real estate agents. Turnover last year (2018) was €400m, and it expects to top €1bn this year. It was founded in 2015 by Felix Jahn, Hanno Heintzenberg and Lukas Pieczonka. Jahn is an experienced ecommerce investor, having co-founded Home24, Europe’s largest online furniture retailer, and is also an investor in two of Germany’s home-grown tech successes Zalando and Auto1 Group.

There is considerable competition in the online broking sector, with at least 31 startups competing for a slice of the pie in the German-speaking markets, according to private equity group Blackprintpartners. Competitors include firms such as Homeday, Maklaro and Planethome.

Mr. Assaf Harel, partner at Israel Growth partners, which has invested in McMakler, said in June this year at the time of the €50m fundraising, “It is astonishing how the traditional brokerage industry is still analog for most parts, and therefore ripe for disruption by data and technology. McMakler holds a clear forerunner role in the proptech segment. We are impressed by the company’s rapid growth since its founding in 2015, and are convinced that McMakler has what it needs to be a European market leader.”