In the latest of my PropTech Influencers series, I caught up with Angelica Donati, Saurabh Saxena, and Rayhan Sawar, Co-Founders of Houzen, a company looking to bring a human aspect to the world of online letting agency.
Tell me about Houzen and the journey so far
Houzen was officially launched in March this year, with the aim of creating an online ecosystem to support landlords in the lettings space. After extensive research of the market we realised that though there are plenty of tech companies offering tenant facing services, landlords are extremely underserved.
So we embarked on a mission to build a platform that would support landlords throughout the letting process, as well as providing them with management tools that they can use throughout the rental cycle. We also quickly discovered that letting agents are still the most effective channel for finding the best tenant as quickly as possible, with the highest rental income.
The Houzen platform offers an online to offline model that uses lettings agents on the ground to run viewings and close deals, whilst tech enabling the rest of the process, from discovery, through contracts, to payments and management.
We recommend the best three independent agents for each London property, who we continuously vet and assess using our proprietary analytics tools Aggregating top performing independent agents (see below for a performance comparison graph) allows us to extract the best value by tapping into their hyper-local knowledge and networks while providing them with the tools to deliver a more cost and time efficient service.
Last year, we tested the Houzen model as an MVP with several portfolio landlords such as Greystar and The Collective, and competed head on with major corporate agencies such as Foxtons and Savills. We officially launched the platform in March of this year, and have been successfully working with both institutional and private landlords since then.
Houzen is centered on an easy to use online chat, that allows landlords to communicate with agents during the letting process, and then with their tenants once an applicant is successfully placed. We are now in the process of building out a suite of value adding management tools, focused on rent collection and maintenance, that will be delivered to the landlord and tenant via the chat.
What are the biggest issues facing tenants and landlords today?
Landlord and tenants face different issues stemming from the same problem – a lack of transparency and aggregated data in the lettings space gives users at both ends suboptimal outcomes. Landlords risk getting saddled with bad tenants, or can face longer than necessary void periods and, in the current climate of cooling demand for London real estate, significant reductions in rental values.
On their side, tenants often spend a considerable amount of time viewing properties that are not a good match for their needs, and then end up stuck with overpaying for poor quality rental stock. Both landlords and tenants feel that they are being taken for a ride by their agent.
Houzen seeks to fix all this. By bringing transparency (in the form of continuous oversight, and ratings for landlords, agents and tenants) and liquidity (in the form of property matching and demand optimisation) to the lettings market, we seek to reduce the friction and loss of value between landlords, agents and tenants. Rather than finding novel ways to cut up the pie, we are making the entire pie bigger for all to enjoy!
How do you guys differ from the raft of lettings platforms out there, claiming to help the tenant and landlord?
We are not an online agent. We are not a management software provider, or an agency software provider. And we are not focused exclusively on a single user group to the detriment of other players in the lettings process.
By working across landlords, agents and tenants to deliver suitable properties at a competitive rent, our transaction and communications platforms makes the process simpler and more transparent for everyone, and we can potentially work with all the other platforms out there (rather than compete head on) to add value for our clients.
What are the plans for the business over the next 5 years?
Houzen aims to become a global real estate platform, which helps all participants execute and communicate with each other irrespective of location – think of it as a Slack for real estate. Over the next 5 years, we will strengthen our core product and continue to partner with or build value-added functions (using emerging technologies such as machine learning, blockchain, and computer vision).
We want to consolidate our London presence and expand to other major cities in the UK, before moving to Europe and, then further afield. Once we prove our mettle with lettings, moving into sales would be the next step.
If you could invest in one PropTech business, which one would it be, and why?
As a business, Houzen is very focused on the potential that so-called “deep” technologies – Big Data, Machine Learning, Artificial Intelligence, Computer Vision, Blockchain, etc. have for the residential real estate space. We were even commissioned by RICS to write a research paper on the applications of proptech in general, and deep tech in particular, in the residential space which will be published at the end of the summer.
It is only logical that, out of all the proptech companies out there, we would invest in a deep tech business in a field that we have found in our study to be particularly relevant to the residential space: Machine Learning. Specifically, we like leverton.ai, as they have leveraged the biggest advantage for real estate in the ML space – namely, the quick and cost effective analysis of full data sets rather than samples, which delivers accurate results rather than well-informed estimates. We also strongly believe in the importance of the team (and we have carefully built an A class team for Houzen) and the team at Leverton is of a very high calibre.
So, we would definitely pick Leverton as an investment target.
A huge thank you to the guys at Houzen for taking the time to chat with me. If you’d like to chat about being featured in a PropTech Influencers article, please feel free to get in touch with me.