Online real estate startup ZipMatch said it is nearing the completion of its third round of funding. This was a follow up to its P24.4 million ($550,000) seed round from various investors; the company has already raised a total of P44.5 million ($1 million) seed fund since its founding in 2012.
Citing the huge business opportunity in the Philippines, the startup said it would primarily be focussing on the domestic market and then plan for overseas expansion
In an interaction with DEALSTREETASIA, ZipMatch co-founders John Dang (CEO), and Kyle Wiltshire (CTO), explained the company’s decision to focus on the domestic market. They spoke in detail about the company’s future strategy that involves nationwide expansion and the technology used for this expansion. They also gave an in-depth insight into the possible challenges of starting a new business in the Philippines.
Some of the company’s latest moves for nationwide expansion are growing its Manila-based team and the recent launch of its new product called “Explore platform” which it plans to apply in popular real estate areas in the country.
Tell us about ZipMatch’s history and the present status?
John: Our CRO Chow Paredes and I are co-founders. We started this company in January 2012, working on it part-time. I was in online gaming and she was a sales director at a real estate developer. Eventually, we left our full time jobs and Kyle joined us about a year and a half later.
We started of just wanting to drive home buyer customers online and then we would try to sell the homes ourselves but quickly out-scaled that. Our marketing was much stronger, and since it worked for us, it was scaled up and extended to other real estate developers and brokers; while giving a superior customer experience to the home shopper.
ZipMatch became a platform where real estate developers and brokers can list their properties, while we help home buyers through the process.
Along the way we changed our revenue model and felt the need to raise funding because the unit ergonomics is very different from selling a home, an inquiry or lead.
IMJ Investment Partners and 500 Startups were our first two investors then the rest came, like IdeaSpace, Hatchd Digital, and a couple of other angel investors. We raised rounds and we’re now in the midst of closing our third.
What are your business expansion plans?
John: We are focused on expanding our latest product throughout the Philippines and creating solutions so that people who want to buy a home, come to ZipMatch. From there, we’ll move towards international expansion.
Kyle: Our goal is to make home ownership a reality for everyone. The opportunity we see right now is that a lot of people are doing classified real estate but the information could be unreliable. There’s a lot of repetitive picture subscriptions that don’t make sense, prices are questionable, brokers on the other side are not that trustworthy, either.
How do you plan to use your invested funds?
Kyle: Our latest product, the Explore platform, is where we are putting our capital. We are focusing on Makati and Taguig because they are some of the hottest real estate markets. Also it’s close to home and easy for us to get all the data. We will continue to try the same and keep optimizing the whole process for ZipMatch. Eventually, it should be the easiest way to look for a property in the Philippines.
The Explore provides property overview. It has all basic information such as the amenities found in the building, even the service providers and other unit details. Property reviews show what people are saying about a development. The reviews were written by ZipMatch’s scout team, current and former residents, brokers, and those who have visited the property. It provides a 360-degree virtual tour giving a Google Maps-style tour of the project including, the facade, lobby, and the amenities. Unit listings feature the number of available units for either sale or for rent. Location overview includes a special map that lets people know the project location, establishments around the area, and other projects nearby. And developer overview gives a brief background on the property developer.
How much do you spend on research and development?
Kyle: I think mature businesses have R&D section because they’re experimenting. The fun part of being a startup and being small is that R&D is in our culture. So we really have a large group of people in engineering, product and design. The whole idea is to push the boundary and figure out new ways of doing things.
Our actual technology stack is simpler than most but we’re always looking for new innovative ways to display information to make things easy. Real estate is challenging; it’s really a very traditional industry with a very high transaction cost.
Technology gives us a chance to kind of cut down the difficulty and make it easier.
John: Every department in our company is doing R&D. As a startup you always try to experiment; there is no set formula. It’s a constant experimentation and reiteration and sometimes we fail and drop things that don’t work.
How do you plan to attract more investors?
John: I think we’ve been fortunate as investors have been introduced to us and they came to us. Our goal is not really just to raise money. Our goal is to what we will do with that money.
Kyle: We had few offers and discussions over the last year and a half with different institutional investors, strategic investors. It’s more about who we work with versus how much money we can raise or what our valuation is.
What do you think of today’s startup space in the Philippines?
Kyle: Next five to 10 years will see a lot of great things happening here. Right now, the ecosystem is quite young, there’s not a lot of people taking risks. The money is coming mostly from outside and there’s not a lot of institutional investors here.
John: I think two or three years ago is a lot of different than it is now. There’s a lot more attention but it is still young. When the pool of investors is thin you can really feel the pain. It is nothing like the Silicon Valley.
What type of mindset should a startup founder have?
John: Number one is grit. I think that’s what’s lacking most. It is so hard in the Philippines just having to fight through all the little challenges. It’s not even the big problems that would kill you, it’s all the little problems that you encounter like filing your taxes correctly, and the HR issues, and business permits to choose.
The little things will add up and just beat you down. I think founders need grit, to be able to fail over and over and keep going until finally they get that shot of success. Another thing is preparation. Opportunities always come by. There’s a lot of opportunities in the Philippines and plenty of ideas but the questions is, are you ready and capable of taking those on?