Less than six months after raising $75 million, Pacaso — a real estate platform aimed at helping people buy and co-own a second home — announced today that it has raised $125 million at a valuation of $1.5 billion.
SoftBank Vision Fund 2 led the Series C funding round for Picasso, which essentially went from “launch to unicorn” earlier this year in five months and is pronounced like Picasso. New backers Fifth Wall and Gingels also participated in the financing, along with existing backers Greycroft, Global Founders Capital, Crosscut and 75 and Sunny Ventures. (Sunny Ventures is the venture firm of Pakaso co-founder Spencer Raskoff). With the latest round, Picasso has now raised a total of $215 million in equity funding since its 2020 inception. This also It secured $1 billion in debt financing earlier this year.
According to CEO and co-founder Austin Ellison, the fully distributed startup launched its platform last October and already has an annual revenue run rate of $330 million — a feat that clearly seems doable. The company currently manages about $200 million in real estate on its platform, and in the second quarter, its website and mobile app combined saw 1.8 million visits, up 196% from the first quarter. It is currently serving owners “in the hundreds”.
Alison and Raskoff, former Zillow executives, came up with the concept for Pacso after leaving Zillow together about two years ago. (The publicly traded Zillow has a market cap of $24 billion today.)
Through the creation of a property-specific LLC with a unique co-ownership model, the company aims to reduce the cost and hassle of second home ownership. It also gives vacation homeowners an alternative option to rent out their property.
Pacaso differentiates its model from the age-old concept of timeshares, which sell the right to use a certain amount of time in a condo or hotel. Pacso’s goal is to bring a small group of co-owners together to purchase part of a family home and “enjoy ongoing access year-round.”
The way it works is whether Pacso buys a house or shares in the house. The company then partners with local real estate agents to market the properties. It then sells shares in the house—one-eighth of the house to a higher percentage.
Pacso has brokerage licenses in about 25 of the top other domestic markets such as Napa, Lake Tahoe, Palm Springs, Malibu and Park City. It recently expanded to its first market outside the US – Spain. Buyers can view curated listings on the startup’s website, which includes active listings, as well as previews of homes under consideration for purchase based on buyer demand.
In addition to curating listings, Pacso also offers integrated financing, “upscale” interior design, professional property management and proprietary scheduling technology.
In January of this year, Pacso had 30 employees. Today it numbers more than 120, according to Ellison.
It’s important to note that while Pacso aspires to one day offer homes that are affordable to a broader segment of the population, Allison acknowledged that currently, homes available on its platform are “too much” luxury, or There are high priced homes.
Which markets it plans to enter next, he said, will be based on customer feedback. For now, Allison said, 65% of Pacso’s customers are second home owners for the first time. and 25% are non-white or identify as LGBTQ.
softbank investment partner lydia jett She says she was attracted to Pacso for both professional and personal reasons.
For one thing, she says that when she was growing up, her family owned a tenth of a “modest” beach house on the Oregon coast.
“thThere are assets that should be an investment, and there was really an incredible amount of friction, pain, and unexpected costs in Source of Pleasure,” Jett told Nerdshala. “Liquid was a difficult asset to make.”
The friction and pain he mentioned included debates about scheduling, capital investment, and stress when one of the co-owners needed liquidity, but no one wanted to buy them.
Jett believes that part of the pain involves several things that Pacasso is trying to solve. By managing the entire co-ownership process, owners don’t have to deal with the “headache” of scheduling vacations related to maintenance, furnishings, and other things.
Allison told Nerdshala, “We designed a very innovative scheduling solution we call SmartStay, which entitles a calendar to be shared equitably among the ownership group so that each co-owner has access to the property. Have fair and equitable access.”
In other words, Picasso is effectively an intermediary between co-owners, something Jett makes it a very attractive model.
In addition, she said, SoftBank was up to the opportunity to “create a whole new category of home ownership.”
“It is something that can radically enrich the lives of millions of people,” she told Nerdshala, “and help them realize that dream of co-ownership.”