OJO Labs, the real estate technology startup behind OJO, an artificial intelligence-powered virtual home shopping assistant, has raised a new round of $62.5 million in both equity and debt funding, the majority of which is equity funding, it announced Wednesday.
The company is also acquiring Movoto, a growing residential search website that says it has more than 24 million monthly visits.
We have large ambitions and those ambitions are only exciting if they get realized at scale,” John Berkowitz, the CEO and co-founder of OJO Labs, told Inman. “What this allows us to do is be able to really innovate and create a better experience from the very beginning of home search all the way to living in the home and innovate along that entire journey within completely our control and autonomy.”
“To do it that’s not on the scale of tens of thousands of people but on the scale of millions and millions of people,” he added. “This leads us down that journey.”
In the real estate industry, Berkowitz added, a lot of big real estate portals and listings websites struggle to provide deep personalization, hand-holding and accountability to the consumer experience throughout the process.
Conversely, you have companies that have poured years into technology to give consumers the right individual experience but have trouble leaping into a big scale company, Berkowitz said.
“It’s hard to go from fast scale to deep personalization or deep personalization to big scale,” Berkowitz said. “That’s just not something we’ve seen.
“I think it’s one of the biggest things that prevents everyone from achieving this vision that’s been talked about for a long time, which is the end-to-end platform and complete consumer experience,” Berkowitz added. “In reality, it’s much harder than everyone says it is, because of that paradigm.”
By bringing these companies together, Berkowitz said, both will now benefit from major scale and a deep investment in creating personalized experiences.
Berkowitz also believes his company can begin to address some of the housing inequality in the real estate industry. The tailwinds of COVID-19 and protests for racial justice across the country have exposed the deep inequalities baked into the housing market for decades, and Berkowitz believes a more personalized home shopping experience can arm consumers with more knowledge and meet them where they need help, whether they are the first to buy a home in their family, or longtime owners.
“We are going to start swinging aggressively at leveling the playing field and getting real equity in housing,” Berkowitz said. “It’s a passion of ours — if you think about our products it’s a product that meets you where you are and helps you regardless of what you know and why you come into real estate. “
“We think we have a real shot at starting to make a dent in some of the social injustice and lack of equity in real estate.”
Berkowitz praised the team at Movoto, calling them a company that does residential search the right way that is respectful of the real estate industry.
In a statement, Imtiyaz Haque, CEO of Movoto, said the company was willing to partner with OJO Labs to create a solution that guides consumers every step of the way.
“Just like OJO Labs, our vision is to create a better home journey experience by arming consumers with insight and inspiration whenever they need it,” Haque said. “Our greatest strength is our fully optimized real estate search site.”
“Combine that with OJO Labs’ deeply personalized consumer experience and best real estate network in the industry, and you have a scaled end-to-end solution, unlike anything that exists on the market.”
OJO Labs did not disclose the exact dollar amount of the acquisition, but Berkowitz noted that the fundraising round was more than the acquisition cost, so the rest of the money will go towards organic growth for the company, which includes hiring.
While the acquisition and funding round will allow OJO Labs to continue to bolster its consumer-facing products, the company is also quietly powering the recent consumer-facing website refresh and new customer relationship management tool for Realogy brands, the largest real estate holding company in the country.
The OJO Labs funding round was led by Wafra, an investment platform with $24 billion under management, along with participation from Breyer Capital, LiveOak Venture Partners, Royal Bank of Canada, and Northwestern Mutual Future Ventures. The company has raised more than $130 million to date.
“The way people buy and sell homes is changing,” Jim Breyer, founder and CEO of Breyer Capital, said in a statement. “This evolution has been expedited by recent events, and the real estate industry is on the cusp of something new in the wake of COVID-19.
“With a clear vision for the future and the technology to back it up, I believe OJO Labs is poised to be a leader in the next era of the homebuying industry.”