Kocomo has raised $56 million to further its mission of democratizing owning a luxury second home in popular vacation destinations like the Caribbean and Mexico.

While timeshares may still conjure images of Las Vegas salespeople and the early 2000s, a new startup hopes to give the concept a modern and luxurious update.

Based in Mexico City, Kocomo launched earlier this year but has already raised $6 million in equity and $50 million in debt financing from investors interested in its product: co-owned luxury properties in popular vacation destinations a short flight from the United States.

Everything is very new — the company launched quietly in May with a beta version of its website shown to a small group of waiting-list clients — but already has dozens of amenity-rich homes worth $1 to $4 million that people can buy into for fractional ownership from around $250,000.

“I have three kids and use Airbnb a lot but it hasn’t allowed me to create memories in a place while buying a full home by yourself outright and then using it for only two or three weeks a year didn’t make sense,” co-founder Martin Schrimpff told Inman. “We saw the opportunity to do something different and tap into almost an entirely new asset class of people [in between those] who only rent and those who buy properties outright.”

The idea, which came to Schrimpff and fellow co-founder Tom Baldwin during the pandemic, is to democratize the idea of the vacation home so that more people can have access to one without paying the $1-million-and-up price for a luxury Caribbean property. But unlike a traditional timeshare, the shares are actually owned rather than sold as “right to use” to the buyer. This allows buyers to amass equity as the property value grows while also renting the weeks they don’t use as extra income.

Kocomo

“Timeshares have a bad reputation for a reason: You don’t actually own the underlying real estate and the resale market is terrible while renting these types of properties can come with a price tag of $15,000 to $20,000,” Baldwin said. “That is how Martin and I started thinking about the world of vacation real estate and how to create an opportunity for people to take vacations in a way that connected with them emotionally but also made financial sense.”

Such a product is a competitor to Pacaso, the second home startup that former Zillow executives Spencer Rascoff and Austin Allison launched in October 2020 and raised $75 million in funding in March. Schrimpff said that their unique selling point is that the homes they buy are located outside the United States rather than in places a short driving distance away from one’s main home.

“Our goal is to facilitate those cross-border transactions,” Schrimpff said. “We know we know Mexico well and we want to create the trust between Canadians and Americans looking to buy and needing a trustworthy company to help them in that purchase.”

Ownership can be split by only one other family or as many as eight others. Kocomo purchases the homes through an American LLC, divides the times between the co-owners and provides it with the necessary upkeep and maintenance. They also allow owners to rent off their unused weeks for extra income while Pacaso limits use of the properties to the co-owners. Once a year, the different share owners select the weeks they want — the system ensures each owner will have access to both high-season and low-season times.

Kocomo Founders Martin Schrimpff, Tom Baldwin and Graciela Arango

Currently looking to use the investor money to buy 20 homes in Mexican cities like Los Cabos, Punta Mita and Tulum, Kocomo’s next plans include expanding into Costa Rica and the Caribbean in the near future and ski towns or even European cities like Paris and London farther down the line. The company’s target clientele is high-earning individuals 35 and older — people who have kids, generally plan the same vacation year after year but may not necessarily want to deal with the large cost and high property fees of a second home.

“Typically, fractional ownership has been done by developers that broke it up into pieces, charged fees that weren’t completely transparent and  made too much of a margin,” Baldwin said. “That’s what we’re trying to disrupt because we feel that, by doing it the right way, co-ownership is really going to take off around the world.”

AllVP and Vine Ventures co-led the equity while Architect Capital funded the debt. Other investors include Picus Capital, Fontes – QED, FJ Labs, Clocktower Technology Ventures, and JAW as well as Latin American startups Loft, Cornershop, Kavak and Creditas.

Email Veronika Bondarenko

luxury | rentals | websites | Zillow
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