Nomad Homes goes extra mile with one-stop shop for potential house buyers and tenants
▶ PropTech platform uses algorithms to suggest suitable listings, provides a customer service agent to arrange viewings and deal with brokers, and also offers financing options, writes Mary Sophia
Helen Chen, chief executive and co-founder of PropTech start-up Nomad Homes, has always loved property. Growing up on the US West Coast in Washington, she would spend her free summers helping her parents to fix up the rental properties they owned and making them ready for the new tenants.
Unsurprisingly, even her first investment was in a real estate asset – a rental property she purchased at the age of 23.
“This is what I love [and] this is what I think about all hours of the day,” says Ms Chen.
So, it was only natural that she zeroed in on a market gap in the property sector while pursuing her master’s degree in business administration at Stanford University.
With a stint in private equity at Blackstone and the China Investment Corporation, Ms Chen had a keen eye for potential investment opportunities.
While digitisation was rapidly transforming many sectors, she noted that property was lagging behind.
“Real estate is a $30 trillion industry. It is the largest asset class globally and across the UAE,” she says. While there are “over $20 billion transactions every single year ... real estate is still largely offline. The opportunity that I saw was to bring the real estate transactions online”.
Ms Chen and her co-founders – Dan Piehler and Damien Drap – sought to address this particular gap when they set up Nomad Homes, a platform that collates several options for users looking to buy or rent homes in Dubai.
Users visiting the platform need to enter specific details such as the preferred area and the number of bedrooms they require. Nomad Homes will use algorithms to suggest listings that might be suitable for users, based on the details provided.
The start-up is not the only one to digitise home listings in the emirate. Portals such as PropertyFinder, Bayut.com and Dubizzle all offer similar services. However, Nomad Homes, Ms Chen argues, goes an additional mile and offers users a customer service agent, who helps to co-ordinate viewings and deal with brokers.
“We become their one point of contact. So, buyers no longer have to deal with 30 different listing agents and they still have access to the entire market,” Ms Chen says.
Nomad Homes teams up with property brokers in a bid to offer a wide range of authentic listings. Once a sale goes through, the start-up takes a commission from the deal. The platform also offers buyers a list of financing options.
“Our main value proposition is that you can search, transact and finance in one place,” she says. The company offers a similar service in Paris too.
Property marketplaces such as Nomad Homes, Redfin and Zillow are becoming more popular after homebound users increasingly embraced digital channels amid the Covid-19 pandemic. The industry, which once depended on in-person visits, is coming to terms with a more tech-savvy consumer base.
A survey conducted by USbased property marketplace Zillow showed that 39 per cent of millennials – those born between 1981 and 1996 – are comfortable buying a home they have seen online. Fifty-nine per cent said they would be ready to put an offer for a home they only toured online.
Figures for the region are hard to come by but the trend is not so different in the Middle East either.
Ms Chen says that Nomad Homes, which was set up in June 2020 in Dubai and Paris, registered “tens of thousands of users” and has grown 16 times in the first half of this year alone. She declined to disclose the number of transactions on the site.
While she admits that the pandemic has proven beneficial for PropTech start-ups such as home-buying portals, the shift to digital channels started long before.
“We already saw it starting to happen but Covid-19 really accelerated this trend of moving online,” Ms Chen says.
“More and more people are comfortable with virtual tours and are completing the transactions online.”
She did not specify whether there has been an increase in sales or renting activities.
“Renters are a consistent trend and that is always growing. But recently there has been a pickup in buyers as well, just given where the market is,” says Ms Chen.
Residential transaction volumes in Dubai were up 76.8 per cent in the first eight months of the year while secondary market transactions jumped 120.7 per cent and off-plan transactions rose by 39 per cent, according to property consultancy CBRE.
As online home buying picks up pace, Nomad Homes has also garnered investor interest. The company raised $20 million in a Series A funding round that was co-led by 01 Advisers, an investment fund founded by former Twitter executives Dick Costolo and Adam Bain, as well as New York-based investment company The Spruce House Partnership.
That came after a $4m investment round earlier this year.
The founders plan to use the funds to invest further in developing the product and technology, including investing in machine learning, to improve the customer experience.
However, an add-on that Ms Chen hopes to have is one that enables users to secure mortgages through the platform.
“I do believe that all PropTech companies will one day become FinTech companies. So, one of the latest offering we want to include is a FinTech or a finance offering.”
Despite the recent boom in PropTech, Ms Chen and her colleagues have no intention to exit the business immediately.
“I would say right now we are really focused on our markets and [our] focus will be on Paris and Dubai as of now.”