In 2014, Homsters founders Andrew Olejnik and Maria Ren saw a massive opportunity for new development in real estate. They discovered that in emerging markets 50-70% of transactions happen within this space and 70-90% of the real estate industry’s budget lies with the developers. As they found the online offering for this segment to be subpar, it was an area they were inspired to pursue.
“Classifieds are a right fit for resell and rental buyers willing to connect with brokers, but the process of buying a new home and the developer’s expectations of an online platform are completely different. This segment badly needed a separate value proposition.” says Olejnik.
The Homsters team set out on a journey to “move the middle classes of emerging markets into new developments”. They found their solution through creating a platform, which would digitalize the new-home buying process and efficiently compete for the developer’s marketing dollars.
After establishing an IT&Product development center in Ukraine, the team decided to pilot the platform in Kazakhstan, where over 60% of the market’s $16BN transactions happen in the new development segment. Growing from a simple Minimum Viable Product — with no brand investment and relying purely on organic growth — within 1.5 years Homsters became the market leader in the new development segment and a top 3 real estate platform.
Success factors and inspiration
Maria Ren attributes the businesses’s success to the team receiving the right customer insights.
“We had to realsze that our competition is not classifieds, it’s Google,” she admits. “Developers, unlike brokers, have an alternative of setting their own traffic acquisition channels where they pay for performance only. And if you want them to use you instead, you need to provide them with more data about buyers, better leads and better payment options than Google. If you do that – the door to CPA and transactions opens.”
The Homsters platform is fully performance driven and data centric and focuses on collecting both market and customer data, which it later utilizes to trigger purchase intent. While classifieds often know very little about their buyers, Homsters builds advanced behavioral profiles for each user. Such a data-driven approach allows it to monetize on a CPA or CPS basis with banks and developers.
Olejnik says Homsters received a large dose of inspiration after participating in PPW’s Madrid Pitch Club event in 2016. He says getting up on stage to talk about his company’s intention helped motivate the team and pursue their mission in pushing towards a focused, data-driven business model.
“Trying to decode the segment and find the right value mix for both buyers and developers was brutal. We stepped on a million landmines in the process. Through talking to industry leaders and participating in PPW’s Pitch Club event, we received invaluable insights. Most importantly – we realized we should focus on what we are the best at and instead of trying to build every market from scratch – we should find synergies with existing players, which we did and it drove us forward”.
Growing internationally through partnerships with traffic owners
Instead of building platforms from the ground up in every market, Homsters made a strategic decision to grow through partnerships with established classifieds and traffic owners.
“Online Classifieds have established brands, massive traffic, a great offer for the resell segment, but are looking for ways to enhance monetization. Partnering with Homsters gives them a turn-key solution for the new development segment and opens the door into the transaction stream in record time,” says Olejnik.
In Q2 this year Homsters announced details of a partnership with top Russian classifieds marketplace IRR.RU which decided to take an aggressive stance on the new development property segment and this partnership has paid off. The pilot went live in August 2017 and Homsters will be launching another partnership in another massive market later this year and is in negotiations with traffic owners in different parts of the world.
To avoid a conflict of interest, Homsters is looking to work with only one partner per market.
When a partnership is signed, Homsters white-labels its platform and integrates it with the existing classified, becoming its “new development section”.
The partner also receives ready-to-sell products fit for different market types (depending on market evolution stage) alongside support in marketing, content creation and sales processes.
“We don’t like to do ‘software only’. We help traffic owners become leaders in this segment. We work together on a daily basis and we share the benefits,” Ren says.
From PPW Pitch Club to sponsor
From its humble beginnings in 2015, Homsters has grown to become a multi-country business and a Bronze sponsor of the PPW Conference in Lisbon, where the founders hope to share their experience and find potential partners on new markets to take the company to the next level.
“We couldn’t be happier of where we are today. We get to work with amazing companies, help people make good decisions and help everybody make money in the process. I feel like hugging all PPW organizers for helping us get to this point,” laughs Olejnik.
Don’t miss the next PPW Pitch Club in Lisbon, where partnerships are formed.
