Struggling Casavo Abandons iBuying, Focuses on Mortgage Brokerage

The European iBuying startup Casavo has "parked" its iBuying-focused model and instead pivoted to mortgage intermediation amid difficult market conditions.

Francisco Sierra, the company’s general manager for Southern Europe, told Spanish outlet Ejeprime that "now is not the time" for iBuying, with Casavo taking the big decision to stop buying properties for now.

The company will instead focus its efforts on its mortgage intermediation product, which launched in June of this year. When reached for comment, Casavo CEO, Giorgio Tinacci said:

"Casavo’s long term strategy has always been to build an integrated end-to-end marketplace matching supply and demand in a seamless way; we have  leveraged the iBuying service as a starting point to bring liquidity to home-sellers. The current macroeconomic conditions have accelerated a transition to an asset-light business model that started over two years ago.

We aim at keeping an 'immediate liquidity proposition' within our platform offer, but, given the market volatility and high interest rate, we have to ensure that such service is delivered in a financially sustainable way in the current environment. For this reason, we are currently focused on reducing the inventory exposure of our iBuyer service while delivering a superior customer experience with our Marketplace offer"

Casavo says it has completed 4,000 operations, including 1,000 in Spain, since launch—with the average time for Spain-based to complete the application process taking just 30 days, half the national average.

It's not been an easy 12 months for Casavo.

Despite raising €400M in a 2022 Series D funding round (and €200M in its Series C round in 2021), a  €100M expansion to Portugal was abandoned after just one year, with job cuts equal to 30% of the iBuyer's total workforce this February 2023.

Indeed, it prompted CEO Giorgio Tinacci to pen and publish an open letter to all Casavo employees—with a specific mention of difficult market conditions as a defining factor in the company's obligation to streamline its operations.

The question is, if a well-funded, international iBuyer—the face of iBuying in Europe, no less—feels obligated to capsize its own business model, what does the future hold for other iBuyers struggling with similar market conditions?

We have reached out to Casavo for comment and will update this article if we receive a response.