A relatively new Canadian real estate agency, whose founders gained experience at Uber Inc. and Blackberry Ltd., is betting on artificial intelligence to alleviate the stress of buying a new home before selling an existing one.
Now Toronto-based Properly.ca has gained access to $100 million in credit from U.S.-based Silicon Valley Bank and i80Group to help it expand from Ottawa and the Greater Toronto Area to major cities across Canada.
The credit will help with Properly’s business plan which includes a backstop valuation of equity to free clients to bid on their next home and offering to buy a client’s house if it doesn’t sell within 90 days, CEO and President Anshul Ruparell said by phone.
“If you’re a homeowner looking to move in a very fast and competitive market, when that home you want to make an offer on hits the market, you want to move very quickly,” Ruparell said. “Our customers get guaranteed downside protection with unlimited upside.”
Properly is playing the technology disruption card to smooth real estate deals somewhat akin to apartment hunter Compass in the U.S. as it bets on the desire of modern consumers to sidestep life’s hassles, whether it be cooking with Skipthedishes food delivery or grocery shopping with HelloFresh meal kits. The Canadian real estate industry continues to accelerate in most markets outside of the Prairies, which has been marred by pandemic-induced oil price woes.
Properly uses computer models and market analysis to determine equity values, which can be combined with mortgage offers from Canada’s large five banks including special rates with the Canadian Imperial Bank of Commerce for purchasing your next home while you’re still in your current one. Then it offers staging and handyman tweaks for selling it, all for a 5 per cent commission, the industry standard, Ruparell said.
Many brokerages offer similar services, noted Waterloo, Ont.-based Remax agent Dawn Peace, but few clients take them on because the current market prices move so fast.
“Until you sell you don’t know how much exactly you have in your hands, and you might get $100,000 above asking and you might not,” Peace said. “Until it’s technically exposed to the real market with real buyers, you don’t know.”
Ruparell said: “The process of buying and selling a home has remained complicated and stressful and uncertain and we don’t believe that should be the case. There’s an opportunity for us at the same price you’d work with a traditional agent to provide this additional value service and do so profitably.”
The current backstop is limited to $1.5 million but Properly plans to raise its home guarantee to $2 million in about a month, Ruparell said.
Ruparell, a Calgary native, earned a degree from the Ivey Business School at the University of Western Ontario before completing an MBA at Columbia University in New York. He helped build early stage companies in New York, such as Merlin, a jobs marketplace, and Poncho, an insurance company, while working as an entrepreneur in residence and investment team member with venture capital firm FJ Labs.
Co-founder Sheldon McCormick, a Queen’s University commerce graduate, was part of Uber’s launch team in Canada and is Properly’s chief operations officer.
Chief technology officer Craig Dunk helped found Properly with his technical acumen after helping create BlackBerry Messenger and the technology that allows push notifications on mobile phones. He studied at the University of Waterloo.
Since its founding in 2018, Ruparell said the company also raised $15 million in venture capital from sources such as FJ Lab, an investor in Alibaba, Airbnb, Uber, and Prudence Holdings, the founding investor in Compass, a real estate tech company with 17,000 agents across the U.S., and Golden Ventures, a Canadian fund backing Skipthedishes.
Angel investors included Ruparell’s cousin Raj, a founder of the Canadian mattress company Endy, Andrew Macdonald, global senior vice president at Uber, Ian Black, head of retail at Shopify Inc. and former head of UberEATS for the U.S. and Canada, and Kevin Ryan, founder of Business Insider, Doubleclick, MongoGB, Gilte Group and Zola, Ruparell said.