An Empty House Is Not A Home. 🏡

This week started with great news for the portuguese tech scene. Uniplaces raised $24M from Atomico, the venture capital firm from Niklas Zennstrom, co-founder of Skype.

Suddendly I got interested in this business between Uniplaces and Atomico. Not because this Series A is a novelty in portuguese soil but because of the deal ifself.

A friend of mine, Sérgio Santos, laid his simple math yesterday. TechCrunch states that:

The site now operates in 38 cities and has over 40,000 furnished rooms in its inventory, and claims to have has generated over $25m in bookings for landlords since launch. Students from over 140 different countries have booked their student accommodation, for more than 500,000 nights, with Uniplaces.

500.000 nights, assuming a regular student stays in a uniplace between 3 to 6 months, you’ll end up with 5.500 to 2.700 bookings. But let’s assume 4.000 bookings for this example. Looking at the fees Uniplaces gets from its service, they range from €50 to €200. Let’s assume it’s an average of €125. All together, it sums a lifetime revenue of €500.000. The preciseness of this math it’s not relevant here. I just want you to think of a number close to this half a million euros and put it side by side with the 24 million dollars of funding.

Now, I’d say these $24M were not given to Uniplaces because of its revenues. Nor because of the users. I’d bet that everyone just saw the huge market size ahead of Uniplaces, in other words, the size of the opportunity here.

One of the key characteristics of unicorn breeding is the market size. Why do you think Tesla is valued at 30 billion dollars? That’ll be another Medium post. Surely it’s not because of its revenues nor the amount of cars sold to date . Or why does Uber has roughly the double of Tesla’s valuation? The market is expecting Uber to report 2 billion in net revenue for 2015, which accounts roughly for 4% of its private market capitalization.

Or going somewhere else, why is Theranos valued at $9B and Oscar at $1,5B? I’d love to see some financial reports of Theranos but they’re into secrecy, a lot. And about Oscar we also don’t have a clue about financial performance but Google Venture poured some its honey into the cool healthcare company.

All of these 4 questions can be answered with the same answer: market size. But what’s most important about these types of markets (transportation and healthcare) is that they’re part of every single adult on earth. And you know what’s similar but bigger than getting one semester stays for university students? The whole housing market. And housing is part of every single adult in this world. Uniplaces will soon try eat its slice of the cake because it can easily tweak itself to market not just for the students abroad but for (young) adults.

Housing is one of biggest markets yet to be explored by tech companies. Sure, there’s Airbnb but Airbnb focus solely on short-term stays. And no way regular people can live on long-term stays on Airbnb.

We’ve seen that to have success you don’t need to be a full stack company in whatever market you’re into. You just have to create the layer between the users — people looking for their new homes, and the supply system (apartments and houses). Uniplaces will try to be this exact layer for house searching, a market that, according to Zillow, just in the US is worth 441 billion dollars — just in US.

So yes, Uniplaces’ market is big. Really big. As big as transportation or healthcare. That’s what makes them worth whatever final valuation the $24M in funding got them. And I’m happy for them. 😊