Executive Spotlight: CFO Insights with Rafael Peixoto

Comprehending the financials of a scaling company can offer clear indications of its potential success and growth. As Ukio takes on the challenges of disrupting the real estate and rental markets in Europe, having a robust and durable financial strategy is key. We sat down with Ukio’s Chief Financial Officer, Rafael Peixoto, to discuss the company’s current state of affairs and the industry trends that can impact its future.

Rafael originally hails from Brazil. His passion for finance has taken him on a journey across different sectors and locations. Starting his career in private equity, he has taken on stints in consumer goods, SaaS, and healthcare in the Middle East, Africa, and the UK. Prior to joining Ukio, he was part of both an IPO and the sale of a distribution company to a private equity fund.

Outside the office, Rafael can be found rock climbing, spending time with his wife and cat, and barbecuing with friends in true Brazilian fashion. Read on to hear his thoughts and insights.

What is your assessment of Ukio today?

Ukio has a very robust business model that delivers fast growth year over year while having high margins on each apartment. As any startup, we consume cash to accelerate growth and to invest in our team and our processes. I believe our proposition to our guests combined with our healthy unit economics will allow us to generate a lot of value.

Every company goes through stages, and we’re at the point where we’ve already proven our business model: we’ve built the foundation and already have amazing people in-house who are driving more growth. Now, to accelerate that growth, we need to reinforce controls and processes, and finance plays an important role in that.

What are the top priorities you are tackling within the finance department?

There are three main things that we are working on:

1. Building foundations: We are ensuring that our processes, routines, controls, compliance, and frameworks are how we need them to be for sustainable growth.
2. Raising capital: Securing our next round of funding is key. That means supporting the founders and management team to onboard amazing investors who share our vision when we see that the time is right.
3. Driving vision: Finance has an important role to bring visibility to the company and hold us all accountable. We’re working on improving the way we do budgets, the way we do cost control, and helping the supply team and sales team in making sure all deals they close make sense for us.

What are the key metrics you track to evaluate the company’s financial situation?

The Ukio business is simple and easy to understand, but hard to execute. We have to balance growth, which we measure through the number of apartments and sales levels, and unit economic profitability, which we measure by our gross margin per apartment and per booking. This is all while watching our cash burn and ensuring that our cash flow supports our growth trajectory.

Artificial intelligence is all the rage right now. Are you looking to implement AI-based technologies at Ukio?

In one of my previous companies, one of our core products was an AI technology to drive efficiency in FMCG execution, so I had the opportunity to spend some time studying AI.

There is a big opportunity for Ukio with AI, but we are in the part of the journey where we first have to lay down our foundations and make sure that all our systems are communicating together; that our main back office software is connected properly with our ERP, which is then connected properly with our CRM.

Once these dataflows are working properly, we will focus on driving further efficiency with AI.

What are the financial and non-financial risks you see in the real estate sector, and what are the strategies you are implementing to mitigate these risks?

There are three big risks that we are always monitoring at Ukio.

1. Getting into bad deals: It is crucial to have discipline and focus surrounding the right KPIs when analyzing a real estate deal. Our supply team performs a thorough analysis to ensure that each apartment we add makes financial sense. Our legal team then ensures that our contracts are strong enough to protect us.
2. Geographical risk: In some markets, we’re exposed to the risks of changes in regulation. In that sense, it’s important to be close to local authorities and understand the impacts of any change. We establish a productive work relationship with local communities and show how Ukio adds value to their cities.
3. Execution risk: Mitigating this risk is all about having the right compliance, processes, and routines. Routines that check not only whether we are doing the right thing, but also measure and drive the performance of our teams.

What are some things you find most interesting or different about finance in the real estate sector versus some of the other industries you’ve worked in?

The core principles of finance remain the same across different industries; we just have to take into consideration the particularities of each business. Personally, I think the beauty of our sector comes from its simplicity, which allows us to model it with a high level of accuracy.

When I was in the healthcare sector, we used to serve around 22 million customers every year. While you can do a lot of modeling on that, you cannot be as granular while maintaining accuracy the way we can with 1,000 or even 5,000 apartments.

The real estate sector is very traditional, but Ukio is trying to change this by having a more well connected network. How will this impact finance and make business transactions easier?

A lot of our customers are from younger generations and they have different expectations than before. For example, they pay for an Uber with their phone, and if they cancel, they get an instant refund. This low-friction economy leads to a different standard for how finance processes should work.

In real estate, traditionally, it takes time to get a security deposit back. It takes time to confirm a reservation. It takes time to get to know your customers. So we have to adapt to provide what this new customer, this new generation, is expecting from us while not compromising on compliance.

Do you see a demand for Ukio’s business in regions like North America, Latin America and Asia?

There is still much more growth to tap into in Europe, with London being an obvious one, along with several other big cities. But there are opportunities outside of Europe as well. I’m from Brazil where, in cities like Rio de Janeiro, it’s super tough to get a good apartment in a nice area for a reasonable price. And that is where you have high demand from people, especially young professionals looking to move there.

I believe that this is a problem that is not unique to the cities we operate in nowadays. It’s not unique to Europe, and we still have a lot of space to grow in Europe before we decide to diversify to other continents. But problems like housing affordability and the limited availability of homes happen everywhere. And that is something Ukio helps solve.

Eager to join the Ukio team? Check out our open positions.