kodehyve, the Luxembourg-based PropTech startup that’s leading the digitalisation of the country’s real estate sector just raised €1 Million in seed financing. With this investment, kodehyve aims to first perfect its collaboration tool before scaling up at the end of the year and expanding into new European markets.
When Felix Hemmerling, the 25-year-old co-founder and CEO of kodehyve was looking to purchase his first apartment in 2019, he was shocked by how outdated the entire housing market was. Next to the sleek and digital world of FinTech that he was familiar with, the world of real estate appeared to him like a relic from the past.
“When I acquired my first apartment in 2019, I was frustrated having to wait for days for a simple paper confirming something that I just discussed with the real estate developer.”
Instead of succumbing to his frustrations however, Felix, who founded his first startup when he was still at University College Dublin saw an opportunity and grabbed it with both hands. Together with co-founder and CTO Julien Casse, he founded kodehyve in May 2020 with the aim of digitizing real estate workflows, reducing inefficiencies and solving some of the deeply entrenched problems of Luxembourg’s real estate market.
“kodehyve is not just about helping real estate developers, it’s about enhancing the whole real estate ecosystem,” explains Felix.
Fast forward one year (and a global pandemic) and kodehyve has already started generating revenue, moved offices, launched a new website and – most impressively – secured €1 Million in seed financing, nearly double the amount the co-founders first aimed for.
“If you told me a few years ago, that I will raise €1 million one year after creating a new startup. I would have probably laughed. But this just shows the substance behind what we do as well as the professionalism and quality of our team.”
“Millennials and Gen Z who are beginning to enter the housing market are used to instant access over everything.”
The Pandemic led to a “big rethink”
One would think that there are better times to start a new business than during the middle of a global pandemic, but, as it turns out, it was just the right time for kodehyve.
While kodehyve was in the middle of rethinking the outdated workflows of real estate, the rest of the sector was directly confronted with something they had been ignoring for too long: the language of the 21st century is written in code.
“We live in the year 2021 and real estate still largely relies on outdated processes. From lengthy email exchanges to physical mail and phone calls, the real estate market is lagging at least 5 to 10 years behind the financial industry when it comes to digitalisation and the general use of powerful solutions,” explains Julien, co-founder and CTO.
Although the real estate sector is slowly warming up to the idea of digitalisation, it was not love at first sight. As is often the case when two foreign parties meet, there was an “exploratory phase” in which the kodehyve founders were uncertain about how the old guard would react.
Suddenly, in September 2020, a real shift took place.
“Things took off. Real estate developers, small and large, started reaching out, because during Covid-19, they had the time to rethink, and re-position themselves from the digital point of view and how they wanted to handle things [going forward].”
Digitizing real estate
In recent years “digitalisation” has become a buzzword that has lost some of its initial meaning and promise. Fortunately, kodehyve knows what they are doing and how to back it up.
Their collaboration tool which brings the digital world to that of brick and mortar aims to tackle three specific areas in real estate: project management, customer relationship management as well as financial and data analysis.
The digital elements of the project and customer relationship management are quite straightforward and revolve around using a fully integrated software solution, which Felix calls “Google-Drive-like”.
In this solution, workflows between real estate agencies and customers are centralised so that all parties get a better overview of the tasks at hand and their respective progress. Some of kodehyve’s features include task and deadline management, information and document exchange flows, customer onboarding, e-signatures, KYC and AML checks, billing, live chat, budgeting. This is a non-exhaustive list that customers can tailor to their changing needs and bottlenecks.
As Felix mentions, their tool is not a “mass product” in which the product is the service. Instead, kodehyve bills itself as a “team-as-a-service,” that wants to support its clients in enhancing their services and increasing their productivity.
Interestingly, after having worked with one of their first clients, they added a whole breadth of functionalities on the financial and data analysis side.
“We realised that these are needs as well, from the side of real estate developers and agencies, to better analyse their projects,” says Felix. To cater to these needs, kodehyve integrated advanced modules capable of analysing KPIs, extracting the most important business intelligence as well as custom reports.
“There are real estate developers that really want to provide the transparency.”
More transparency, more benefits
The demand for digitalisation is not only driven by a changing sector but also by changing customer preferences. Indeed, Millennials and Gen Z who are beginning to enter the housing market are used to “instant access over everything,” as Felix aptly puts it.
While the jury is still out on whether “instant access over everything” is a blessing or a curse, it does bring a strong indirect benefit to the customer: transparency. Customers, who, like Felix, used to have to wait for weeks to get confirmation on their documents, can now sign them digitally and instantly. This improved level of access and transparency is something that customers prize, which in turn incentivises real estate players to improve their services.
“They [our clients] even put kodehyve in their contracts with suppliers and customers as the only communication tool that can be used. So basically, they can’t send emails anymore. They can’t send physical letters. All communication is done via kodehyve. Everyone has the same level of transparency in the tool. And that’s, I think, what’s great to see: that there are real estate developers that really want to provide the transparency.”
The future of kodehyve certainly looks bright. Soon, the team are going to join Fit 4 Start’s acceleration programme where they intend to have their product “challenged by mentors” and “find an international product market fit.” After Fit 4 Start, they will put all their energies into perfecting their software and IT side of things before considering where to expand. Possible locations include Munich, Berlin, Zurich, and Geneva.
Elaborating on their long-term vision, Felix adds, “if you can help make an ecosystem as a whole more efficient, you can contribute to solving at least some of the housing problems we have.” kodehyve realises that not all of Luxembourg’s housing problems are due to inefficiencies but likes to see itself as a business that wants to play its part. Felix concludes, “if we can help contribute to solving part of this problem, I would consider us successful.”
Backed by a team of excellent investors, including the CEO of Cactus, former COO/investor at Slightly Mad Studios and former Chairman at KPMG – among others – kodehyve is a startup that won’t be leaving our sight anytime soon.