Sumutasu, a Japanese proptech operating the iBuyer model, announced today raising a $10 million Series B, co-led by World Innovation Lab (WiL) and Mobile Internet Capital, according to a press release.
The funding round also included $1.6 million in debt secured from the Japan Finance Corporation, and participation from new investors Mercuria Investment, CARTA VENTURES and Kiraboshi Capital.
The company has now raised $16 million in funding to date and says it will use the funding to expand to adjacent areas, including mortgage brokering services; broaden its geographic coverage; and become the number one player in Japan’s direct real estate selling market by 2028.
Key geographic expansion areas include Osaka and Nagoya, and the company also noted it plans to expand its headcount and increase sales five-fold in 2021, according to TechCrunch.
While the U.S., Europe and other notable market have seen more competition in the iBuyer market (Opendoor, Zillow, Offerpad, Redfin), Sumutasu claims to be the sole iBuyer in the Japan.
The startup stated that its ability to digitally assess a home’s fair value in as little as one hour enables it to address the pain points of homeowners, including uncertain selling prices, brokerage fees and long home selling time tables.
“Despite the iBuyer business having a huge potential in terms of the market size, we haven’t seen this business model in Japan for a long time due to it being financially intensive,” Toshimichi Namba, partner of World Innovation Lab, told TechCrunch.
“We are confident that they [Sumutasu] can leverage this less competitive landscape to further fuel their growth,” Namba said.
Sumutasu also noted that these factors have led to a low percentage of homes in circulation in Japan, stating 15% compared to the standard 80% seen in the U.S., and believes this will lead towards a stock-oriented housing policy that will shift demand towards new construction.
The company, co-founded in 2018 by CEO Takahiro Sumi and COO Tomoya Ito, says it has received over 10,000 home appraisals with total monetary value of appraisals approaching $3 billion. The firm has also purchased approximately 100 properties, currently maintains 30 property listings and has partnered with more than 20 banks and remodeling companies.
Additionally, while traditional iBuyers charge service fees, Sumutasu does not charge commission or processing fees because it transacts directly with sellers, COO Ito said.
In other recent proptech news, Stonal raised $22 million and hired proptech veteran Robin Rivaton as CEO to accelerate its European expansion. HomePace also raised $7 million Series A led by Lennar to develop its home equity product and develop a homebuyer product.