Designing a Digital Marketplace in the Long-Term Rental segment for a Real Estate Company
Challenge
In recent years, many companies have created new groundbreaking models by means digital Marketplace strategies. A digital marketplace, unlike traditional commerce where value is produced upstream and consumed downstream of the pipeline (linear flow of value creation), allows producers and consumers to connect through a network that provides them with the tools to interact. This generates additional value to the consumption unit itself, based on information management and connectivity.
In this context, a Real Estate company, whose main activity is the sale and rental of real estate (the vast majority coming from banks), planned to create a new business model generating "on top" value for its current business, taking advantage of its experience and knowledge of the sector.
In this context, a Real Estate company, whose main activity is the sale and rental of real estate (the vast majority coming from banks), planned to create a new business model generating "on top" value for its current business, taking advantage of its experience and knowledge of the sector.
Solution
During the first stage, our collaboration focused on analyzing the client's current platform, identifying the pain points of the long-term rental market and benchmarking potential and current competitors, both in Spain and internationally. Once the opportunity was validated, we worked on the product-market fit to ensure that the value proposition solved real problems faced by the users. Finally, we developed a detailed business plan and a commercial pitch that would allow us to defend the project against the owner fund in order to access the necessary investment.
One of the main challenges we encountered in the project was to define an ambitious and realistic business plan that would sway the investment fund. To overcome this challenge, an extensive benchmark of reference players in more mature markets was carried out and their ambition was adapted to the size of the Spanish market and its specificities.
One of the main challenges we encountered in the project was to define an ambitious and realistic business plan that would sway the investment fund. To overcome this challenge, an extensive benchmark of reference players in more mature markets was carried out and their ambition was adapted to the size of the Spanish market and its specificities.
Benefits to the Organization
The project made it possible to identify financing needs, draw up a roadmap to achieve the objectives set and estimate the value of the solution. The new business model was estimated with a 3-year value between €50 and €100MM based on comparable projects.
In the last year, other players (especially Proptech companies) have entered the long-term rental segment, thus confirming the opportunity's potential.
In the last year, other players (especially Proptech companies) have entered the long-term rental segment, thus confirming the opportunity's potential.