Sumutasu gets $10 million to digitize the Japanese real estate market – TechCrunch

Sumutasu, a Tokyo-based proptech startup that offers a direct online real estate buying service, secured $8.2 million in equity and $1.6 million in debt. The company has raised a total of $16 million since its inception in 2018.

Takahiro Sumi (CEO) and Tomoya Ito (COO) co-founded Sumutasu four years ago to streamline the buying and selling of residential real estate.

In Japan, where the real estate market is fragmented, owners have faced uncertain selling prices riddled with brokerage fees and an average selling period of between four and eight months, Ito said. These factors have led to a low percentage of existing homes in circulation in Japan – around 15% compared to the 80% typically seen in countries like the United States and the United Kingdom, according to the 2020 report from the Ministry of Lands, Infrastructure, Transport and Tourism. (MLIT). Sumutasu says its platform allows users to access a fair home valuation within an hour.

Sumutasu has adopted an iBuyer model, which means it buys homes directly from owners, renovates them on a large scale, and then resells them to buyers. While the United States and Europe have a more competitive iBuyer market with Opendoor, Zillow, Offerpad and Redfin, Japan has a nascent iBuyer industry, according to the company.

“The trading model is similar in that it is an arbitrage model where the difference between the buy price and the sell price is profit,” Ito told TechCrunch. “The difference is that we buy from the seller at a price below the market price. The reason we are able to buy at a discount is that we offer sellers the value of being able to sell at their own pace and without hassle.

Also, unlike iBuyers who charge a service fee, Sumutasu does not charge a commission or processing fee because the transaction is done directly with the seller – without an intermediary agent, Ito said in an interview. When buying an existing home in Japan, brokerage fees usually amount to around 3% of the property price, Ito added.

The Japanese real estate tech startup operates its service in Tokyo but plans to expand to other regions like Osaka and Nagoya. With the latest funding, the company plans to continue buying more homes and launch its mortgage brokerage service next year, aiming to increase its sales fivefold over 2021. It also intends to increase its workforce.

Sumutasu has purchased about 100 properties and is currently managing 30 property listings due to the smooth progress in sales, Ito told TechCrunch. The company is in partnership with more than 20 banks and renovation companies.

Existing funder World Innovation Lab (WiL) and new investor Mobile Internet Capital co-led Series B, with participation from other new investors Mercuria Investment, Carta Ventures and Kiraboshi Capital. Japan Finance Corporation led the debt financing.

“Although the iBuyer business has huge potential in terms of market size, we haven’t seen this business model in Japan for a long time due to its financial intensity,” said World Innovation Lab Partner Toshimichi Namba. “We are convinced that they [Sumutasu] can take advantage of this less competitive landscape to further fuel their growth. »

The company has a team of 30 people.

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