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Openland, a messenger for real estate professionals, launches with $2.25M

The company graduated from Y Combinator this past winter

Financial trends and news by Steven Loeb
August 30, 2018
Short URL: http://vator.tv/n/4bfe

Editor's note: Save the date! We're hosting our inaugural Future of Real Estate salon on Oct. 25 to take a deep dive into tech innovations changing the way we live and work! Joining us will be Amit Haller, co-founder and CEO of Reali, Gary Beaseley, co-founder and CEO of Roofstock and more. Check out the event.

There are two types of messaging apps. First you have the consumer facing ones, like Facebook Messenger, WhatsApp and Line, which have mass appeal, and which are all about getting people to spend more time in-app. Then you have an emerging category of those messaging apps aimed at professionals in a specific industry.

For example, we've seen those kinds of apps in the healthcare space, where doctors can connect with patients, but an app like that didn't exist for the real estate space. That's why Openland was founded, to be a professional messenger for the professionals, including land owners, developers, even city officials, who are involved in real estate deals. 

The company, which came out of a month-long beta period on Thursday, also announced new funding round of $2.25 million from a group of 30 investors, which included Gagarin Capital, Sinai Ventures, Soma Capital, Liquid 2 Ventures, Rainfall Ventures, and Y Combinator.

Founded in 2017, the San Francisco-based company graduated from Y Combinator this past winter. The platform includes invite-only communities to share insider knowledge and market data, as well as the ability to publish, distribute, and discover listings and cross-organization chats to facilitate deals.

"We see that the messaging apps have really transformed all kinds of personal communications, speeding them up, and we now see even messengers who accelerate other industries, such there are a lot of messaging companies doing healthcare, communicating through patients and doctors, but there was nothing, no widely used messenger, for real estate," Yury Lifshits, CEO and сo-founder of Openland, told me in an interview.

"That’s what we’re building, we’re building a messenger app and primarily it serves the use case of making new connections. So connecting the owners to real estate developers who can buy the land and then develop it, connecting real estate developers to investors, so maybe non-traditional financing partners and so on."

In its beta period, the company also has seen its products being users to help collaborate existing projects, which has meant that users are sending things like offer letters, contracts, payments and escrows. Openland plans to lean into this use case even further by offering them more tools down the line. 

"We’d like, over time, to add a lot of those professional tools inside the messenger app so that you can do all kinds of interactions right from your phone and through a few clicks of the button. Making complex interactions as they previously were, requiring multiple software tools and multiple meetings, being super straight forward right in your primary communication tool," Lifshits said. 

Finally, the company hopes to use the platform to formed communities and groups, and group conversations, as a way of opening up deals so that they're less exclusive than they are right now. 

"With a lot of real estate deals, there is a natural tendency to form invite-only closed communities that share deals and share new opportunities, share insights about certain sites, and certain new regulations and things like that."

Right now Openland is only available on the Web, though it does eventually release a mobile app as well.

Don't expect electronic signatures on Facebook

There's a clear difference between a platform like Openland and something like Facebook Messenger, not just in what they offer, but also in their business model.

"There are companies like Facebook, whose business model is fundamentally advertising. Therefore, they are interested in having users spend more time in the app. And therefore they tend to add video and a news feed and entertainment content and things like that. So they guide the applications towards more time spent and also as wide appeal as possible," Lifshits explained.

Openland, on the other hand, plans to eventually deploy a business model where it will charge its users to access some of its features; however, it does still plan to keep a free version as well.

"When you charge your users you deliver business utility, so you optimize the experience toward making more contracts signed, making more business connections that ultimately will result in a transaction, making transactions happen faster, measuring how fast the transactions happen because of the app, knowing when the two parties discovered each other, knowing when they signed the docs, introducing electronic signature," he said.

"I don’t expect electronic signatures to be a big part of Facebook Messenger any time soon, not because they couldn’t do it but because they prioritize different things. They are an advertising driven company, they maximize daily active users, they collect user’s time spent in the app, the amount of content consumed, number of likes users give each other for content, and so on."

Rather than putting itself up against consumer-based messaging platforms, then, Openland compares itself more to services like LinkedIn Messaging, Slack and Microsoft Outlook, but there are still key differences in each of those cases as well.

Slack, for example, doesn't easily allow people from different organizations to communicate, which is important in real estate when there are so many parties, including land owners, real estate developers, brokers, city officials, lenders and banks, all involved in the transaction.

"We have a built a tool for cross organizational communication, and making it easy to connect and create these private conversations across organizational borders," Lifshits said.

Microsoft Outlook, meanwhile, is an e-mail client, and there's a difference between the culture for how to communicate on e-mail versus on a messaging platform. 

"The difference between e-mail and messenger, in my mind, is e-mail has the culture, especially in industries like real estate, the response time is three days. You write an e-mail, you wait three days to get an e-mail back and then again and again. To have a three round conversation takes a few weeks. While instant messaging, especially with mobile apps, and with templates, that can be hundreds of messages over a few hours or minutes," he said.

"We’d like to build a communication tools that allows you to talk to hundreds of organizations in parallel, and have dozens or hundreds of messages back and forth a day, most of them from mobile phones, most of them on the go, like from the airport, like when you’re waiting for next meeting or you’re just bored. So filling in these little gaps of the time in the work day. Also automating anything, or simplifying anything, that can be simplified."

Finally, there is LinkedIn Messenger, which he said, "could be a fantastic messaging product for professionals across all industries," but he believes that the company isn't taking advantage of the opportunity, leaving an opening for a company like Openland to fill that need.

Cutting real estate deal times in half

The new funding will be going toward growing the team, specifically those who will work on the product, like software engineers, product managers and designers.

"We’re a very product oriented company. We believe that real estate as an industry deserves the best professional tools they can ever have and we think that for a long period of time the real estate industry didn’t have the best software engineers building the tools for them. My co-founder is Steve Korshakov, who was the lead developer over at Telegram, one of the best messaging apps in the world with 200 million users. We have a world class team here now, Steve recruited some of his most respected colleagues. So the funding goes definitely to the team to building the best app, the most modern design and functionality and load times and speed," said Lifshits.

The company has 10 employees right now, many of whom were added recently, and the company plans to add a few more in the next six months of so, but it doesn't have plans to grow the team all that quickly. 

"The best messengers, like WhatsApp, when they reached hundreds of millions of users they were 35 people or so, Telegram was 10 to 20, so we’d like to say small for a long period of time."

The long term goal for Openland is to cut the life cycle of real estate projects in half, from the typical five years it now takes to go from a site being offered to construction starting.

"I’d like that to be two years. Or if it’s two years then I’d like it to be one year, and it’s one year then I’d like it to be six months," Lifshits explained. 

"Everything that happens before the construction starts is some sort of administrative process. Some sort of, ‘I need to get financing, I need to create a financial model, I need to get the bank loan, I need to convince my partners at the real estate firm, I need to get an architect to do a draft, I need to do an environmental impact study.’ So there’s all those administrative processes, so if every step would go through messaging, go through mobile apps, through instant back and forth communication, then we can see that the real estate business moves faster. That’s what we hope to achieve is making the industry projects happen faster across every step of the life cycle."

That's the eventual goal, but, for right now, Lifshits says he will be enjoying the moment when Openland is still in what he calls its "romantic period."

"When a new social network, or a new messaging app, comes to market, there is a romantic period. What I mean by romantic period I mean the most forward looking, early adopters join the platform and there is a sense of trust and excitement and there is a sense of, ‘Let’s help each other and let’s share deals.’ Early LinkedIn was a collection of very bright people who connected and started helping each other be more informed about who is doing what and who is looking for jobs. Early Facebook was very romantic because people got more easily connected, they were very open to sharing stuff. Then they got lots of spam and lots of brands and then people felt less secure so people started sharing less. Every social network that comes to exist has this early renaissance, this early feeling of excitement," he said.

"I hope that with the launch of Openland we get the better sense of community in the real estate industry, so people will be more reachable, more willing to answer questions, more willing to help each other, more willing to share interesting deals and interesting, more willing to help each other. And then it will be our job to preserve that sense of community as long as we can. I look forward to this moment."