Photo by Errich Petersen
OJO Labs on Wednesday announced a $62.5 million round of funding and the acquisition of Movoto, a residential real estate search site.
“It brings together two superpowers overnight,” said John Berkowitz, CEO, and Co-Founder of OJO Labs.
Austin-based OJO Labs, founded in 2015, has been working for the past five years to create a deeply personalized technology and engaging consumer experience, Berkowitz said. The acquisition of Movoto enables OJO Labs to scale rapidly and bring its technology to millions of homebuyers and sellers, he said.
The Austin VC and tech ecosystem led to the new round and the acquisition, Berkowitz said.
Krishna Srinivasan, a general partner at LiveOak Venture Partners and an investor in OJO Labs, introduced Berkowitz to Russell Valdez, chief investment officer for Wafra, who lives in Austin. Wafra, the investment platform with $25 billion under management, led the round with participation from Breyer Capital, LiveOak Venture Partners, Royal Bank of Canada, and Northwestern Mutual Future Ventures.
“The way people buy and sell homes is changing,” Jim Breyer, Founder and CEO of Breyer Capital, a premier venture capital firm, and former Facebook and Walmart board member said in a news release. “This evolution has been expedited by recent events, and the real estate industry is on the cusp of something new in the wake of COVID-19. With a clear vision for the future and the technology to back it up, I believe OJO Labs is poised to be a leader in the next era of the homebuying industry.”
OJO Labs raised $45 million last March with the goal of hiring more people and deploying its platform to as many people as possible. In that process, Berkowitz came across Movoto, the only privately held company at the scale that they are at, Berkowitz said.
“The Movoto team culture, vision all matched,” Berkowitz said.
OJO has created a virtual assistant that helps homebuyers and sellers. Its agent uses natural conversations conducted via mobile messages to help a person find a house. Movoto is “the fastest growing top 5 residential real estate search site in the U.S. with nearly 24 million monthly visits,” according to the news release.
Movoto allowed OJO to leap to scale, Berkowitz said.
“We’ve been solving really hard technological problems for the last five years with end to end solutions,” Berkowitz said. “We’ve been building it to be able to scale.”
Now with the acquisition of Movoto, we’ve got a massive at scale real estate website with personalization, Berkowitz said.
“This is something that hasn’t existed in real estate before,” he said.
“Buying and selling a home is complex and high stakes, yet homebuyers are left to navigate much of the journey on their own,” Imtiyaz Haque, CEO of Movoto said in a news release. “We’ve come together to create a solution that guides consumers every step of the way, driving homebuyer, and seller readiness and more confident decision making.”
To date, OJO Labs has raised $138.5 million and Movoto is its third acquisition. Last October, OJO Labs acquired Austin-based RealSavvy to create an even bigger platform for real estate brokers, agents, and teams and the customers they serve. And in 2018, OJO Labs merged with real estate data giant, WolfNet Technologies, based in St. Paul, Minn.
The collective company now has about 350 employees. Movoto, based in San Mateo, California, will keep its office there, although some of those employees may move to Austin, Berkowitz said.
Right now, during the Pandemic, OJO Labs’ employees are working remotely. It has about 100 employees in Austin.
Last August, OJO Labs moved into a beautiful new office space at 1007 South Congress Avenue in the CityView Building and the employees got to enjoy the office for a short time, Berkowitz said.
“We’re excited to get back to it,” he said.
But COVID-19 has forced OJO Labs to adapt and evolve, he said. OJO also has offices in St. Paul, and on the island of St. Lucia in the Caribbean. It was easier to turn its U.S. operations remote than it was for the St. Lucia operation. But everyone is working remotely now, Berkowitz said.
And the demand for OJO Lab’s product has been skyrocketing during the Pandemic as people are forced to stay home. Many of them have turned to real estate sites to find a new home with the amenities they want like a home office, backyard, bigger kitchen, swimming pool, etc.
“If we were a publicly-traded company, our stock would be like Zoom,” Berkowitz said. “Every metric is up and to the right.”
“There is a trend that happens in real estate – over the holidays and end of the year – people spend a lot of time packed in at home with their families,” Berkowitz said. That is for just two weeks over the holidays and it leads people to search for real estate, he said. That trend is exacerbated during the Pandemic.
“The reality is there is a real shift in how people think about the home and the wholistic nature of it which is great if you’re in real estate,” Berkowitz said.
Also, during the Pandemic, OJO Labs helped other companies get Paycheck Protection Program loans through the Small Business Administration even though OJO Labs didn’t take a PPP loan itself, Berkowitz said.
“We are serious about leaning into social injustice,” Berkowitz said.
“Even in our darkest day, that money wasn’t meant for us,” Berkowitz said. “I didn’t want to be part of other companies taking the money that was meant for others.”
OJO Labs knew it was going to get through the Pandemic and thrive, Berkowitz said.
“That’s no fun if we thrive but I can’t get a margarita at a restaurant because they didn’t get PPP money,” he said.
OJO Labs wanted the money to get into the hands of businesses that needed it more than they did, Berkowitz said. OJO Labs partnered with Keystone Bank to help other businesses in Austin get PPP loans and it also helped those businesses navigate the process and answered their questions.
“It’s in crisis when people are tested, we showed up for work and did our job,” Berkowitz said.
Operating a company during a Pandemic is hard, Berkowitz said. Operating a company and doing good, raising money and buying a company is really, really hard, he said.
But that’s exactly what the team at OJO Labs has done, Berkowitz said.
“I’ve asked them to do the impossible and they delivered,” he said.