Stockhead: Bailador’s new investment PropHero bolsters tech portfolio
- Bailador reckons its latest investment PropHero offers exciting growth potential
- PropHero is an AI-driven property investment platform led by co-founders Mickael Roger and Pablo Gil Brusola
- Bailador invested $12.5m as part of a series A capital raise totalling $25m and is now one of largest shareholders
Special Report: Tech-centric capital fund Bailador believes its recent $12.5 million stake in AI-driven property investment platform PropHero offers growth potential in a huge global asset class underserved by digital transaction solutions.
Bailador Technology Investments (ASX:BTI) led a Series A capital raise totalling $25m and is joined by a global roster of sophisticated institutional and strategic investors including Fifth Wall, Samaipata, Opera Tech Ventures, AfterWork Ventures and Jelix Ventures.
In BTI’s latest investor update co-founders David Kirk and Paul Wilson said PropHero had many of the positive attributes BTI sought in growth-stage investments.
PropHero is helmed by co-founders Mickael Roger and Pablo Gil Brusola, who have strong expertise in AI and data science.
“Both co-founders remain highly invested in the company alongside Bailador as the largest individual shareholders in PropHero,” Wilson and Kirk said.
As part of BTI’s investment Kirk has joined PropHero’s board, with investment associate Jordan Martenstyn serving as a board observer.
Long runway for future growth
Kirk and Wilson said PropHero operated in a large global market, with millions of property transactions each year.
“Our analysis indicates that PropHero currently accounts for less than 1% of these transactions in each of their core markets, so there is a long growth runway ahead,” the founders said.
“PropHero’s digital platform guides customers through the entire end-to-end process of purchasing an investment property at an attractive cost vs. legacy buyer’s agents and other competitors.”
The founders said the digital platform provided an efficient and cost-effective solution for purchasing investment properties, and customer satisfaction was strong, with high reviews, word-of-mouth referrals and repeat usage.
Since its launch in 2021, PropHero has rapidly grown to more than 2000 paid customers and a run rate of $35m in revenue, with a 200% annual growth rate.
“Consumer satisfaction is very high for PropHero, evidenced by strong third-party reviews, high word of mouth customer acquisition, low customer acquisition cost and high repeat usage,” the founders said.
Source: BTI
Highly-scalable business model
The PropHero business model, according to the BTI founders, is highly scalable. Many customers return to purchase multiple properties and adopt additional services such as property management, mortgage and insurance brokerage.
Despite being a recent entrant, PropHero has gained traction in international markets, with Spain being a standout performer and opportunities for further expansion, particularly in the UK.
The rise of rent-vesting – where younger generations buy investment properties in more affordable markets while renting in expensive cities – gives PropHero a structural tailwind.
The founders said PropHero would use funds raised from the Series A capital raise to further invest in product development, expand its marketplace partner network, continue sales and marketing efforts and support international expansion.
Fourth new investment for BTI in past year
The investment in PropHero marks BTI’s fourth in new companies in the past year.
BTI invested $20m in telehealth platform Updoc in May 2024 and increased its investment by 50% to $30m in December following strong revenue growth and continued profitability.
In July 2024, BTI announced a $20m investment in fintech Dash. In October it had a follow-on investment consisting of $5m of equity and $5m of debt to fund Dash’s acquisition of complementary portfolio administration business IPS.
In August 2024 BTI invested $7.7m in high-growth fitness studio management software platform Hapana.
The company has also made follow-on investments in its other holdings and has deployed more than $75m in the past 12 months, achieving returns above internal valuations.
Careful, conservative approach paying off
Bailador’s strategy focuses on funding the expansion stage of tech companies with global opportunities, typically investing between $5m and $20m in high-growth sectors like SaaS, e-commerce, software and telecommunications.
The fund targets businesses with strong international and repeat revenue potential, helping them scale globally.
Bailador’s conservative approach involves close collaboration with portfolio companies to ensure solid valuations based on research and industry benchmarks, leading to above-expected returns.