A Challenging Climate for Proptech

The world of property technology, often referred to as proptech, has witnessed another setback. Here, a startup known for its innovative approach in the fractional short-term vacation rental market, has announced the closure of its investment platform. This decision comes after just over two years in operation, a period marked by economic hurdles and fluctuating interest rates.

The Journey of Here

Based in Miami, Here had secured a commendable $5 million in funding. Despite this financial backing, the company made a significant announcement on its website on January 3. Citing the current interest rate environment and economic conditions as primary reasons, the platform was declared closed. The initial seed funding, amounting to $3.5 million, was led by Fiat Ventures in July 2022, as reported by Crunchbase. The startup’s investor portfolio was diverse and included names like Joe Montana’s Liquid 2 Ventures, Mucker Capital, and Bragiel Brothers.

Financial Struggles and Future Plans

The company’s financial challenges were evident. A report filed with the U.S. Securities and Exchange Commission showed a net loss of $56,374 from its properties in the first half of 2023. However, it wasn’t all bleak, as the company did generate $276,233 in revenue during the same period. The burden of interest payments, totaling $166,305, and other expenses of $58,920, however, overshadowed this revenue.

In a statement, the company emphasized that only the fractional investment platform was affected. Other aspects of Here’s operations are set to continue as usual, although specific details about these operations or potential staff layoffs were not disclosed.

Here’s Legacy and Future

Founded in July 2021, Here did not begin its operations until 2022. The company made a mark by offering investors a chance to partly own vacation rental properties, managing the entire property process. The unique proposition allowed members to earn from their investment and enjoy property appreciation potentially. What set Here apart was its accessibility, offering shares for as little as $1, thereby lowering the investment threshold in vacation rentals.

Corey Ashton Walters, CEO and co-founder, who also co-founded Homeworthy, was at the forefront of this initiative. Fiat Ventures’ managing partner, Marcos Fernandez, praised Here’s efforts to democratize vacation rental investments, a domain typically dominated by the affluent.

The Wider Impact of Rising Interest Rates

This closure is part of a larger trend influenced by soaring interest rates over the past two years. This economic climate has been challenging for proptech startups. For instance, Frontdesk, another short-term rental provider, recently laid off its staff and is nearing closure. Similarly, Zeus Living faced shutdown after raising substantial capital.

Continual Evolution in Proptech

Despite the setbacks, Here remains operational and is exploring new avenues. The situation underscores the resilience and adaptability required in the ever-evolving proptech landscape.