Who wouldn't want a vacation house?
That's right. That's exactly what I thought.
Kocomo, a startup based in Mexico City, wants to make this dream a reality. It has now closed on $6 million equity financing and $50 million in debt financing to help it achieve that goal.
The company's goal is to facilitate cross-border ownership of luxury vacation homes. This goes beyond traditional timeshares. The founders of Kocomo, a mixture of Panamanian, British, Mexican and American nationals, want to revolutionize vacation home ownership by creating a marketplace that allows people to buy, sell, and own fractional shares in luxury homes. Kocomos mission, more simply put, is to make vacation home ownership a reality for more people.
It was founded in May this year. Recently, the beta version of its website was launched to engage clients on a waiting list.
Martin Schrimpff is the co-founder and CEO at Kocomo. We initially target Americans and Canadians looking to purchase a vacation home in Mexico or the Caribbean. Then, we will do the same in Europe.
AllVP and Vine Ventures led the equity portion of financing. This included participation by Picus Capital and Fontes QED and Clocktower Technology Ventures as well as JAWS, the family office of Barry Sternlicht, Chairman of Starwood Capital Group. Architect Capital provided the financing.
It is interesting to note that the founders of four Latin American unicorns, Mate Pencz, Florian Hagenbuch, Oskar Härtonsson of Cornershop and Carlos Garcia of Kavak, also contributed money to the equity round. Sergio Furio from Creditas was the fourth.
Many people were forced to reevaluate their ideas about work and life after the COVID-19 epidemic.
Schrimpffs's top priority was spending more time with his family and friends. He also increased his efforts to find a vacation house. He was disappointed when he began to explore options.
He said that buying a vacation home that I would only use for a few weeks per year and which I would have to manage was a wasteful, stressful, and outdated decision. It was also impossible to find a beach house in Mexico that I could afford.
It was not a good experience to rent an Airbnb year after another, with what Schrimpff called inconsistent quality and poor professional management.
So, he shared his frustrations with his co-founders and the idea for Kocomo was born.
Similar to Pacaso, an early-stage proptech company based in the U.S., the startups model is very similar.
According to Schrimpffs, the main difference between the models is Pacaso's focus on the second home market in areas that are less than an hour from the owners.
Kocomo's focus is more on cross-border vacation home owners, which can be as far as two to three hours away from their homes. Schrimpff also said that the problems and complexities faced by Kocomo are greater because they involve cross-border transactions.
A big difference between Pacaso and Kocomo is the fact that Kocomo allows owners to rent their weeks. Schrimpff added.
Kocomo plans to use a similar model to NetJets to offer people the opportunity to travel privately by using shared ownership.
Tom Baldwin, co-founder and CFO of our platform, said that it allows multiple people to share a luxury vacation home. This is the smarter way of owning a home overseas. A whole house is too expensive to buy for a few weeks per year. Renting is an investment, not an asset.
Kocomo is the co-founder and CPO Graciela Arango. It handles all legal and administrative aspects of home ownership. It buys the home via an LLC, vets qualified co-owners, distributes time equally among co-owners, and provides all the necessary services to maintain and manage the home. It also manages utilities, landscaping, and preventive maintenance.
Executives say that it differs from timeshares in that participants own a portion of the real property and not just time. If the property's value increases, so does an investor's investment.
The company intends to use part of its equity capital to increase its nine-person staff with a special focus on engineering, sales, marketing, and engineering. The company plans to invest in its technology platform. The debt capital will be used to purchase approximately 20 luxury vacation homes in desirable destinations in Mexico, close to international airports like Los Cabos and Punta Mita.
The company is also planning to expand its reach to other destinations within the U.S. such as Costa Rica or the Caribbean. The company also sees great potential in Mediterranean beaches, ski destinations, and cultural centers like Paris, London and Madrid.
Baldwin reports that Kocomo has also found a financial institution partner to provide financing for clients to purchase ownership interests in property on their platform.
While stealth mode startups tend to focus on increasing sales, our initial focus is to get from 0-10 qualified Kocomo co-owners. Our ticket size is over $200,000 so our sales cycle is more similar to a B2B startup.
Not surprisingly, Kocomo is finding that the majority of its early interest comes from the tech community. Pacaso also saw a similar trend.
Schrimpff said that this profile is ideal for our model as they are flexible with their schedules or can work remotely. They are also open to new models, particularly if it seems like a smarter way to become owners.
Antonia Rojas, AllVPs, stated that Kocomo is using technology to offer an evolving model of real property ownership. This taps into deep-seated changes made in the way consumers organise and prioritize work and family in a post COVID world.
The team's professionalism impressed the firm as well. Schrimpff founded PayU and sold it later. The global payments company is now owned by Naspers. Baldwin, a former Goldman Sachs banker, spent the past eight years in Mexico as a private equity and venture capital investor. Arango is a Harvard Business School graduate and worked previously at IDEO Silicon Valley. Brian Requarth is co-founder and non-executive chair. He previously founded Vivareal, a real estate classifieds company.
