By Dan Blystone, May 27, 2021
Carlos Pierre is the founder and CEO of Badi, a new generation AI-powered rental marketplace. With +3M users, Badi connects tenants and landlords through matchmaking and allows anyone to post, search, chat and rent securely in record time. Since its launch, Badi has reached a milestone of 600,000 rental listings and 6M matches. A leader among Barcelona startups, the company has raised over $46 million from US and international investors including Spark Capital, Goodwater Capital and Mangrove Capital Partners.
How did you first come up with the idea for Badi?
After graduating in Business Administration in Barcelona, I worked as an auditor at PriceWaterHouseCoopers. I came up with the idea of founding Badi when I was starting to look for a place to rent in the city centre of Barcelona. I was surfing the internet and could only find poor quality listings of flats to rent, which weren’t affordable at the time.
Then, I decided to look for a flatshare and I realised there was a lack of focus on the social component. That’s when I had the idea: create a platform which offers affordable, good quality room rental supply and matches it with verified tenants through a marketplace that focuses on matching social profiles while providing an awesome user experience. At the end of the day, people want to match and chat with people online before making the move to rent their flats.
I created Badi with the mission of improving the room rental experience across the globe, by developing a platform that makes the entire process more transparent, seamless and secure. Today, we are amplifying and extending our supply with not only room rentals but entire apartments to give a response to the growing demand of our users.
How does Badi use AI to recommend compatible flatmates?
Badi uses behavioural data, personality traits and images to recommend compatible flatmates to listers.
The recommendation system can predict matches before they even happen in person and makes the process of the flat hunting much faster and easier.
To make it happen, we have both developed and deployed 8 machine learning algorithms with the ultimate goal of maximizing the probability of match between landlords and tenants.
How does Badi address issues such as user security and trust?
Badi has launched different algorithms, including one that detects and prevents fraud. Ensuring the safety of our users is our top priority.
- Our built-in inbox feature means you never have to give your personal contact details to strangers on the internet.
- When you make a payment through Badi, you know where your money is going. The payments are processed in a secure online environment.
- You’re protected by our guarantee whenever you book your room directly on Badi.
- We use automated systems that detect fraudulent behaviour and alert our Trust and Safety team to quickly act upon it.
Beside this, we have an inhouse CX support team who is always available to address issues that might arise.
Can you talk about how Badi is going beyond the matching of users to digitizing the entire rental experience?
Since our creation in 2015, we have been able to match more than 6M people. Beyond the matching of users, we keep working on digitalizing the rental experience and allow people to reserve their rooms in a secure and safe environment. For us, the best sign that we fulfill our mission is when we make the rental experience a safe, simple and transparent process. That being said, we are currently extending our model and amplifying our offer with full rental apartments to respond to the growing needs of our users.
One of the major ‘pain points’ for renters is the security deposit. Can you tell us about Badi’s deposit-free option?
After launching a survey, we found out that almost 70% of the users who share a flat had problems paying the deposit and were even forced to request financial assistance. In this context, we decided to introduce a new feature “deposit free” during the pandemic that covers a part of the financial commitment that a tenant has to make to enter a flat.
You are now present in multiple cities globally. Which has been your fastest growing market?
After Spain, our fastest growing market is London.
Can you explain how Badi makes money and plans for future monetization?
Badi monetizes through 3 different revenue streams: a transaction fee, unlimited matches access, visibility and recommendations.
How is your strategy shifting, now that it appears that the worst days of the pandemic are behind us?
Now that the pandemic is behind us, we decided to come back to our roots, placing the matching at the forefront of our business. We will apply this technology to the apartment rentals vertical we are launching.
Can you comment on the rise in population, along with the rise in property prices, in major cities across the globe? What does this tell us about the need for sustainable urban housing?
While more people come into the world every day, the size of the earth remains exactly the same. We urgently need to create more living options for people to suit all budgets and lifestyles, and tech is the only way to make supply meet demand. The supply of urban housing is scarce worldwide: 54% of the world’s population of 7.2 billion live in cities, and by 2050, this is expected to increase to 66% of a predicted world population of 9.6 billion – according to data taken from the United Nations global urbanisation report.
What is your view on a cap being placed on rental prices? Is this a viable solution to the issue of the affordability of urban housing?
It has already been tested in different countries and the result has been a reduction in available rental supply and prices increase.
What has Badi’s experience been like so far in New York and how has it differed from European cities?
Badi is currently giving priority to European markets (Barcelona, Madrid, London and Berlin) after the crisis caused by Covid-19. For this reason, we made the decision to close our offices in New York till the pandemic is fixed.
What is your view on managed coliving space providers, such as Starcity and Common?
Co-living is a new housing concept that has a long way to go and provides a living alternative in big cities, especially for their floating population that will grow again after the pandemic. In the future, there will be colivings that will create specialized spaces depending on the type of community they host (eg: a building for entrepreneurs with homes, offices and networking areas, or a building for athletes with spaces for training, rest and healthy food..) to give a high quality of life to their tenants.
Can you talk about your experience raising capital and provide some advice that other startup founders might find useful?
We have raised 5 rounds (the first round was 30,000 euros) from the beginning to attract talent and expand faster. We wanted to raise 300,000 euros in the first round but my network was small. We prepared a deck and presentation that I sent to different investors, I got to send 98 emails and only 90% answered.
In our case, it was very difficult to raise with Spanish funds since we did not have a proven business model. I was lucky enough to meet the founder and CEO of Mangrove Capital who lived in Barcelona with his family. My focus has been with European and United States funds.
My advice to the entrepreneurs would be to first understand what the investor that you reach out to is looking for. If the investor is interested and has funds, they usually make a decision quickly. They invest in the team and the vision of the company. Before a Series B funding, it’s important to focus on financials, unit economics and well-matched projections.
In this recent interview with Àlex Rodríguez Bacardit of Startup Grind, you touched on the concept of an ‘Airbnb for mid to long-term rentals’. Could you expand on this a little?
We want to become a world-wide solution for mid to long-term rentals as Airbnb did in the vacation market. We have many similarities such as profiling, reviews, online bookings as well as a core focus on supply quality. Our aim is to become the new generation rental marketplace.
Thank you again for participating in this interview Carlos. We wish you and Badi every continued success moving forward!