Weroom

weroom

The rental market has been affected strongly by recent technology breakthroughs, and none have made such an impact as Airbnb, which has grown into a $10 billion business. That buzz has created excitement around similar companies, such as Weroom, which although different, seeks to disrupt the real estate market in the same way. CEO Thomas Villeneuve founded the company in Paris after a friend of his struggled to find an apartment.

“It all comes from personal experience, it’s hard to find a flatshare wherever you go, let alone find people to live with that you get along with. We want to make the experience fluid, simple, and comprehensive,” says Villeneuve.

With these goals, he established Weroom in June 2012, a site that resembles a social network that is part dating service and part real estate broker. New users fill out a short profile detailing whether they smoke, are vegetarian, or like pets, then Weroom matches them with apartments in their European city of choice.

The firm is developing a ‘freemium’ revenue model where renters can search and landlords advertise rooms on the site without paying. But for a fee, they will be able to access the Weroom+ service and receive tailored support from the company.

Weroom also plans to add e-commerce capabilities, letting users make payments through the website as well as manage lease transactions. Villeneuve estimates this will bring in €5 million by 2015. His ambition has already caught the eye of corporate investors, and last year, the company raised $5 million in series A round of funding from Nexity, a French real estate firm.

While Airbnb feels more like a professional letting service, Weroom puts focuses on pairing the right person with the right apartment. Its users are mainly young and mobile students or professionals who are looking for affordable housing in Europe’s great cities. According to Villeneuve, there are up to 15 million such people in Europe alone, where the rental market is worth up to $50 billion and $3.5 billion is spent each year on search fees.

However, the market for Weroom’s services is highly competitive. By creating a social network designed for apartment sharing, the company faces competition both from websites like Facebook as well as from established listing services like Easyroomate and Spareroom. Villeneuve hopes to differentiate Weroom by targeting the young jetsetters who move from city to city around the world.

“We really understand the need for one unique global solution, accommodating our users throughout their customer lifecycle, wherever they go,” he says.

Weroom still has a long way to go if it wants to rival AirBnb’s global footprint. International expansion is one of the biggest risks it faces. Next year, the company plans to launch in London and then Berlin. The government could also be a problem. As AirBnb is now finding out in the U.S., changes in the laws regulating apartment lettings could effectively shut down sites like Weroom.

Another potential threat is the difficulty of vetting the references of tenants and landlords. If Weroom is unable to keep out the bad apples, the whole system based on mutual trust could quickly break down and threaten the reputation of the service.

Despite these issues, a service like Weroom has the potential to gain a large slice of the residential rental market. As AirBnB has shown, it is possible to make real money in the so-called ‘sharing economy’.