Real estate startup Properly has laid off about half its workforce just months after raising $36 million in new venture capital.
CEO Anshul Ruparell announced the layoff of 71 people in a public blog post after hosting a general staff meeting on November 15.
Mr Ruparell called the move an “unbearable but necessary decision” in an emailed response to questions from The Globe. In his blog post, he wrote: “We are very sorry to take this step and I take responsibility for the choices that got us here. … Conditions have deteriorated much faster than we anticipated and we cannot predict when the market will recover.”
The types of workers laid off range from software developers, recruiters, data scientists, pricing analysts, real estate sales managers and mortgage advisers to some executives in charge of growth marketing and customer experience. Even Mr. Ruparell’s own executive assistant was in her crosshairs and a former employee announced on LinkedIn that she had been fired from her on her birthday.
Properly has established a number of supports to help former staff find new roles.
“I’d be surprised if people internally didn’t see this coming, or maybe not… because of the scale,” said Cam McWatt, who worked as a recruiter for Properly from September 2021 to July 2022 and saw the company rise. before. he was fired in a batch that included 10 other workers.
“Since I was there, we doubled the company; I joined at 70 and left at 140 [employees],” he said. “After a couple of months of the year there was a big slowdown, but at that point we were still hiring. Then, in the early spring, we realized that things were starting to change… the Hiring was slowing down, decisions were taking longer to make.”
On August 8, Properly announced that it had raised another $35 million from many of the same investors, including Bain Capital and Intact Ventures (the venture capital arm of Canadian insurer Intact Insurance), which had injected $44 million into the company. company in July. 2021.
According to some former employees, the company internally told workers that this new financing would extend Properly’s operational “runway” for up to three years and that no new layoffs would be necessary. That said, when it announced the financing, Properly’s leadership warned that it would halt its expansion into new Canadian markets as real estate activity cooled.
“We are now experiencing one of the most significant corrections in the history of the Canadian housing market,” Mr. Ruparell wrote in his dismissal announcement.
According to Mr. McWatt, before the slowdown there were signs that the business was struggling to find its way. “The roadmap would change quickly, we would always be exploring new opportunities,” he said.
Among them was a partnership with Canadian home renovation television duo Jonathan and Drew Scott, known as The Property Brothers (which may have led to some brand confusion, as Properly has never offered renovation services).
Proponly initially started life in 2018 in Calgary as a company called “iBuyer”, like the US company OpenDoor, which used data to buy undervalued properties to sell and resell, but switched to the hybrid buying model due to the weakness of the local real. real-estate market.
Among the company’s finances is a $100 million line of credit from Silicon Valley Bank to back what was once the company’s key market offering, known as a sales guarantee, which would allow customers to tap into the equity in their homes. to complete a real estate purchase with a guarantee that Properly would purchase your initial home at a prescribed price if no other buyer could be found.
As real estate markets in Canada slowed in 2022 due to rising interest rates, some of Properly’s former employees (who declined to speak officially) say real estate salespeople who work with the company started to downplay or omit any mention of sales warranties at all. Ruparell declined to answer questions about whether Properly was forced to use its own funds to buy houses in 2022, though in 2021 he claimed that hadn’t happened yet.
Properly and Mr. Ruparell declined to comment on the future of the sales guarantee program, or whether the company was turning again to a new business model.