SimpleShowing

Early Stage

The new way to tour and buy a home

Analytics

Raised to Date: Raised: $190,440

Aggregate Commitments $

Platform

Republic

Start Date

03/26/2021

Close Date

07/31/2021

Min. Goal

$25,000

Max. Goal

$1,070,000

Min. Investment

$100

Security Type

SAFE

Funding Type

RegCF

Series

Series A

Valuation Cap

$16,000,000

Discount Rate

10%

Rolling Commitments $

Status
Funded
Reporting Date

08/01/2021

Days Remaining
Funded
% of Min. Goal

762%

% of Max. Goal

18%

Likelihood of Max
Funded
Avg. Daily Raise

$1,500

Momentum
Funded
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Location

Atlanta, Georgia

Industry

Real Estate & Construction

Tech Sector

Proptech

Distribution Model

B2C

Margin

High

Capital Intensity

Low

Business Type

Growth

SimpleShowing, with a valuation cap of $16 million, is raising crowdfunding on Republic. SimpleShowing is an innovative and new way to tour and buy a home. The home buyers initiate showings according to their convenience, without paying any cost for the tour. They are also entitled to a share in the commission equalling 1.5% of the home price. SimpleShowing is the real-estate for the modern world. The company was founded by Fred McGill and Jeremy Gamble in January 2018 and has raised over $1.6 million in previous rounds of funding. The current crowdfunding round has a minimum target of $25,000 and a maximum target of $1,070,000. SimpleShowing already has monthly revenue of $100,000, with a 140% user growth and 41% compound annual revenue growth since 2018.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$578,479

$392,174

COGS

$0

$0

Tax

$0

$0

 

 

Net Income

$-399,086

$-334,111

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$735,552

$148,445

Accounts Receivable

$0

$0

Total Assets

$800,824

$192,800

Short-Term Debt

$520,092

$14,484

Long-Term Debt

$0

$463,322

Total Liabilities

$520,092

$477,806

Financials as of: 03/26/2021
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
SimpleShowing 07/31/2021 Republic $16,000,000 $190,440 SAFE Funded RegCF
SimpleShowing 10/15/2019 Republic $8,000,000 $1,070,000 SAFE Funded RegCF
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Ratings

Analyst Report

Synopsis

The real estate market is vast and has many working parts. Each of these, over time, has been susceptible to the continuous forward march that comes with technological progress. What used to be a very local, agent-oriented business model turned into a national one dominated by the online search for real estate. Other advances have modernized the industry as well. However, one niche within the space that has been largely untouched is the touring and showing process. By and large, individuals who wish to see a property in person often have to go through an agent to arrange a visit. This aspect preserves the necessity of agents and the resulting commissions that hurt both the buyer and seller of the property. 

One company that is dedicated to shaking up this niche is SimpleShowing. At this time, the company is primarily focused on two different features. The first is called Self-Tour. Through its mobile app, the company allows individuals to book a showing with a property that is listed for sale. Instead of engaging an agent, the notice is sent directly to the homeowner who can approve or deny it. If approved, the person who booked the appointment shows up at the appropriate date and time. They then plug a code into a lock and are let into the property. All users of the app are ID-verified, easing safety concerns. 

The second feature that SimpleShowing is working on is called Toura. In launching its Self-Tour, SimpleShowing discovered that there was demand for this kind of service from non-home buyers. This included third party agents, brokers, and regional multi-listing services. In short, Toura can be viewed as the B2B equivalent of Self-Tour. 

SimpleShowing has already identified ways to generate revenue from this business model. When a home is sold through the platform, it charges a commission just like an agent would. It does, however, give what would be 50% of the buyer’s commission back as a refund. On average, this works out to around $5,800. This leaves around 1.5% of the sales price of the property as revenue for the business. It is also worth noting that users of the app can search and book across all brokerage listings in the five markets in which the company operates: Dallas, Atlanta, Tampa, Miami, and Orlando. 

Heading into the future, SimpleSource has plans for other revenue sources as well. One example is a title insurance vertical. In this vein, the company has partnered with another startup called Expetitle Exchange. It also plans on launching its own mortgage offering in the foreseeable future. However, specifics have not been provided as to what that might look like. 

SimpleShowing’s current raise has been rated a Deal to Watch by the KingsCrowd investment team.

Price

SimpleShowing is offering a SAFE that will convert into equity in the future subject to a 10% discount to the company’s future value. The valuation is set at $16 million pre-money. While that amount might seem somewhat high, SimpleShowing has had good early traction. Taking revenue into account, this price is slightly lofty but not out of the question. Thus, SimpleShowing’s price score is above average.

Market

Some companies operate in only one market. SimpleShowing appears to operate at the intersection of three market niches within the real estate space. The first of these is the agent commission space. In essence, the bulk of the company’s revenue comes from replacing agents. According to one source, agents in the US generate commissions worth about $75 billion every year. Since the company gives half of this figure back to the buyer, its potential market size is smaller. SimpleShowing’s market potential is further restricted by the fact that the commission figures calculated assume a commission rate of about 4.86%. That figure is down from around 6% seen in the 1990s, but it is higher than the 3% figure charged by SimpleShowing. Altogether, the actual market size for the business is probably closer to $23 billion. 

The other market that SimpleShowing operates in is the title insurance market. One source that pegs this figure at about $15.3 billion for the 2019 fiscal year, up 6.5% from the year prior. Lastly, it looks as though the company is getting into the mortgage origination space. If this is true, then the overall market seems to be about $4 trillion in size just for the US. However, this figure is not all it appears to be, as this is the volume of the mortgages made out each year. It is not what the company would ultimately generate as revenue. Certainly, this piece of the market would be large, but nowhere near what the overall market size suggests. 

While the market sizes that we’re looking at are significant, their growth rates tend to be moderate most of the time. Home buying and selling is cyclical, and the number of properties should not grow much more, if any, than the general population growth. Add to this that the individual niches are not tremendous in size compared to other markets, and it should not be surprising that SimpleShowing’s market score is about average. 

Team

At the head of SimpleShowing are its two co-founders. Fred McGill Jr. also serves as its CEO and managing partner. In the past, McGill has served as an official member and contributor on the Forbes Real Estate Council. Prior to that, he was a Vice President of Marketing and Business Development at Redox. He led and managed sales operations, customer acquisition, and similar activities at that company. Prior to that, he was a Senior Account Executive at Salesforce.com. 

The other key team member is Jeremy Gamble, SimpleShowing’s COO. His professional experience appears rather limited. In fact, the only prior experience listed is his role as Vice President at the Orlando Health Foundation. In all, this founding team illustrates some familiarity with the real estate market. However, the credentials are not stand-out for the industry, and there is little entrepreneurial experience. As such, SimpleShowing’s team score is only slightly above average.

Differentiators

One category that SimpleShowing is a little stronger in is differentiation. The company’s business model it’s fairly unique compared to other players. For the most part, it is competing with traditional mortgage agents and brokerage firms. There are, however, some companies that are more similar in nature. One of these is a player called knock. Like SimpleShowing, knock offers automated, self-guided showings. But it has no lock box integration. And it is unclear if it has any B2B component. Other players include Reali, Homie, and REX. However, they cater to different aspects of the real estate experience. For instance, Reali allows users to buy and sell properties through their app. Homie connects users to real estate agents. And REX is similar to Reali. There are other companies out there that could become competitors. Zillow is one example. However, it appears as though the business model pushed by SimpleShowing is largely unique at this time. Because of this, the company’s differentiators score is strong. 

Performance

In most respects, SimpleShowing rates highly for performance. The company already operates in five markets across three states. It has strategic partnerships in place, including an arrangement with Expetitle Exchange. During 2020, the company saw 4,243 new users and signups on its platform, up from 2,513 in 2019 and just 734 in 2018. SimpleShowing is aiming for 5,700 new users this year. While this may not seem like much, consider that it has already seen more than 2,500 property tours booked on its platform. Additionally, 61% of its users end up buying a home through the platform. In 2018, this resulted in revenue of $392,174. That figure grew to $578,479 in 2019. Official figures for 2020 have not been provided yet, but management has made the claim that 2020 saw revenue of $776,000. 

Admittedly, not everything is great. The company did generate a net loss of $334,111 in 2018 and $399,086 in 2019. Operating cash outflows have been similar in size. Overall though, the company’s performance has been robust. Therefore, SimpleShowing’s performance score is its highest across all five metrics.

Risks

There are certain risks that investors need to be aware of. However, the overall risk profile of SimpleShowing looks favorable. There were two main categories that appear elevated. First, there are the investment terms. A 10% discount upon conversion is not all that generous. Usually, investors would expect 20%. In addition, while the price of the company is not outrageous, $16 million on a pre-money basis is a bit lofty. Even so, the risk profile here looked only average. 

Real estate is, however, a highly cyclical market. While the company plans for multiple revenue streams, none of them appear significant in size. Additionally, mortgage products have seen continued downward pressure in terms of commissions for decades. It’s never great to participate in a race to the bottom. Because of this, SimpleShowing faces ample market risk.

Bearish Outlook

For the most part, SimpleShowing looks to be an attractive prospect for early-stage investors. However, not everything about the business is great. The team is roughly average. The market rating is about average as well. Additionally, some of its investment terms could be better. Additionally, the company continues to generate net losses and net cash outflows. Ideally, growth will eventually fix this, but that could be said of any business. The key is whether the company can survive long enough to grow to that point. 

Bullish Outlook

On the bullish side of the equation, SimpleShowing has a lot of good things going for it. The price of the company is not outrageous given the traction that it has generated. It has a clearly differentiated product relative to competition. Though, a case could be made that it wouldn’t be difficult to replicate this business model. The performance of the company so far has been impressive. It has identified multiple revenue avenues, and its performance has been solid while operating in just five markets. That leaves a lot of opportunity for expansion, especially when you consider that its B2B Toura platform would eliminate the need for a real estate license.

Executive Summary

Putting everything together, SimpleShowing is an intriguing company that has proven itself so far. Management appears to be on its way to growing the firm further, and that should create upside potential for investors. In the long run, the risk/reward profile of the company looks appealing, making it a Deal to Watch.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com

Analysis written by Daniel Jones. 

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