Kocomo has raised $ 56 million to advance his mission of democratizing owning a luxury second home in popular vacation destinations like the Caribbean and Mexico.
While timeshare can still conjure up images of Las Vegas sellers and the early 2000s, a new startup is hoping to give the concept a modern and luxurious update.
Mexico City-based Kocomo launched earlier this year but has already raised $ 6 million in equity and $ 50 million in debt from investors interested in its product: jointly owned luxury homes in popular vacation destinations, just one short flight from the US.
Everything is very new – the company quietly launched in May with a beta version of its website being shown to a small group of waiting list customers – but already has dozens of high-comfort perks valued at $ 1 million to $ 4 million in which people can buy for a fraction of the property of around $ 250,000.
“I have three children and use Airbnb a lot, but it didn’t allow me to create memories in one place while buying an entire house straight away and only using it for two or three weeks a year, made no sense.” Martin Schrimpff said Inman. “We saw the opportunity to do something different and tap into an almost entirely new asset class of people [in between those] who only rent and buy the real estate directly. “
The idea that Schrimpff and his co-founder Tom Baldwin came up with during the pandemic is to democratize the idea of the vacation home so more people can have access to one without paying the price of $ 1 million and more for a luxury Caribbean property. Unlike a traditional timeshare, however, the shares are actually owned and not sold as a “right of use” to the buyer. This enables buyers to accumulate equity as property values rise, while also renting the weeks they are not using as additional income.
“Timeshares get a bad rap for a reason: they don’t actually own the underlying property and the resale market is terrible, while rentals of this type of property can cost anywhere from $ 15,000 to $ 20,000,” Baldwin said. “That’s how Martin and I started thinking about the world of vacation real estate and creating an opportunity for people to go on vacation that connects them emotionally, but also makes financial sense.”
One such product is a competitor to Pacaso, the second home startup that former Zillow executives Spencer Rascoff and Austin Allison launched in October 2020 and raised $ 75 million in funding in March. Schrimpff said their unique selling proposition is that the homes they have bought are outside of the United States and not in places a short drive from their primary residence.
“Our goal is to facilitate these cross-border transactions,” said Schrimpff. “We know we know Mexico well and want to build trust between Canadians and Americans who want to buy and who need a trusted company to help them make that purchase.”
Property can only be shared by one other family or up to eight others. Kocomo buys the houses through an American LLC, divides the time between the co-owners and takes care of the necessary upkeep and maintenance. They also allow the owners to rent out their unused weeks for additional income, while Pacaso limits the use of the properties to the co-owners. Once a year, the various shareholders choose the desired weeks – the system ensures that every owner has access to both the high season and the low season.
Right now, Kocomo is looking for investor money to buy 20 homes across the board in Mexican cities like Los Cabos, Punta Mita and Tulum. The company’s target audience is high-earning people aged 35 and over – people with children who typically plan the same vacation year after year but may not necessarily want to deal with the high costs and high real estate fees of a second home.
“Typically, partial ownership was taken by developers who cut it to pieces, charged fees that weren’t completely transparent, and added too much margin,” Baldwin said. “That’s what we’re trying to disrupt because we believe that co-ownership will really take off around the world if done right.”
AllVP and Vine Ventures jointly ran the equity, while Architect Capital financed the debt. Further investors are Picus Capital, Fontes – QED, FJ Labs, Clocktower Technology Ventures and JAW as well as the Latin American startups Loft, Cornershop, Kavak and Creditas.
Email to Veronika Bondarenko