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 a 71-person layoff in a public blog post after hosting an all-hands meeting with staff on Nov. 15.
Mr. Ruparell called the move an “excruciating but necessary decision” in an e-mailed response to questions from The Globe. In his blog post he wrote: “We’re very sorry to be taking this step, and I take responsibility for the choices that brought us here. … Conditions have deteriorated much faster than we anticipated and we cannot predict when the market will recover.”
The type of workers laid off runs the gamut from software developers, recruiters, data scientists, pricing analysts, real estate sales managers and mortgage advisors to some executives in charge of growth marketing and customer experience. Even Mr. Ruparell’s own executive assistant was on the chopping block and one former employee announced on LinkedIn that she had been laid off on her birthday.
Properly has set up a number of supports to help trainer staff find new roles.
“I would be shocked 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 boom before he was laid off in a batch that included about 10 other workers.
“From the time I was there, we doubled the company; I joined at 70, and left at 140 [employees],” he said. “A couple months into the year there was a big slowdown but at the time we were still hiring. Then in the early spring we acknowledged things were starting to shift … hiring was slowing down, decisions were taking longer to make.”
On Aug. 8, Properly announced it had raised another $35-million from many of the same investors – including Bain Capital and Intact Ventures (the VC arm of Canadian insurer Intact Insurance) – that had pumped $44-million into the company in July, 2021.
According to some former employees, internally the company told workers this new funding 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 funding Properly’s leadership warned it would pause its expansion to 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 layoff announcement.
According to Mr. McWatt there were signs before the slowdown that the business was struggling to find its way. “The roadmap would change rapidly, we’d always be exploring new opportunities,” he said.
Among those was a partnership with the Canadian home renovation television duo Jonathan and Drew Scott, known as The Property Brothers (which may have lead to some brand confusion, seeing as Properly has never offered renovation services).
Properly initially began life in 2018 in Calgary as a so-called “iBuyer“ company – like US company OpenDoor, which used data to buy undervalued properties for flip and resale – but pivoted to the hybrid buying model in the face of a weak local real estate market.
Counted among the company’s finances is a $100-million credit facility from Silicon Valley Bank to backstop what was the company’s key market offering – referred to as sale assurance – which would allow clients to tap into their home equity to complete a real estate purchase with a guarantee that Properly would buy their initial home at a prescribed price if another buyer couldn’t be found.
As real estate markets across Canada slowed in 2022 amid rising interest rates, some of Properly’s former employees (who declined to speak on the record) say real estate sales people working with the company began to play down or omit any mention of the sales guarantees at all. Mr. Ruparell declined to answer questions about whether Properly has been forced to use his own funds to purchase any homes in 2022, though back in 2021 he asserted it had yet to happen.
Properly and Mr. Ruparell declined to offer comment on the future of the sale assurance program, or whether the company was pivoting again to a new business model.