Although Millennial Charlie Oshman didn’t have any commercial real estate experience, that didn’t stop him from co-founding Reonomy, one of the best funded CRE-tech startups.
Reonomy is a technology platform that provides a simple and easy way for brokers, investors and lenders to sort through commercial real estate information and find deals. Clients including Marcus & Millichap,
“In the real estate industry deal flow and the right data points are the difference between success and failure,” Oshman said. “Reonomy is steroids for the real estate professional. With our tools, users are able to quickly find the types of deals and insights they are looking for, that they would otherwise miss.”
While Oshman did not have commercial real estate experience, he was experienced with data and software, and when he recognized there was a need for innovation in the fragmented and often opaque commercial real estate market, he decided to investigate the opportunity.
“I was grabbing a drink with a friend who worked as a commercial real estate investment analyst and he told me about the crazy inefficiencies in the work he was doing,” Oshman said. “Things were very manual and the access to data was woefully behind what you’d find in other public markets, such as finance. This resonated with me and even more so when you think about the size of the space - $15 trillion in the U.S. alone - I had to dig in.”
“My biggest learning was that CRE professionals were making really big real estate investments based on probability, not high quality information; in many cases they just didn’t have the data,” Oshman said. “You look at what happened in 2008 and the bell started to ring for me.”
Oshman reached out to friends who worked at some of the big banks, asking them to do him a favor and get him in front of the people who made lending decisions.
“I walked into the firms and said I have nothing to show you or sell you, but I bet I can do your research better than you are able to now,” Oshman said. “Everyone laughed at me, and I said look, I will do it for free, just give me a project.”
Despite working full-time at a software company, Oshman took on their projects and delivered better data. Oshman was off to the races.
The next step was to raise capital to build an actual business. Oshman knew the opportunity was there but he needed the means to attack it. Lucky for him, the stars aligned. Oshman was introduced to Richard Sarkis, who at the time was an associate partner at McKinsey and Company, but who was keen to return to his entrepreneurial roots. Rich was looking for a business partner and the right problems to solve.
The two met at Le Pain Quotidien for what was intended to be a 30 minute meeting. Hours later Sarkis called his wife and told her that he had just had a conversation that would change their lives.
“My mind was truly blown after that first meeting with Charlie,” Sarkis said. “Here was this brilliant young guy who had uncovered a massive opportunity and was miles ahead of anyone else in terms of solving it. Having worked in financial services, I was stunned that the same level of data sophistication did not exist in real estate. The entrepreneur in me started buzzing immediately."
Sarkis and Oshman describe their experience during Reonomy’s first year as similar to living through a science experiment. Essentially, they were the archetypal four geeks in a garage, in this case the “garage” was an excess supply closet at another start-up. That’s all they could afford. The pair were focused on proving that the concept was possible; at the same time, they had to get really creative in hiring talent, at a time when they had no money.
Reonomy didn’t have enough capital to get a full product to market, but the team was able to prove that they could actually deliver on the big statements they had previously made to investors. Commercial real estate was a big space and it was begging for innovation and Rich proved capable at raising capital. Towards the end of their first year, Reonomy closed $3.7M Series A funding led by SoftBank.
“We’ve always been mindful of making sure we’re very clear on our goals before looking for funding,” Sarkis said. “Fortunately, when raising both rounds, we were in a position to partner with investors who fit with our strategy and appreciated what we were trying to do. As a result, we’ve been able to really focus on revolutionizing the industry with the guidance of some of the best possible advisors."
In Jan 2015 Reonomy raised an additional $13M in Series B funding led by Bain Capital Ventures and now in its third year, Reonomy has grown to a team of 40.
“We are continuing to map the real estate genome and develop products that solve specific pain points for our clients,” Oshman said. “Reonomy has a strong listening culture, we partner very closely with our clients to understand how they use our products and the challenges they face. We are rapidly growing in NYC and will expand nationally towards the end of the year. It won’t be long before we are in Canada and the UK as well.”
All images courtesy of Reonomy
