A Cincinnati native who exited the real estate tech startup Dotloop for $108 million has launched a new business, and the company has big plans for the Queen City.
Austin Allison, founder of Dotloop, the real estate tech startup that sold to Zillow Group in 2015, launched a new venture this month called Pacaso, a property tech company that aims to “modernize the generations-old practice of co-owning a second home.” While Pacaso formally calls San Fransisco home, he told me Cincinnati will serve as a primary market to grow his team.
Allison said the company has already opened an office in Cincinnati. For now, Pacaso is subleasing space downtown at 18 E. Fourth St. from WineSociety, a premium canned wine company he and his wife Angela founded in 2018, but will be seek a more permanent location soon.
Currently, Pacaso has about seven team members based locally; there’s about 25 members of the founding team overall. Allison expects that latter head count to grow to 75-100 over the course of the next year or so.
“Many of those people will be in Cincinnati,” he said. “There’s a large pool of incredibly talented people, and we have great networks there. It’s just an amazing place to build a business, and I’ve experienced that firsthand.”
Allison, a Little Miami High School and University of Cincinnati graduate, founded Dotloop here in 2009, and the company continues to operate out of Longworth Hall today. Its software allows all parties in a real estate transaction to share and revise documents in real time.
He and Pacaso co-founder Spencer Rascoff, Zillow’s co-founder and its former CEO, worked closely together after the 2015 acquisition, Allison said, and they both left the company around the same time in 2018. They’ve been actively working on Pacaso for about a year.
Rascoff said in a release the company is poised to scale “incredibly quickly.” Pacaso creates a more “accessible category of second-home ownership, but for way less cost and hassle,” Allison said.
Buyers considering a second home can tell Pacaso where they want to buy, how much they want to spend and the amount of time they expect to be in the house. Pacaso and its real estate agent partners help find the home and set up an LLC designed for co-ownership. The buyer will purchase their desired share — for example, half of the home guarantees access to the home for half the year — and Pacaso will briefly purchase the remainder of the home before reselling the remaining portion to vetted buyers. Pacaso will manage the property, and owners can use Pacaso’s mobile app for scheduling stays. Buyers will pay a 10% fee at the time of purchase and pay an annual property management fee equal to 1% of the purchase price.
Pacaso launched with a $17 million Series A led by Maveron, a Seattle-based venture capital firm, with additional investment from LA’s Crosscut and Global Founders Capital. Among the individual investors are former Starbucks CEO and chairman emeritus Howard Schultz; real estate coach Tom Ferry; former Zillow President of Media and Marketplaces Greg Schwartz; and Amazon CEO of Consumer Worldwide Jeff Wilke.
Pacaso has also secured $250 million in debt financing to purchase shares of homes.
To start, Allison said Pacaso is focused on 25 markets in 10 states, destinations like Hilton Head, Myrtle Beach, Malibu, LA, Napa Valley, Lake Tahoe and Park City, Utah. While Cincinnati is far from a traditional second-home destination, the company expects to pull buyers from here and other similarly-sized cities.
As for the company’s potential, Allison said the market is largely untapped. “Tens of millions of familes” aspire to own second homes, he said.
“It’s a very big opportunity,” he said. “For so long, second homeownership has been a privilege that’s limited to the top 1%. We don’t think it should be that way.”
