Real estate startup McMakler cuts jobs again
This is the fourth major wave of redundancies in a year and a half for the once celebrated real estate platform. The Berlin-based company was long regarded as a unicorn candidate. In the meantime, it is increasingly groaning under the ailing real estate market. There is already speculation in the industry about a possible distress sale.
The crisis-ridden Berlin estate agent start-up McMakler is facing another wave of redundancies. The company confirmed corresponding information from "Capital" on request. The redundancies affect 58 employees, the majority of them for operational reasons. According to the company, this corresponds to around nine percent of the workforce.
The reason was missed sales targets, as McMakler boss Felix Jahn admitted to "Capital". In September and October, sales from real estate brokerage were ten to 15 percent below plan. "Contrary to our hopes, the market has not turned around, so unfortunately we cannot avoid further staff cuts," said Jahn.
Those employees who prepare the purchase or sale of properties in the background, for example by preparing exposés, are particularly affected. According to Jahn, this is now to be taken over by software.
Fourth wave of redundancies in a year and a half
McMakler was founded in 2015 and was long regarded in start-up circles as a unicorn candidate - in other words, as a hopeful for a company valuation of more than one billion dollars. The Berlin-based company operates as a hybrid broker. It combines the purchase and sale of real estate on site with technical tools, for example to value properties online and with the help of data. McMakler is known to many as a brand through television commercials. Last year, the company achieved a turnover of around 110 million euros - but made a loss on the bottom line.
The company has been suffering from the crisis on the real estate market for two years. Due to rising interest rates on loans, many consumers are refraining from buying a property or simply can no longer afford it. In addition, many construction projects are no longer being realized due to exploding costs. This is poison for McMakler's commission business, which thrives on brisk real estate transactions.
For Felix Jahn, the CEO and founding investor of the real estate platform, redundancy rounds are therefore gradually becoming a regular ritual. This is already the fourth wave of redundancies in 16 months that Jahn has to justify. According to information from "Capital", only around half of the 1,000 employees who once worked for the company remain.
Meanwhile, some top managers seem to have lost confidence in a turnaround. Since the beginning of the year, there has been an increasing number of departures from key positions: In May, CFO Raphael Thelen stepped down, in July COO Gerrit Ahlers took his hat off, and in October Chief Legal Officer Philipp Takjas also left the company.
The company appears to have developed little resilience against the rise in interest rates on loans and the ongoing reluctance to buy. In contrast to the previous waves of redundancies, this time it is "mainly employees in the lowest wage segment who will have great difficulty finding follow-up jobs in the current market environment", says an industry insider.
Only money until April
McMakler's investors also have to ask themselves what the future holds for their investments. More than 200 million euros have flowed into the company since it was founded. It seems unlikely that investors will see their money again with a high return. "Marketing is currently being drastically scaled back after the turbo financed with fresh money fizzled out in the summer," says an insider.
The last financial injection in June (20 million euros) was already an emergency measure. The company's valuation was cut by around half to 400 million euros at the time. No new investors were found, McMakler boss Felix Jahn even transferred money from his own pocket. A sign that hardly anyone outside the company still believes in the fragile business model. The question is whether there is still a realistic way out of the permanent crisis. There is already speculation in the industry about a possible distress sale.
McMakler boss Felix Jahn does not want to know anything about it. He assumes that his company will finally be able to achieve profitability after the recent staff cuts, he said. During the last wave of redundancies in May, Jahn held out the prospect of this happening by the end of 2023; now it will be the beginning of the second quarter of next year at the latest. Provided interest rates and demand remain stable. And if not? "Then we will need new money," says Jahn.
Following the current market conditions, McMakler is struggling to meet its real estate sales targets, leading to increased interest in real estate loans. As a result, the company announced another wave of job cuts, affecting 58 employees, primarily involved in property preparation tasks. This redundancy is the fourth major wave in a year and a half for McMakler, forcing the company to rely more on software for such tasks.
Source: www.ntv.de
