Struggling McMakler Raises €20M and Slashes €800M Valuation By Half

McMakler, Germany's leading hybrid real estate transaction platform, has raised €20M from existing investors to aid the struggling startup amid economic headwinds and forced layoffs.

Scottish investor Baillie Gifford led the financing round, with existing shareholders Warburg Pincus, Frog Capital and IGP Capital also involved.

The downside for McMakler is that it has also halved its valuation from €800M to €400M as part of the round, just 18 months after raising €50m from a venture round in January 2022.

But the company's intention to go public has hit snag after snag since last year's cash injection—McMakler laid off 60 employees in May—8% of the company's workforce—the third round of redundancies in less than a year, with 200 jobs cut across the entire business between July and October last year.

Founder and CEO Felix Jahn says the company faces "the worst real estate crisis in 50 years," with skyrocketing interest rates and construction costs dampening the German market; according to Jahn, the number of apartments brokered via the platform fell by 25% YoY in Q1 2023.

Founded in 2015, McMakler has raised in excess of €250M, including a Series D round worth €42M in November 2020.

Seen as a future unicorn, the company is yet to break even, but Jahn is confident that McMakler will achieve month-by-month profitability by the end of 2023 dependent on performance in the second half of the year—with the CEO hinting that investors may stump up a further €10M-€15M if the startup achieves this feat.

Built on the idea of digitizing activities related to real estate transactions, McMakler operates in the buying, selling and renting spaces.

The firm offers services including organizing professional photography and viewings and also provides market analysis, free valuations and marketing strategies across multiple channels. McMakler has 350 partner agents, while the brokerage end of the business has closed over 22,000 deals. The company also has over 500 financing partners throughout Germany.