Real estate crisis
Former hope: broker start-up McMakler confirms another wave of layoffs
The crisis on the real estate market has also become a problem for many real estate agents
© Image Broker / Torsten Krüger / Picture Alliance
For the fourth time in just a few months, the once celebrated real estate start-up McMakler is laying off dozens of employees. There is already speculation in the industry about an emergency sale.
By Daniel Hüfner and Hannah Schwär
There is another wave of layoffs at the ailing Berlin brokerage start-up McMakler. The company confirmed corresponding information from “Capital” upon request. The layoffs affected 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 the months of 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 cuts in personnel,” said Jahn.
Those employees who prepare the purchase or sale of real estate in the background, for example by creating exposés, are particularly affected. According to Jahn, this should now be one Adopt software.
Fourth wave of layoffs at McMakler in a year and a half
McMakler was founded in 2015 and was long considered a unicorn candidate in start-up circles – i.e. a beacon of hope for a company valuation of more than a billion dollars. The Berlin company acts as a so-called hybrid broker. It combines the purchase and sale of real estate on site with technical tools, for example to evaluate properties online and based on data. McMakler is known to many as a brand through commercials on television. Last year, the company had sales of around 110 million euros – but the bottom line was that it made losses.
The company has been struggling under the crisis of the real estate market for two years. Because of rising loan interest rates, many consumers are refraining from buying a property or simply can no longer afford it. In addition, many construction projects are no longer realized due to skyrocketing 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, rounds of layoffs are gradually becoming a regular ritual. It is already the fourth wave of layoffs in 16 months that Jahn has to justify. According to “Capital” information, only about half of the company’s former 1,000 employees remain.
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Some top managers seem to have already lost confidence in a turnaround. Departures from key positions have been increasing since the beginning of the year: In May, co-chief financial officer Raphael Thelen resigned, in July COO Gerrit Ahlers resigned, and in October chief lawyer Philipp Takjas also left the company.
The company has apparently hardly developed any resilience against the increased loan interest rates and persistent purchasing reluctance. In contrast to the previous waves of layoffs, this time it will “mainly affect 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 backers also have to ask themselves what the future of their investments is. Since its founding, more than 200 million euros have flowed into the company. It seems unlikely that investors will see their money again with a high return. “Marketing is currently being drastically reduced 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. At that time, the company’s valuation was cut by around half to 400 million euros. No new investors were found; McMakler boss Felix Jahn even transferred money from his own pocket. A sign that hardly anyone outside the company believes in the fragile business model anymore. The question is whether there is still a realistic way out of the ongoing crisis. There is already speculation in the industry about a possible emergency sale.
McMakler boss Felix Jahn doesn’t want to know anything about it. He said he believes his company will finally be able to reach profitability after recent staff cuts. During the last wave of layoffs in May, Jahn promised this would happen at the end of 2023, but now it will happen at the beginning of the second quarter of next year at the latest. Provided that interest rates and demand remain stable. And if not? “Then we will need new money,” said Jahn.
This article first appeared on Capital.de