Pacaso’s Unique Idea for Meeting Suburban Housing Demand
Pacaso’s Spin on the Timeshare Model
Many people who are feeling cramped at home are searching for more space to work and practice social distancing. This, and other factors, have led to a spike in demand for suburban housing. Pacaso, a startup created by two former Zillow Group (ZG) employees, has come up with a creative way to fill that demand.
Pacaso is using the timeshare business model to sell partial ownership in homes. While traditional timeshares give buyers the opportunity to stay in homes by the beach or the mountains, Pacaso plans to offer stays in more ordinary suburban neighborhoods outside of cities such as Austin or Detroit.
Launching During a Pandemic
The idea for Pacaso was sparked before the pandemic. The company’s founders, though, made some adjustments to the business model in response to people’s unique needs at the moment and see now as an ideal time to launch.
Pacaso, named for the artist Pablo Picasso, will target people who want to keep their homes in urban centers and are not ready to buy second homes, but want the opportunity to escape somewhere with more space on a regular basis. Pacaso will aim to offer homes within a two-hour drive from customers’ main residences.
Pacaso has secured $17 million in venture funding from investors including Howard Schultz, the former Starbucks (SBUX) CEO, and Jeff Wilke, an Amazon (AMZN) executive. The timeshare model is a notoriously difficult way to turn a profit, both for operating companies and buyers. However, Pacaso’s unique take on the business model could change this.
Pacaso launched last week with four homes, and has plans to be operating in 25 US markets with hundreds of homes by next year.
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