Yahoo Finance Presents: Apartment List CEO John Kobs & NBA All-Star Andre Iguodala
Yahoo Finance Video
NBA All-Star Andre Iguodala and Apartment List CEO John Kobs spoke with Yahoo Finance's Melody Hahm to discuss the startup's fresh $60 million Series D round of funding, the value proposition of the profitable rental platform and the flight from Silicon Valley to Miami among entrepreneurs and tech executives.
Video Transcript
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MELODY HAHM: Apartment List raised an upsized Series D after a profitable 2020, closing the round with $60 million. And there's a superstar investor who part of that round, Andre Iguodala, NBA All-Star now with the Miami Heat. He's also a venture partner in the Catalyst Fund, which invests in underrepresented founders and entrepreneurs in tech. Thanks so much for joining us today, Andre Iguodala, as well as the CEO of Apartment List, John Kobs.
JOHN KOBS: Thanks for having us.
ANDRE IGUODALA: Thanks for having me.
MELODY HAHM: So let's start with you, John. Give us a quick take on how 2020 has been and your outlook for 2021 as you run one of the fastest growing apartment listing platforms out there. Give us a pulse check.
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JOHN KOBS: It's been a really intense last 12 months. So for Apartment List, we didn't know what the pandemic would hold from a macro trends perspective. But, you know, our belief is everyone deserves a home they love. And that has never been more true than in the pandemic. And so we actually saw record numbers over the last decade-- the most searches ever for apartments was this summer.
And so it's been really incredible. It's proven that consumers in America are still willing to move, even in the midst of a pandemic. And so, you know, we find ourselves at this intersection of a lot of mobility in America.
MELODY HAHM: Andre, I'm curious, you're a prolific investor. I know you've got a lot of accolades for being an early investor in Zoom. Obviously, we've seen that crazy run up. What really sparked your interest when it came to Apartment List? What is it about the business model, about the executive team that really caught your eye.
ANDRE IGUODALA: Well, it's interesting how John and I met. We met through my pilates instructor. And her husband is an engineer, so this is a very bright family. And we were able to link. And I was able to go to the headquarters in SF and was able to have a conversation with John.
And we had a great conversation in terms of what he was trying to do with the company. Obviously, when you're trying to invest in a company, you're looking at total trust in the market. And you're looking at you can they service.
And then beyond that, you're looking at the team. You're looking to CEO or founder and, you know, what they represent. But having many conversations with many different startup founders and you start to see you're investing more in the founder than you are in the actual idea, how can it execute, you know, can we lead the team. And then just see the platform, which, essentially, is a marketplace.
You know, you've got the renters. The have the owners of the buildings. So you've got two sided, so, you know, I've been reading up a lot about the chicken and egg problem and how do you solve that. And even before I knew about all that, John would give me some, you know, some little tips here and there about how they kickstart things and to see how they're profitable.
Right now, it's such an amazing thing. It's a rare thing you see with startup companies, even companies who have IPOed or who are public traded companies aren't even profitable. You just saw a company like Netflix who is finally seeing their positive cash flow. So for John to be able to do what he's done in such a quick amount of time is an amazing thing.
MELODY HAHM: Yeah, and Andre, kind of a follow-on there, when you look at your portfolio of companies-- and honestly, maybe it was your time in San Francisco, but now being in Miami, we hear about this exodus, right, specifically the flow from, perhaps, Silicon Valley to Miami. Have you seen that firsthand? Do you feel as though Miami has become a tech hub? Are you getting that sense on the ground?
ANDRE IGUODALA: Well, even before the pandemic hit, we were starting to see smaller tech hubs kind of being formed throughout the country. Look at Austin, Texas, you know, look on the East coast at places like Boston, talks of Cleveland, even, especially with their special sector within, you know, precious metals and companies trying to stand up there. And then now you're seeing it here in Miami.
And, you know, I have a few folks who I had a lot of contact with back in, you know, Silicon Valley who are starting to move over and you're starting to see the mayor of Miami, he's been tweeting a lot about Bitcoin. You've got a lot of conversation about, you know, Elon moved over to Austin as well.
And then you've got some secretive moves down here to Miami with some large properties. So you're starting to see it. But I think with that concentration of brainpower in the Bay Area, they could still be, you know, the headquarters of the tech space.
MELODY HAHM: You know, right now about a third of the US population rents their home, with renters being four times more likely to move every year over homeowners. You know, John, when you think about that sort of statistic, that doesn't actually solve the affordability crisis, right? You talk about how your platform has done so well because of the pandemic.
But there are a lot of middle class folks who want to be buying a house right now who thought this would be a good opportunity, but in reality, they're getting priced out. How do you think about the overall macro picture of the housing market, John, and how Apartment List can help remedy some of these kind of bigger issues at play?
JOHN KOBS: Yeah, I think, you know, by shining a bright light on the industry, Melody. You know, we find ourselves at this kind of intersection between folks looking for a home and folks looking to fill a vacancy, whether they're owners or property managers across America. And that's a pretty integral piece of this transaction.
And so, you know, the average American family is going to move 11 times in their lifetime. And six of those moves are going to be in the first 12 years after you graduate out of high school or college. And so there's really a lot of opportunities for us to make an impact on American consumers, especially during that 20 decade. And for us, we're going to continue to grow our business to help kind of build some connective tissue between those discovery cycles so that we can engage with renters in more ways than we do today.
MELODY HAHM: Andre, kind of picking up on that point, when you think about how the pandemic has completely disproportionately affected Black and Brown communities, underrepresented folks, people of color, how does, you know, Apartment List or even looking at future companies that you're speaking with, how does that really shape into your own personal vision, right, and mission for your legacy?
ANDRE IGUODALA: Well, that's one of the main takeaways I took from my initial conversation with John was the philanthropic endeavors that comes with the platform of Apartment List and, you know, a good amount of homes being found for homeless women. And I had a few investors that came in before me who are leading the charge on that. Now I don't know their name out there, but she's done an amazing job of leading the charge.
And just hearing that, you know, I was sold. Not only is this a platform that makes economic sense in terms of investing, but it also is serving underprivileged people. And part of, you know, our mission with the Catalyst Fund is investing in under-funded communities such as African-American, female, and Latinx founders, also platforms that serve them as well. It's not just the founders, but the platforms that serve them. And this is definitely a unique opportunity that goes above and beyond just, you know, investing in a smart startup that's going to make money, but is also serving those-- from the communities that I come from.
MELODY HAHM: And quickly, Andre, as you think ahead to 2021, of course, you have your illustrious basketball career, your portfolio companies, what is one sort of additional benchmark or milestone that you're looking for in your own life?
ANDRE IGUODALA: Outside of tech and sports? My son is like 6'1" now. He's 13.
MELODY HAHM: Wow.
ANDRE IGUODALA: So he's like catching me really fast. So I've got to make sure I win the battles with him this year before he ultimately passes me in height.
MELODY HAHM: Or is that your dream? Your legacy will continue for your son? Thank you so much, Andre and John, really loved talking to you today.