13. April 2015–
Rocket Internet’s mid-term rental platform Nestpick is not even 12 months old and already available in 25 cities in eight countries. On its website, the startup promises to verify all accommodation offers available through its network. But can Nestpick really keep its promise while growing so quickly?
Nestpick focuses on students and professionals, who need accommodations when living abroad. Like every startup backed by Rocket Internet, it expands fast: Nestpick started in April 2014 in the Netherlands and was acquired by the company builder in December the same year. The startup then moved to Berlin, launching in cities in the U.K., France, Italy, Spain, Germany, Ireland, and Austria.
The startup faces a dilemma, typical for marketplaces of that kind: What is more important – a great number of potential tenants or listed apartments? Like in most cases, Nestpick decided to focus on a large number of offers first.
The online platform for “verified rental booking” has 90% unverified apartments
Different from other rental websites such as Airbnb or Wimdu, Nestpick promises on its website that it offers verified apartments. In this case, verification means a Nestpick photographer visits the apartment, takes pictures and ensures its existence and quality.
To underline the importance of verification, Nestpick surveyed 500 people and published its report “The under-reported dark side of renting online” a few weeks ago:
“Around a third of participants responded that they either know someone who has been scammed (31.3%) or have themselves been victims of online rental fraud in the past (22.8%). [...] According to the most recent FBI Internet Crime Report, over $18.5 million were lost to rental scammers in 2013, and these were only the reported instances (8.6% of our survey), meaning the real losses are likely to be in the hundred millions.”
For its service of offering verified apartments Nestpick asks for fees: It first asked users for 50% of the first month rent, by now lowering its fee to 25%.
However, despite promises and high fees, about 90% of Nestpick’s apartments are not verified.
Here’s why: In order to increase the number of offers quickly, landlords can upload pictures of the flats themselves. That wouldn’t be a problem, if Nestpick didn’t seem to have trouble checking and verifying them. “We are in the process of verifying all apartments on the platform,” Nestpick stated towards VentureVillage.
Unverified apartments, modified photos, short descriptions
Looking into the listed apartments, most descriptions only cover information that is already visible in the photographs. Additional information about the space, the area, or flatmates is almost never listed.
That is the tenants’ business, not Nestpick’s, the company stated towards Zeit Online (German) in February 2015. The German newspaper also reported that photographs of listed spaces were taken from other platforms and had watermarks removed. Those were e.g. taken from Medici Living, a professional flatshare provider. This means Medici Living furnishes and rents out apartments instead of offering a peer-to-peer platform.
Medici Living does use Nestpick to promote its apartments. However, “we did allow the duplication of the photographs, but neither did we know, nor allow the modification,” Robert Gmeiner, CEO of Medici Living, said towards VentureVillage.
Move fast and break promises?
Nestpick does show which apartments are verified by adding a watermark stamp to the photos. However, stressing on various spots on the website that all flats are verified can confuse users and lead to wrong conclusions.
The question is: Is it legitimate to list spaces that are not verified on a platform for “verified apartments”?
Despite growing fast, it should be important to startups to keep the promises they make.
Image: Screenshots Nestpick, edited (red marks) added by VentureVillage