Zown, a Toronto-based proptech startup that aims to streamline and lower costs for home buyers, is expanding to the United States (US) with a launch in California.
The company will initially serve San Francisco and had a soft launch in the region two months ago, but said in a statement that it plans to serve other California markets like Los Angeles, San Diego, and Sacramento.
“If we can shorten the path to homeownership in California, we can do it anywhere.”
Rishard Rameez
Zown CEO
In an interview with BetaKit, CEO and co-founder Rishard Rameez said his firm “already planned” to expand to other states, possibly including competitive housing markets like Texas and Florida, and was piloting expansions to other countries.
Rameez founded Zown in 2022, after Rameez wrote a viral Reddit post complaining about the agent commission fees attached to selling his home in 2021.
The company partly based its strategy on reducing commission costs to allow homebuyers to afford a larger down payment. Zown also touts an “all-in-one” approach that helps customers find homes through an app and handles much of the closing process, such as negotiating interest rates. Zown makes money by collecting commissions from sellers.
Zown has had one, currently undisclosed, funding round to date and became a brokerage in 2023. It claims to have handled over $200 million CAD in transactions through roughly 250 homebuyers, having initially launched in the greater Toronto area. Rameez launched two startups before this: the college carpooling app HiRide, which was acquired in 2020, and the tokenized real estate firm RealMe Property.
Rameez characterized the US expansion as a logical way to continue reaching Zown’s market of “tech-savvy” renters who can’t necessarily afford down payments. California has housing affordability problems like Canada’s, the executive argued.
RELATED: Promise Robotics opens second factory to help increase Canadian housing supply
However, the CEO added that Zown saw ten times the growth potential in the US. The company leader also said Zown had to overcome “too good to be true” skepticism from Canadians worried there might be hidden catches to the deals.
“In California no one questions that,” Rameez said.
Rameez said Zown was still committed to Canadian growth, with plans to expand to Alberta and British Columbia. He added that nearly the entire team was Canadian, and that this wasn’t expected to change despite the backdrop of the Canada-US trade war. The co-founder pointed out that some domestic market realities work in Zown’s favor: it’s not as easy to “buy down” the interest rate on a home purchase in Canada as it is in the US, and fee reductions are one way to lower the cost of a house.
Rameez sees the California rollout as a litmus test for the company’s formula. The soft launch in the state has so far proven successful, he claimed, and showed that a “lot of people” wanted solutions like Zown’s.
“If we can shorten the path to homeownership in California, we can do it anywhere,” he said.
Feature image courtesy of Zown.