Jake Aaron Villarreal: I'm Jake Villarreal, born and raised in Silicon Valley and here to take you behind the scenes to share what it's like to be a startup founder, the journey they're on, the problems they face, and the products they build as they transform industries. I'm excited to have with us today Stefan Gunnarsson, founder and CEO of PropTexx. Stefan, welcome to the show.
Stefan Gunnarsson: Thank you, Jake. Great to be here. Thank you for inviting me.
Jake Aaron Villarreal: Well, thanks for joining. Uh, a little bit more about Stefan. He's the leader of the company which is a property technology. They're passionate about real estate and tech. Stefan drives innovative immersive solutions that revolutionize how people visualize the built world. Under his leadership, PropTexx is shaping the future of real estate visualization and its data. Stefan, I guess before we jump in here, I know we talked a little bit before we started, but let the listeners know where you're calling in from today.
Stefan Gunnarsson: I am calling in from the south of France, the French Riviera right now. A beautiful place.
Jake Aaron Villarreal: Well, you're making me jealous already, but I like the fact that you are able in this world to, to hire anywhere, to travel where you want, to build where you want, and ultimately if you're solving a problem, it really doesn't matter. Give us a little background of, of you, Stefan. You know, you're, you're building this really AI company today, but what, what's your origin story? How did you really start getting into technology and really from early days up to today? Walk us through your, your journey.
Stefan Gunnarsson: Sure. So, so I'm I'm born and raised in Iceland. And I say that because in Iceland we, it's, it's a harsh living environment. So the beginnings start, usually start there and we say Icelanders are, are very good entrepreneurs because they need to go through a lot, especially back in the days.
Jake Aaron Villarreal: Yeah. Yeah.
Stefan Gunnarsson: Then life led me to Switzerland where I did a university, did a hotel school in Lausanne and started my first startup in the year 2000 right after school, which I sold and three years later. That was my first exit, a very good exit actually, which led me to believe that I could do it again immediately after, which was not the case unfortunately or fortunately because I believe we learn more from the mistakes rather than what we succeed. So I took that lesson and, and went on with the journey. I then went into a bit of a corporate, was in Southeast Asia, Asia Pacific actually for a large electric electricity provider and then from that back into the startup. So created PropTexx, created PropTexx out of Singapore actually, built it from there. COVID hit, locked me down in a very nice place called Phuket in Thailand.
Jake Aaron Villarreal: Oh yeah, I know. Phuket, very cool.
Stefan Gunnarsson: Where I bought myself a house and passed or or was in, in, on the island during COVID and built PropTexx before they then, they then opened that island up and moved over to the US, Canada actually to be very uh, to build out the North American market for our solutions.
Jake Aaron Villarreal: Wow.
Stefan Gunnarsson: That is pretty much the story.
Jake Aaron Villarreal: Yeah. Well, what a great story. And to tie into that story a little bit, I was in Phuket about a week before the tsunami hit Thailand. You know, this is way back and kind of devastated that whole island a little bit. But beautiful.
Stefan Gunnarsson: That was, that was a rough uh, that was a rough time.
Jake Aaron Villarreal: Yeah, that was a real rough time. God, it was crazy. Got lucky on that, on that getting out of there right before it happened. But nonetheless, what a journey. So very international obviously and now you're here building in the US and, and, and globally as well. Technology is something that helps industries when it solves a real problem and the challenge is always identifying what that problem is, then hoping the technology can do it differently, optimize it, do it better. What's the problem your company today, PropTexx, solves?
Stefan Gunnarsson: Yeah. So, it, it is, the problem we solve is the inaccuracy in uh real estate listing and the presentation of listing. We've all gone through it. Every single person that has bought a house, we've all gone through endless nights and, and weeks and months looking for a house and never found the right one. Although, you just scroll through and, and you know that one of the houses that you actually passed is the right one, but you just continue. What we are solving is to enable the user to visualize the home the way they like it right from the comfort of their home on the listing itself. So empowering the user rather than saying an agent or a home buyer should present the home to the, to the, to the home buyer. Sorry, the agent and yeah, the agent and the home buyer should present the home the way they think the buyer would buy it from. So, we're actually empowering and putting these tools in the hands of users, which naturally creates a much better experience down the, down the line.
Jake Aaron Villarreal: Yeah, that's great. When you talk about your product, there is really two routes, sometimes three, but you're talking about selling a product directly to a consumer and sometimes it's directly to a partner and you guys collaborate and there's more of a business-to-business relationship. What's your strategy? What's, where's your, who are you selling to?
Stefan Gunnarsson: Yeah. So, when we created the product, the first target was to go to agents. That was, that was the initial thought. Very quickly we understood that as a tech company we sit better within tech stacks. So we went straight up the, the food chain and we started selling our or presenting our solutions to the CRM and, and the MLSs and, and the tools that are used by these agents all the time so that they could get direct access to it. So we've fostered a very strong approach, market approach where we go to tech stacks, we sit in the back, we plug in our solutions from the back end and that empowers the agents when they are pushing a property to the market. They can then either tick on or off. "Do I want my users to play with my property? When they come and see that property, do I want them to visualize that property as they would want it?" This is how we, we fostered our go-to-market strategy.
Jake Aaron Villarreal: That's great. So from a user perspective for the listeners who may have already used your product product, didn't even know it was yours. What's the experience like for the user? I want to buy a house. I look at the house online. I talk to my agent. I don't have the time to go quite see it yet, but online I want to take a look at what it is and and maybe how I can envision it being something I buy in the future. What is your technology do for me? How does it change my experience when I'm looking at a house?
Stefan Gunnarsson: Yeah. So, the typical, the typical use case is when you come on a, on a listing site, you see volumes that might fit your need. The number of bedrooms or, or even a basement that you know is half finished or could have potential without having a tool that allows you to visualize how these things could look if you would be living there. You would, a strong chance you would just pass and go to the next one. Now with the tool, the first thing you're going to do and what we are seeing, what people are doing is to go to the kitchen, change the kitchen to something modern, island kitchen or, or something that they like to, to have, and then change, change room types. So go into rooms and say, "this should be, how would this look like if I have this as a home office" for instance and I change it and I, and I start looking at, "okay this is a bedroom today. I don't need that as a bedroom. I'm going to transform this into a home office." Exactly the same thought process as if you would walk into that house with an agent for a viewing and you would be thinking about these elements without having any tool to help you out.
Jake Aaron Villarreal: That's fascinating. So, as a potential buyer and with your agent, you're able to with technology change what you're seeing online within a house, the room, the kitchen, the bathrooms, and in some ways dress it up, I guess, too with how it would look if you had a desk in the corner and a lamp in the on the other side and really being able to visualize it. I guess from a time-saving perspective, it would help you look at something versus having to go out and see everything in person. So, I can understand that side of it. Save some time. What are some of the other values that you see people are getting out of it so far?
Stefan Gunnarsson: So, the, the main value is the engagement with the property. So the usual uh time that you spend on a property is about, or on a listing is about 1 minute, 1 minute 30. This is the usual data that you're going to see on websites and, and listing sites. With the tool we're seeing up to 20 minutes. Now from a 1 minute 30 to a 20 minutes. Imagine you looking for a home. You're going to take 20, 30 minutes in a day every day or every second day to look for a home. If a website can capture 20 minutes of your time on a, on a particular listing, a lot of things are happening. There's a lot of data that is being gathered. So, there's behavioral data that we're gathering. There's a lot of naturally there's the engagement, but the whole understanding of the, of the uh, of the home buyer and especially a lead generation for then the home seller or the owner of that listing that we are then feeding back to them. Don't forget our customer is still the home owner, right? Or the or the listing agent. So they're still purchasing from us. So they start gathering insights that they just didn't have before. And obviously more leads and better leads. We have brokerages that have rolled out with us that are just calling us back saying it's just too much, too many people.
Jake Aaron Villarreal: That's a good problem. I like that. So it also is a generator of more, more opportunities from just using the, the platform. It's amazing. God, you would think that agents would [be] knocking the doors down and say, "Hey, we got to get this technology in, into the systems that we use, the MLS systems that we use," so we can improve our odds of selling and closing. Why is this space important to you?
Stefan Gunnarsson: So, so the, this is the largest asset class, right? So, real estate, I went into this because I was buying a home. I've been buying and selling homes for 20 years, right? Whether it's, you know, my home or just for investment or, or a holiday home, but it, it just never became better. The experience just never became better. And, and, and so there was a problem to, to solve it. Cable TV changed for the better. Netflix today is feeding you stuff. It just everything changed, but real estate never really changed. And, and that is the particular thing that you know we're diving into. This is how and this is why, one, I think this is solvable. There is technology out there that could be applied, but it's such a niche market in a very vast array of generative AI, which is real estate that, you know, we've picked up on. We've developed everything for that particular sector. We own everything we, we have created or that we're rolling out. We don't sit on any third party. We created all the data sets and the pipelines and the, and the weights and everything on our own. So yeah, I think, I think we've just narrowed down on something that, you know, there's a, there's a very strong need for the vast majority of the people on this planet. We're all buying a house at some point or renting a house or, you know, a roof is needed at some point in life.
Jake Aaron Villarreal: So, it's not just for the home buyer. It's also for the renter that might want to move into a place or just be able to visualize, "I'm going to move in there. I got to work from home. What's a home office going to look like? What's the spacing look like?" And not having to drive around everywhere.
Stefan Gunnarsson: Yeah. And the, the, the home renter, there's even more use cases around the home renter because often you're going to have photos of stuff within, when they're taking pictures. You need to remove things and change things within the, the space of that photo. So, you know, the decluttering typically is one of the, you know, big use cases on our platform. Declutter a photo. Take, you know, the kid's room with all the toys and everything around. You want to take it away and put something else in place. Just, you know, visualizing it differently. This is just, this is just the start of the journey, right? Uh we launched this product in November. Uh first contract came in in February. Now we're July. We're processing, we're processing over a million instances a day. Uh so I mean it's growing. It's growing like crazy.
Jake Aaron Villarreal: I can feel your passion on that one. So what's the technology? Is it an AI, a visual AI solution that is, is, is changing real time how you're looking at a photo or something on the website? Is that really part of what you've created and kind of the with AI becoming so prevalent now in almost every space, you know, what is it that you're doing? Maybe it's a head, a start above, above what other companies are doing.
Stefan Gunnarsson: Yeah. So often I get that question: what's different with a Midjourney or DALL-E or, or these generic uh you know visualization changing programs out there. The main difference is that if you use a, a Midjourney or a DALL-E or anything out there, you're going to get fantasy into a world that needs structure. So walls and windows and, and doors and fireplaces and stuff. You can't change these things. These are fixed in the house. If you can't, it's, it's not a fundamental renovation tool. It's, it's redecoration, changing things that are, that you're able to change. So we've seen companies coming out with you know APIs into, into a DALL-E or a Midjourney. It's un-, it's, it's unusable. You can't, it, it has the wow effect because you change something, but you can't use it because walls are being moved and, and suddenly there's a fireplace in the middle of the room and it's, it's just it won't work.
So the technology that we have is proprietary. So it's all, it's all in-house trained on data sets millions of time with our clients. So we've worked with clients that have been on beta with us working on the outputs. What works, what doesn't work. So anybody going into the more generic would have to tone it down to trim it into this frame which is the room, right? Which is the house, the envelope of the house. You're not changing that.
Jake Aaron Villarreal: Yeah. Really cool. So, the technology itself sounds like it's groundbreaking. It's got some good features in it. What can we expect from PropTexx in the near future that will further disrupt the real estate industry.
Stefan Gunnarsson: So, next step for us is to provide the user with estimates. We have a lot of users that are changing an old kitchen to a new kitchen. You would want to, want, you would want to know what's the estimate of that change. Is this a $20,000 renovation or is it $100,000? Once you know that, you would want to know what, what impact does it have on the value of the house given the market. Does it mean that I'm bringing the value up to 100,000? If I put 100,000, insights into the property that are just not available today, but we can pull out because one, we have the data. We're working with the profiled customer and the listings themselves and using the before and after, whereas we read the photos before and we read the photos after. Therefore, we're able to, to guide. So these are, these are the steps that we're coming out with now.
And another thing that we're naturally launching and, and everybody expects actually is to be able to control the output of the images. So we have a lot of customers that provide retail that want to come in and be a part of the journey because we got all these eyeballs on, on our outputs. So we're getting a lot of requests from furniture companies and, and, and other related companies where they want to be in these outputs. So today technically we can do it. We build the models for it. What we are rolling out with them or with the first ones is the business model around it. But yeah, that will, that will come very soon as well.
Jake Aaron Villarreal: Yeah, that's great. You know, you're in a really good position where you have traction, you have revenue, you understand where the, where the path is to grow. What's the biggest challenge currently for your company?
Stefan Gunnarsson: Yeah, right. That, it's right there. It's the growth. The challenge is getting customers in. Our first contract was a customer that you know does hundreds of thousands of photos and, and, and when you get that in in the beginning, obviously you start thinking infrastructure, you start thinking scalability, you start thinking you know what's going to happen with these models when, when you get at the same time, you get 300 images a second, you know, how does it scale? So you know, one thing is to build models. The other thing is to find a market fit, financing all of the little ingredients to build your startup. But then when, when the market comes at you because you actually found that little silver bullet and the market comes and they need it immediately. How do you manage that volume? It's a good problem to have, but it's still, it remains a problem.
Jake Aaron Villarreal: It's a little pressure, no doubt.
Stefan Gunnarsson: Yeah, we see this quite often, but the good ones figure it out and move fairly quickly.
Jake Aaron Villarreal: When you uh start a company, you typically have a path where you want to go and there's a lot of left and right decisions that have to be made in the process. Some people call them pivots, we call them shifts. What are some of the shifts that you've gone through that you feel would be something that you can share others would learn from?
Stefan Gunnarsson: So the bit... Yeah. So I started this journey in 2020. We're 2024. This four years in, when you start you got this great idea and I would say from over these four years we've probably pivoted every month or every 3 months not fundamentally, but there's always little things that do change and if you're open to it, you have your structure around it that accommodates for these changes, then you're on a good path because you know, you, you can grow with your vision. If you think that the first idea is going to be the, the, the last thing where you exit on, you're fundamentally wrong, I would say. So yeah, the, the pivots... I mean there are, there were never big breakthrough pivots and I think that's just because we left space for adjustments. We're very quick reacting. I mean, I'm, if there's something, something is not working and you always have something not working, you just, you pull the plug and you, you move on and you, you, you just drive your vision.
Jake Aaron Villarreal: Yeah. You know, every, it seems like almost every company we've talked to has had to make those changes or pivots and they eventually, you know, really unlock some potential that helps them grow and scale. There's also the internal side on the employee that's looking at the leader and understanding, you know, you're, you're leading them through a path. So, you know, your decisions impact potentially them, too. Sometimes it's hard to make those changes, especially if there [are] a lot of them. But I think the good leaders set expectations where "there's going to be lots of changes. And so, get prepared. It's going to be a fun journey. We're going to make changes as we go. We might go down a path that's not going to work or we're quickly going to make a change that is going to work." So sometimes that is really good just to kind of put it out there and, and you grow with the same people. And sometimes you get the wrong people on the bus that just, it's too much change and it's not going to work for them and they're kind of "get me off of here, I don't know where we're going to end up and I'm not, I'm afraid to find out." So yeah, we, we really see quite a bit of that sometimes.
Stefan Gunnarsson: Yeah, that's very much so. And, and, and I always say it's, you know, you hire people for that pick up on responsibility and ownership, especially in the beginning. And I always say, "I'm here to provide the funds and a vision. The rest is up to you guys."
Jake Aaron Villarreal: I like that. Yeah, it's everybody's journey. So, that's really cool. What do you wish someone would have told you now? Or I guess what do you know now that you wish someone would have told you before you started this journey? I know you had already a good exit and some other experiences over the last 20 years, but for this in particular, knowing where AI is today and how things have accelerated, uh what do you wish someone would have told you to, that you, that you didn't know then that you know now that would have been helpful if anything?
Stefan Gunnarsson: Oh yeah. Yeah. A lot of things. So creating this journey, the, the AI came about just by accident. It was never a thing really in my head at least. I started dabbling with it and, and finding ways, hired data scientists and engineers in the beginning to try to find ways to automate these visuals. That was the beginning and my idea was always, yeah, this CCTV recognizing faces, we must be able to do something in real estate and change and do, you know, adjustments. That was, that was the early days. Then came GPT and, and the AI wave and it felt for a month like the carpet was taken from under you. It's like, oops, AI is now gone. Now I'm, I was the sexy one on the block and now they came and I'm nobody. But it actually changed. It's, it was suddenly the market accepted it. The market took it in and our story just got, it was just blown up because you know, we were a part of that journey suddenly and we owned the source. So we, we were one of them at the same time. That was a good one.
So if, you know, I, when I asked investors, you know, for, for, for funds in the beginning, they would say, "Yeah, where's the blockchain? Where's the crypto? Where's all the fun stuff?" back in the days. Today I talk about AI, I'm obviously in the middle of the cycle. So we got it right there. But you know, ideally I would have understood early days where the larger models were, where the, where is the AI exactly at that moment. It was just not out in the open at that time, but it was definitely in the making.
Jake Aaron Villarreal: Yeah. You know, it's been 24 years since the real big transformation. How I look at it, you know, was building the internet in 2000 and, you know, we've gone through mobile and cloud and AI. I think yeah, you're in the perfect position from what we see. I think there's going to be some consolidation for sure and some companies just aren't going to make it, but there's going to be a lot that do. Talent is one of the challenges for a lot of AI companies right now. You've got the big three companies, OpenAI, Google, and some of the others that are really aggressively going after talent when it comes to machine learning and data science and some of the other peripheral type skills that you need in AI and building out. What's, what's a strategy that's starting to work for you when it comes to finding the right people or maybe hiring the right people?
Stefan Gunnarsson: Yeah, so I'm in the south of France on the Riviera for a reason. We built up uh a research and development center up out here a few months ago and that has worked out very well for us. It's easier to attract nice talent or good talents on the Riviera rather than, rather than a random place somewhere where you know they wouldn't find the same lifestyle. So one of the reasons why we're here is naturally you know there, there's a good pool of talents where we are. It's called the Silicon Valley of Europe. It's called Sophia Antipolis right out of the Nice area. Lots of universities inside that area. There's a lot of help from government. There's a lot of push on AI right now in this area. So we went a little bit away from where everybody else is recruiting and, and we came into the, you know, the new found land if we wish. And people are coming out of universities here with you know, great ideas and understanding of the tech that you know is currently building. And it's interesting, the, the younger the better almost because they, they're so curious and this is just so fast-paced.
Jake Aaron Villarreal: Yeah, I love that strategy. Go to where the talent is, but no one really is there to, to recruit it and build those relationships that can be a foundation. What's the moat you're creating around your company where you feel like you have an advantage and going forward it's going to be tough for competition to, to really catch up or penetrate?
Stefan Gunnarsson: Yeah. So, competition will catch up on the tech, right? I mean that's without a doubt. Where they won't, where it's going to be more difficult for them is as we integrate into all of these tools. It's going to be very difficult to take us out of there and replace us once we have the adoption downstream. So I think our advantage is really on the early days we were the first mover on the front facing to the client with these generative models. It's being adopted widely currently. I mean, there's millions of listings that we're powering today already and, and keeps growing. The faster we push that, you know, the better the market position downstream. Not really on the tech. Yes, the tech is good. I mean, it's going to take months or even years to catch up, but tech goes fast and, and there are other things going to come out, etc. But it's really about being integrated. I look at Grammarly as a very similar, you know, why, why is Grammarly still growing when you have ChatGPT, but they still grow. And, and that's just because they're integrated, right? So, yeah, very similar story there.
Jake Aaron Villarreal: You know, for you personally, as we kind of wrap up here, I love what you're building. I understand the value. I come from a real estate family and I know that any edge you can get to helping your agents or helping yourself as a buyer of a product or even renting technically that can give you an advantage. Why wouldn't you, why would you not want to use or try it? So, I love the space you're in. What's a breakthrough for you personally? Not as a company because I, you've got a lot of breakthroughs going on, but personally as a leader, what have you learned in this journey that has been, you feel like, very much a growth spurt for you?
Stefan Gunnarsson: So I had never built a startup in the VC world. This is the first time I actually dabble in the VC realm and that's, that's a rough one. We went, I mean I opened that game beginning of last year. We entered Techstars in... we did three months there and that was revealing, that was interesting. I thought I had seen a lot of things but you actually start from scratch. Uh and you build yourself up. The, what you have maybe is the resilience, but what you'd learn, what I learned during these three months over there was impressive and, and I, I, I still today I, I go back to that and, and use that over and over again. So yeah, that would be, that would be the main thing. Yeah.
Jake Aaron Villarreal: So a good framework of how to kind of build and start a company, launch it, get investment.
Stefan Gunnarsson: Yeah, that's great. Yeah. And it's, it's this, you know, you start raising, you never stop raising. Once you're in that game, you're, you're always building value and you're, you're raising your caps and your, your valuations. And next round, you close a round, you go into the next round. And even though you're profit-, I mean today we're turning profit technically, but you're still raising. You never stop raising. You're always thinking about the next round. Yeah. So yeah, I, I would say that that was never stop learning, I guess.
Jake Aaron Villarreal: Yeah. I love it. There's investors listening to this show. How much have you raised so far and what round are you in?
Stefan Gunnarsson: We're in seed, seed round. We're closing. We're actually closing that seed round. We've raised a little bit over 2 million. 2.4 target. We're reaching the target now. We'll close that round and then we'll think about a priced round Series A coming soon. We're actually, pro- technically we're probably past, we probably should be in the A because it's just, it's just go right now. But yeah, we're, we're moving into that stage now.
Jake Aaron Villarreal: That's really cool. Well, I can't wait to catch up with you, Stefan here as things continue to grow and, you know, we'll do a follow-up call with you. But if anyone wants to find your company or find you, where do they go?
Stefan Gunnarsson: They go on proptexx.com and we have a little form there that says, "I'm interested in what you guys are doing." It will come to me automatically and I'll reach out for sure.
Jake Aaron Villarreal: Very cool. And just for the listeners, that's P R O P and then texx.com. Very cool. All right. Well, my name is Jake Aaron Villarreal. I'm the host of the show. Thanks for listening to all the listeners. And Stefan, thanks for coming on and sharing your story and having the courage to do it. It means a lot to me. I, I will continue to tell these great stories and follow up as they go. And if you ever want to get in touch with us, you can find us at matchrelevant.com. Signing off for now. We can't wait to catch up with you all in the next episode. Until then, take care.
Before we wrap up, I want to give a big shout out to all the entrepreneurs that have joined and make this podcast possible. And for all the listeners for listening, it means the world to me if you chose to spend your time with us today. I'm your host, Jake Aaron Villarreal, signing off for now, but can't wait to connect with you all soon on the next episode. Take care.
This show is sponsored by Match Relevant, a company that helps venture-backed startups find the best people in the market. And they do it in three simple steps. First, they sit down with founders to understand their story. Second, they tell their story into multiple candidate channels. And third, they schedule interviews within 48 hours. Find us at matchrelevant.com to learn more about how we do it.
.jpg)
.webp)
.webp)
.webp)
.webp)
