La Rosa Holdings Corp.

La Rosa Holdings IPO

ReAlpha Tech filed terms for a direct listing on the NASDAQ on April 18, 2023. The price range for the shares was set at $10.00. The total number of shares offered was 4.2 million, although the deal size was not specified.

Company Overview & History

ReAlpha Tech Corp is an early-stage company that develops and uses an artificial intelligence-focused technology stack to support retail investor participation in short-term rental properties. These properties are real estate units listed for rental terms.

The company presents retail investors with the chance to partake in short-term rental properties it plans to acquire by offering interest in each property portfolio.

ReAlpha Tech primarily generates its revenue from short-term rental revenues accrued from the rental of its properties via Airbnb and other digital hospitality platforms.

Financial Performance

Year	Revenue($B)	Net Income($B)	EBITDA($B)	Operational Cash Flow($B)
2022	229.6	-3.2	-2.88	N/A
2021	0.78	-0	-0	N/A

Business Model

ReAlpha Tech has a unique business model that combines the use of artificial intelligence (AI) and machine learning with real estate investment.

The company uses a proprietary AI-driven algorithm known as reAlphaBRAIN to source and score properties from the wholesale market.

This algorithm predicts the viability of each property for the short-term rental market and the projected long-term value.

The company also plans to allow investors to buy equity in specific properties, providing opportunities for both short-term passive income generation via Airbnb and equity-driven capital appreciation.

Furthermore, reAlpha Tech uses a fractional ownership model where the company maintains 51% ownership, while the remaining 49% is broken up into smaller pieces and made available to everyone on reAlpha’s broker-dealer managed app.

Additionally, reAlpha handles all the logistics that come with owning and operating an Airbnb vacation rental, including necessary renovations, furnishing the properties, and listing them on Airbnb.

The company’s goal is to democratize short-term rental real estate investing, simplifying and demystifying the process at every stage.

Investors who invest at least $1,000 in reAlpha through its Regulation A+ offering become official reAlpha shareholders, and they have the potential to benefit from the combined performance of all properties through the company’s performance, not just one property.

In addition, reAlpha provides shareholder-level investors the opportunity to stay for free at any reAlpha-owned Airbnb property.

ReAlpha Tech’s approach to real estate investment has the potential to yield alpha-level returns for shareholders and members, offering passive income from rental revenue and potential appreciation of their property.

Early shareholders can also potentially expect venture capital-like returns over a longer investment horizon.

Risk Factors

Some of the general risks involved for ReAlpha Tech include regulatory changes and market saturation.

The short-term rental market has seen increased regulation in recent years, with new rules and regulations being introduced to address issues such as housing availability, zoning, and safety. These regulations could add an extra level of complexity to ReAlpha Tech’s operations.

Furthermore, the short-term rental industry is becoming increasingly competitive, which could pose a risk to ReAlpha Tech’s ability to differentiate itself and attract and retain customers1.

Market Opportunity

The short-term rental market, which ReAlpha Tech operates in, has experienced significant growth and evolution over the last few years, and is expected to continue growing.

Increased use of technology, growth of alternative accommodations, increased focus on sustainability, and continued growth of the industry despite an impending recession are some of the key trends in the market.

As travelers look for different or more-authentic accommodations, traditional hotels and basic short-term listings may encounter more competition.

With its proprietary AI-driven algorithm, reAlphaBRAIN, ReAlpha Tech is well-positioned to take advantage of the increased use of technology in the industry

Competitors

Roofstock
Ohmyhome
OwnHome
TruMid
Fundnel
Fortia
FundGuard

Key/Fun Company Facts

ReAlpha Tech is a digital marketplace that facilitates real estate investment in the vacation rental sector, with a focus on short-term rental properties.
The company was founded in 2020 by Monaz Karkaria.
ReAlpha uses a proprietary AI-driven algorithm, reAlphaBRAIN, to source and score properties from the wholesale market.
Co-founder and CEO, Giri Devanur, has over 25 years of IT experience and previously founded WinHire, a personnel management software company that was later merged with Ameri100 Inc., which went public at the end of 2017.
Co-founder Monaz Karkaria is a longtime real estate investor who sold some of the initial Dallas properties to the company.
The AI system reAlphaBRAIN is designed to mimic Karkaria’s decision-making process in evaluating potential properties.
ReAlpha was established in Central Ohio due to a fortuitous family gathering that led co-founder Giri Devanur and his wife to fall in love with the area.