Navigating Vend’s Vertical Transformation, With Vend CEO, Christian Halvorsen

Thanks a lot. I'm very happy to be here. Thanks for inviting me.

Exactly. Yeah. I'm sure not many people have heard about Vend because we just became Vend actually and we changed our name from Schibsted Marketplaces to Vend. I'm sure many people in the industry know about Schibsted because we have a long history and legacy of operating within the marketplace space in Europe in particular but also in other parts of the world. But now we have become Vend after a split from our media division that happened last year. So we operate online marketplaces in the Nordics within our four core verticals: mobility, real estate, jobs, and re-commerce. And we have the leading positions in all the four Nordic countries: Norway, Sweden, Denmark, and Finland.

Exactly. So our biggest asset, most valuable asset, is Finn in Norway. That is a horizontal platform operating the leading positions in mobility, real estate, jobs, re-commerce, and actually travel even. And it has an incredibly strong position in the Norwegian market. I think that is known by quite many people. Then in Sweden we have Blocket, which is the leader in mobility and in re-commerce. And then in Finland we have two brands: Tori, which is a re-commerce leader, and OTO, which is a real estate platform. And then in Denmark we have DBA, which is a horizontal platform mostly re-commerce, and Bilbas, which is mobility platform. And then we have some other smaller brands, but those are kind of the main ones.

Yeah. First of all, it's funny that you mentioned Trade Me because we have always compared ourselves to Trade Me because we both operate in small markets at opposite ends of the world. And the CEO in Trade Me now, he was the CEO in Norway for us also, so Anesh is a good friend of mine. No, um, I think it's an excellent question and there are certainly learnings between the verticals. But I would say that we come from a history, a legacy where we operated as horizontals, really looking at this as something where each vertical strengthens the totality in a way. But I think what we are on a journey towards now is to become a much more vertically oriented company. I truly believe that user and customer needs are getting more and more advanced. And then the needs in real estate are very different from the needs when you sell a t-shirt. You have to go really deep within each vertical to develop the best solution for both users and customers. So we are really on that journey and we can come back to that more in detail.

I don't know.

Good question.

I actually don't think the problem is with the user and the customer. I think that is actually the whole reason why we are becoming more vertical oriented is to satisfy user and customer needs in a better way. So I think that is actually where the pull is coming from, that they want more, they say real estate specific services, and that is kind of forcing us to change internally. And then I think you are absolutely right that as an organization we have certainly operated in a certain way for many years, and now we are more and more operating in a different way. What we have done is that we also come from a legacy where we have operated as standalone countries. Norway, Finn operated on its own. Blocket in Sweden operated on its own. Same in Denmark and Finland. And these remember these are small countries, right? In total the Nordics is 25 million people. So what we have also done is to get this vertical power, vertical scale. We have integrated our organizations across the Nordics into one organization and then we have structured it along the vertical. So now we have a pure real estate organization and same for mobility and so on. And what has been very interesting about that is that you actually change the discussions in the organization because in the past we thought about these cross-vertical topics, but now you have a leadership team for real estate that every day, every hour, every week work on solving the biggest topics within real estate. And it really drives deeper knowledge, deeper competence, and this agenda around okay, what do we need to do to be the best real estate portal in the Nordics. So it's been a transformation from an organizational perspective, business model perspective, and I guess also technical perspective in some way.

Well, that is a great question and as I said, it's a combination of using the people we already have, the talent we already have, and many of them have been working with our verticals, right? So it's not like we don't know anything about real estate. We know a fair deal about real estate and mobility and so on. It's just that now you can concentrate on one thing and go even deeper. So one element of it is about building and deepening the competence we already have. But the other part is to also bring in new competence. And when we hire people, we do that now in these verticals, and then of course we will always look at what kind of talent will strengthen our position. Do we have someone who can come from real estate in some way or mobility in some way? It doesn't, I mean there are not that many other portals in our part of the world that we can attract from, but you can from adjacent industries, right. And we also see now that it's quite interesting now that we have become Vend, and the marketplaces business is its own business, not part of the Schibsted media conglomerate. We are much more part of a global talent market, so you can attract talent to our businesses.

Okay. I don't know if you're, are you aware of what OLX did in Brazil?

Yeah. So they had clearly OLX being a horizontal player in the Brazilian market, very strong, and had gone down the verticalization into real estate. But the problem was they sort of hit a bit of a wall in the process because they're up against strong vertical players. So their solution was to buy a large, in this case a company called Grupo Zap. They did it, which is different to what for example OLX did when they said I'll go deep into vertical into real estate and they took on Cello in that market and did a very good job at doing that. Or Trade Me did as well. As we brought up Trade Me before, they said we're going in deep into real estate. They built out a strong contingent of people within the real estate segment. They actually years ago, to help transform it, hired the former CEO of realestate.co.nz to work for them and to help lead that effort. I mean that's like maybe 15 years ago now. I think I've lost track of my years. So when you think about hiring great talent is good, have you thought about acquisitions?

Yeah.

Your examples are really good. Let me, we actually used all the tools in the box here. So in Norway we have the clear number one position within real estate. So there it is mostly about nurturing the talent we have. In Sweden we didn't really have a real estate position. So there we acquired actually two companies within real estate: Kasa, which is a transactional rentals business, and HomeQ, which is a SAS platform for professional landlords. So there we did the acquisition route to get a position within real estate and within rentals. And in Finland we didn't have any position in real estate at all. There we acquired the number two player. And then we infused that company with marketplace knowledge from our other operations to take it from number two to number one. And over the course of a couple of years, we have actually been able to move that company from being a number two player to become number one on all metrics like brand awareness, content, traffic, and all those things that matter to users. So I would say we have a wide palette of different tools that we have used in this area.

I think it's a hard question to answer. It's like how many pages are there in a book in a way because it kind of depends on the context. I think in Finland we couldn't have done it another way. You can't just start a real estate portal and think you can outcompete the number one player. But buying number two and competing from that is certainly possible. The same in Sweden with Kasa. There I think buying that startup company and putting in resources to scale it was a real accelerator to take a position in that market. You probably could have done it from the beginning, but to buy a scaleup was a much faster path to the market.

I wouldn't compare it entirely with CoStar because the Finnish market was much more a duopoly than being a market where you had a clear number one. You had two positions that were almost the same size but one was slightly ahead of the other, and that is different to for example the UK market and so on. So here it was more about okay there is a duopoly, we think that with our experience, our capital, our knowledge and so on, we can actually take steps, and we have been able to prove that that is possible, but it's a slightly different situation.

Yeah. Well, it is right that the mobility business area is the largest and most valuable part of our company. It's around half of our market cap. But then real estate is the number two in terms of value. And I think when I meet with investors, with shareholders, many of them are as excited if not more excited about the opportunity within real estate. And what we particularly see is that there is a great opportunity in applying some of the best practices that other players in the world have done when it comes to pricing, packaging, go to market, developing better tools for the agents, and so on. So that is really our most important playbook within real estate is to develop a position in Norway. And then in addition we have the two other plays that I mentioned: the transactional rentals and winning the position in Finland, but they are slightly more long-term plays than what we can do with the really strong position that we have in Norway in Finn.

Well, I mean, it's not like we are reinventing the wheel here. There are many players who have executed on a monetization strategy in real estate. So of course we are doing many of the same things: providing better tools for the agents, and then being good at packaging these in different packages with different value propositions: small, medium, large. And taking out the different price elasticity in the market. And then there are many levers that we are using as part of that. But it's not a one-time effort, it's much more about being consistent and structured over time in how we apply these monetization tools. Everything from how we are evolving discounts over time, how we are using dynamic pricing, the value of the property as one tool to differentiate prices, how we are using geography as one, and of course the tools and the exposure and visibility products that you have in these different packages. So I don't think it's rocket science compared to what others have done in the past.

So we are inspired by Hemnet. We're following them very closely. And it's very interesting because they have a super strong position in Sweden. Our position in Norway is equally strong. And the Norwegian economy is very strong and so on. So the way I see it is that our potential is equally big as it is in Sweden and they have a vendor paid model. We also have a vendor paid model in Norway. So there is a large opportunity for us to grow that market. And if you look at our price now compared to what it costs to sell a house, it's just a small fraction of the cost. And then the structural difference between Norway and Sweden is that it's not possible to give commission back to real estate agents. That is kind of part of the model in Hemnet. We cannot do that legally because that is not allowed in Norway. So instead, the way it works in Norway is that the agents go out and sell what's called marketing packages to the property sellers. And then they actually take our product and they package it in a larger package that maybe includes some Facebook advertising and some other things, and then they actually make a margin on our product. And the way we think about it is that our product, first of all, it's not one product, it's many different things: small, medium, large, and so on. But we serve a larger share of the wallet because it's the place where you find your home, there isn't any other place in a way. So that's kind of where we are focusing a lot: how can we increase our take rate in a way in Norway.

Absolutely. So Kasa, as I mentioned, is a transactional rentals company that we acquired. I think it was in 2019 or maybe 2018. So then it was a small startup. And we acquired it with some founders and they had an earn-out model. So they were really incentivized to grow this company and did so very successfully in Sweden and really found good product market fit in Sweden. Then the founders left, was it a year or two ago, and now we put in new management in the company, and it is still growing very successfully in Sweden. But we also see that when we look at the Finnish market, when we look at the Norwegian market, the rental position is really interesting. There are so many rental properties in this market, and all trends are pointing towards that being a growing market. So first we launched it in Finland, and that was done a year and a half ago. And we saw that the same product that we had in Sweden works well also in Finland and started to grow very nicely also there. So then, of course, the strongest position we have is in Norway, and it's actually also the largest rental market. So it was always our plan to launch it in Norway as well. And we did that two or three weeks ago. So it's a little bit early to tell, but we've had our first sales and it's looking very interesting so far. So absolutely.

So, we don't have any long-term plan to integrate it. It might happen like you said that at one point integrated and becomes part of the Finn product, the Blocket product, and so on. The way we think about this is that when we acquire a startup like this, when there is a completely new product that is a new value proposition that needs to find product market fit, grow in the market, and so on, then it is so valuable to have a team that is just super focused on that one mission. So instead of distracting them with everything else going on around in our company, we just say, this is your mission. Focus on that and only that and be the best in the world at transactional rentals. So that is kind of what we have done with this company. The same is also true with the NetBill and AutoX, which are some scale-up companies that we have in mobility for example, and that works really well in that phase of a company's life. That is our experience. What happens in the long run remains to be seen, but we are far away from that still.

It's a very interesting model. So, you're right that in the past our business model for rentals was pay per ad. So you paid, I mean 200 kroner, 300 kroner to list your property for rent on one...

Of our sites, it was a nice model. It worked all of that. But then came this company along, Kasa, that had a different model. It's free, but the value proposition is all around managing the rent during the lifetime of the rent. So instead, the model is that we charge 5% of the actual rent over the entire lifetime of that rental. And if you add it up, it becomes 10 to 20 times more than what the listing fee was. But of course, you also have to create more value for both the landlord and the tenant. So we include things like a better search experience, a better way to present yourself as a tenant. We manage the deposit, there is insurance included, there are many things. We actually manage the actual rent as well. So there are many things that we include in that service to make it worthwhile for both the tenant and the landlord.

Yeah, absolutely. I mean, it is right that AI is something that to some degree is keeping me up at night, because the pace of change is just so immense. And you just have to think about what is there today but what will be there in two years. It can be something completely different. And there is always this threat of disintermediation. What happens if it's a ChatGPT that you go to to find your next home rather than go to Finn or any other property portal? I don't see that happening at least not now. We have to be mindful that it can happen, but right now I see mostly opportunities that AI can be something that we can use both to drive efficiency internally and also to improve our products. And there are many different things that we are doing across the different verticals that we have. You have things like natural language search that instead of just using filters and those things, you can actually explain what you want to be looking for. Even the AI can figure out, you've been looking at these things, then you are probably looking for something like this, and then they will present you with something else. So really creating a much better and smoother and more natural search experience is part of it, and that's also where the agentic AI comes in where you can have someone do that on your behalf. And then there are probably many different small features that you can do within the product that are AI-driven. You mentioned one, Simon. We launched a small feature actually this week on our real estate portal in Norway that is AI-driven, and it's something as simple as using AI to automatically find out where in the floor plan a picture is taken. So when you look at the floor plan, you can click on a room and you will get all the pictures from that room. It's very simple, but it's kind of driven by AI, and I think there are just a multitude of those things that in total will create a much smoother experience for users and customers. Yeah, I was talking to another company yesterday who has an AI tool for designers and architects and so on. And we're looking at amongst a range of things where it's getting its customers from, and I almost fell off my seat when they're getting something around 15% of their customers from ChatGPT. It was an enormous percentage. So I think the speed by which technology is advancing and could potentially disrupt will actually surprise us all.

That's a great question. First of all, I think we come from a legacy where we have always said that if we are not disrupting ourselves, then someone else will do it. So you kind of have to be ready to destroy your old business model in a way. So I think we're going into it with that mindset. That means we are always exploring new ways of doing things. And we are very much connected with peers in all our verticals and exchanging knowledge about what are you doing, what's working, what's not working and so on. So I think that is part of keeping in touch with what's happening in the world, but I also think you have to look at completely different industries and what's happening there, because that might be a signal that can affect you in the longer run. I think the travel industry will probably see more disruption from agentic AI sooner than other verticals like real estate as an example. So following what's going on in travel is probably going to be interesting for real estate as well. So I think that is part of it. Internally, we have created one AI unit that is around 40 people in our organization that works half of them with process improvement, half of them with product. But they are not the only ones working with product; they are just more kind of helping the vertical teams to really apply AI in the best possible way. So it's a kind of accelerated unit to ensure adoption of AI across the organization. So that's how we have approached it.

No, so we've had it for around a year. But it has been scaled up over that time. We have some things that have been really successful. We are for example trained basically all employees in different AI tools, whether that is ChatGPT or more co-pilot tools for developers, or whether it's more specific tools for salespeople or customer support and so on. So a lot of it has been around just educating people. Then we have also now more and more seen traction in the different product development teams in starting to adopt AI and create AI-driven features. I would say so far they are relatively small. Nothing has been really moving the needle in a big way. But maybe it's a little bit too soon to expect that also. But we are seeing more and more traction in this area. And then I would also say that one interesting initiative that we're running from this department is that we're doing something we call Bob the Builder, that I also told you about last week, which is actually creating the tool chain for non-engineers to create things with code. So that product managers, for example, describing with natural language a prototype that they want to create, and you actually create and build the code and actually deploy it to some production environment so that you are able to test things with both users and customers in an extremely rapid way. And it's still too early to say how that is going to work, but it's been a real interest among people and employees across the organization to be part of that initiative.

Yes, but it's not only necessarily prototyping something that is used towards users and customers. We see that some people who have signed up for this initiative internally could be from HR or finance or something like that, and they see that they have a task that they do every single day. They think it can be solved by AI, but they don't really know how it can be solved. Then they can actually build a solution for it with this tool. So it's a bit wider than just for prototyping product things.

It's still in scale mode. So we are now in the first wave, we are rolling it out to 10 people. Only 10 just to harden the tool chain and so on. But the goal is to have 75 people trained and capable to use this by the end of the year.

It's this AI unit that I talked about.

Yes. In their own mission statement, they are actually saying that they're going to make themselves obsolete. They have created this thousand-day plan. So three years, they say that in three years we should not be useful anymore, because everything with AI should be kind of ingrained throughout the organization and throughout all processes and competencies. So that's pretty clear actually.

No, no, no. I'm sending my avatar to speak to you.

Yeah, to guide your customers through the process.

Yeah, I very much agree with your point. I think there are a couple of aspects to consider in this. First of all, not everyone on a property site is there to buy. I actually think about two-thirds of our users are there just because they actually enjoy looking at all these properties. What is for sale in my neighborhood? Oh, there is my neighbor's house. What does it look like? And so on. So that will not be replaced by an AI agent anytime soon, because that's just more than anything else. I call it property.

But you are right that when you are actually in the process of trying to find a new home, you would probably like to have some assistance in that, and then maybe an AI agent can help you. And then to me, the question is who is better equipped to develop that AI agent? Is it a horizontal like OpenAI that is trying to be best in every single industry, or is it someone like us, or Rightmove, or REA, that are really deep experts in a specific domain and have proprietary data? Who will be better at creating that agent experience? I so far am of the belief that it's those specialists that will be best equipped to develop those solutions. And of course, the language models are more or less commodity now. So I think it will be very exciting to follow this space for sure.

Yeah, I think you're making a good point about the role of the agent in all of this. Towards the seller, what we see is that the seller relates very much to the agent and will very much listen to all advice from the agent because it's such a big financial element to sell their house. So they will listen to advice from them. The buyer on the other hand, this might be different from market to market, but at least in Norway, I would say that the buyers are first in touch with us, and it's only when they have been at the viewing and so on that they are really in touch with an agent. So I think we have a very good opportunity to be the first contact point, and this is where we can help you with the discovery mechanism, and then when you're there, you can probably also be assisting with the remaining steps if that is needed as well. But someone is going to do it. So it might as well be us.

Yeah. Then if I'm them, I would be rolling out one of these things pretty quickly.

That's giving us ideas on the fly. That's great. I would be thinking about how most portals I talk to, it's a sort of me too. I'm doing that as well. And I'm going, but what's going to be different? How are you going to change the game? How are you going to create a different way to differentiate yourself in the process? And that's where I do think you need to try something different in this process. And saying it's low risk. I mean, launching a buyers app is low risk. An AI-driven buyers app is minimal risk. Worst thing is it just searches your real estate listings. But I think it can do a lot more, and if it executes well and can gain trust in someone's biggest transaction, the thing that they are probably going to stress about. That's the other thing you can put into all of this the angle of stress management and mindfulness and just those very non-touchy-feely subjects, but I think it's quite important. Soft metrics. Soft metrics, yes. And I think you'll find that can go a long way to really help position you. Anyway, very happy to chat about this at a different point in time, but I think there is an angle there that people don't think about. They tend to think, I'm running a real estate portal. I'm going to work out how much I can charge the agent to advertise. Then I'm going to work out how I can get more money out of them. And that's where it tends to stop in this process. Food for thought, ladies and gentlemen. Food for thought.

No, I mean, we have already spoken about AI. So for the rest, I think it's about execution of our plan. We are in this big transformation, as I said, we are still not finished with the split from Media, we are still moving towards becoming much more vertically oriented, we haven't spoken so much about it, but we are moving to one technology platform and so on. So there are a number of things that are of big importance in our company that are the things that I spend quite a lot of time on and that I'm most excited about. And I always say to our team that success is measured in the market. We can't really measure success internally. Success is really measured by our users, our customers. They are the ones who will determine whether what we deliver is valuable. And I think that is something to always remind yourself about, because in the end, that's what's going to determine whether you are long-term successful or not, if you're able to deliver that value.

That is a good question. That's a very difficult question actually. I mean, the obvious answer is AI, but I guess the industry is talking about AI. So I don't have a clear perspective on top of my head now. I can only say that once we have always historically focused mostly on the for-sale category, but once we ventured into the rentals space, kind of a little bit by accident through this acquisition of Kasa, but once we explored that more and more, I got more and more excited about the rentals space. So maybe that is something that the broader property portal industry can think more about, because it's a very interesting, quite different market as well.

Very much so, Simon. Very much so. I'm going to need a big bonus to afford this apartment that I'm living in right now, Simon. We'll put that on the record right now.

It's been a pleasure. Thank you.