Stoa Israeli-American Real Estate Start-up laid off most of its employees - only 20 stayed

Stoa, an Israeli-American start-up company specializing in real estate solutions, has recently announced significant reductions in its activities. The company has laid off most of its employees, with only about 20 individuals remaining out of its original workforce of approximately 100 employees. Stoa, which has not hired workers in Israel since the COVID-19 pandemic, is also halting its expansion and development efforts and is exploring offers to sell its assets and operations. The company currently owns hundreds of real estate properties in the United States.

According to Stoa, these changes are a response to the evolving dynamics in the real estate market, which have impacted the company's operations. The company has cited the drop in real estate prices resulting from increased interest rates in the United States as a contributing factor. Moreover, Stoa's institutional clients have become more selective and discerning in their property purchase decisions, posing further challenges to the company's business activities. Additionally, Stoa has acknowledged that its rapid growth was accompanied by inefficiencies.

Stoa was established in 2017 by Israelis Or Agassi and Tom Sela, along with Yonatan Sargosi, who has since left the company. Headquartered in Phoenix, Arizona, Stoa has raised approximately $300 million in funding to date, consisting of $100 million in equity and $200 million in debt. The company's major investors include Israeli investor Oren Zeev and Eran Barkat's BRM. In May 2022, Stoa announced a fundraising round led by Zeev, raising $50 million and valuing the company at $500 million, according to PitchBook.

Operating in the American market, Stoa positioned itself in competition with "flippers," companies engaged in the quick purchase, renovation, and resale of real estate. Stoa offered credit allocation to companies and operated a platform to facilitate renovation management and sales. However, the recent difficulties faced by Stoa have led to the downsizing of its workforce even before the current wave of cutbacks.

Stoa's downsizing follows the closure of Reali, another American company founded by Israelis, which also developed a real estate platform. Both Stoa and Reali received financial backing from Oren Zeev, and their closures highlight the challenges faced by start-ups in the real estate solutions sector.

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