When people started looking more carefully at their home spaces, pushed by forced social isolation measures linked to the COVID-19 pandemic, a change in behavior kicked off. Meanwhile, in Brazil, Rio de Janeiro-based proptech EmCasa (which literally means “at home”, in Portuguese) was prepared to address these changes. Focused on buying and selling real estate properties in São Paulo and Rio, the startup saw its revenue more than double in 2020, from previous BRL 8 million in 2019, to BRL 18 million reached last year.
“Part of this movement happened due to the new remote work scenario in the pandemic, as many people sought to move to a bigger and more comfortable property, in order to adapt to this new reality of spending more time at home. In addition, the drop in interest rates to 2% boosted the volume of real estate financing with lower rates and greater access to credit,” says co-founder and CEO Gustavo Vaz.
In spite of two months of short demand, during April and May, EmCasa managed to grow 125% in 2020 thanks to a mix of external factors favoring the real estate market in the country and a solution that was already there when things changed. “At EmCasa this market rise was very amplified because we always had a digital DNA. We already had these features that people started to value like the 3D virtual tour, remote visit, professional pictures, algorithms to understand precisely what type of property you want, instead of having to visit several ones.”
The virtual tour, as mentioned by Vaz, saw more than 400 thousand uses during 2020, while the remote visit reached a quarter of the total monthly visits at EmCasa’s properties since the beginning of the pandemic.
A survey conducted by the startup based on filters applied on EmCasa’s website was able to measure the real estate rise during the pandemic. Apartments were featured as the most desired properties in Rio de Janeiro and São Paulo, leading the ranking with 75% of searches, while 25% opted for homes. Still on EmCasa users’ preference, a minimum size from 60 to 100 square meters and a maximum of 80 to 150 stood out, as well as morning sun for 41%, balcony (36%), swimming pool (18%) and gym (9%).
With everything it needs, now, EmCasa expects to beat BRL 50 million in revenue for 2021. “BRL 50 million in revenue, but when we think about the total processed volume, it is above BRL 1 billion,” the exec stresses.
To get there, Vaz summarizes the strategy into three pillars: expansion to other neighborhoods in Rio de Janeiro and São Paulo, as well as to other cities; investment in technology to increase its digital tools offer; and growth of its properties base. In 2020, EmCasa managed to double the number of properties it had compared to 2019. For 2021, it is expecting to increase this number by 125% until the end of the year.
As for entering other cities, Vaz says the company is still evaluating its options, taking into account aspects such as city GDP, real estate volume and competition, but it is set for the second quarter of the year.
Hybrid model: technology and tailored service
A sector that was particularly left behind compared to others such as fintech or mobility, proptech – an industry that adds technology to the real estate market – is finally gaining ground in Latin America. In early 2020, São Paulo-based Loft raised an impressive US$ 175 million Series C round that prompted the company to reach the coveted unicorn status.
Mexico and Colombia-based real estate startup La Haus was another player catching the eyes of investors with a US$35 million Series B round raised in January this year to expand its portfolio and geographic reach to other parts of Latin America.
Vaz understands that this move to proptech, although recent, is quite needed. “The are several problems to solve: loan, rent, purchase and sale, tools for real estate agents. There is a lot of space to build and improve the services,” he points out. EmCasa was the first company in Brazil to bring the 3D virtual tour massively. I know that because I brought the first cameras from the US myself (laughs)… and today you see traditional real estate using 3D tour and this improves the experience in the market as a whole.”
Founded by Gustavo Vaz and Lucas Cardozo in 2017, the particular pain point EmCasa decided to call its own was buying and selling. “The purchase of a property is the most important transaction of one’s life and the buying experience is unfortunately not as good as it should be. Those who have to visit several properties, don’t find a fit, pay a lot for it, don’t have access to credit, goes through the risk of fraud in the documentation and then they have to remember it with a sour taste in the mouth for 30 to 40 years. That was the pain that we wanted to address.”
Addressing the entire purchase and sale process from online searching and visiting, to negotiation, document collection, credit approval and delivery of keys, it isn’t just by embedding technology in this journey that EmCasa places itself apart from competitors.
Instead of working with freelance real estate agents, the startup has a team of sales specialists, called concierges, dedicated to three tasks: strategy (especially defining the geographical location of properties), on-site visit, and negotiation. According to Vaz, while the autonomous real estate agent in Brazil makes, on average, 2.5 transactions per year; EmCasa’s concierges closes 16 deals, over 6x more, in the same span of time.
“This not only gives us efficiency but is also about user satisfaction. Digitization in the future will become a commodity, everyone will digitize, even the most traditional real estate,” Vaz emphasizes. “We take all this factor of concierges, of humanization. very seriously, because it is also the service that customers love the most. Our NPS is currently at 76. It is something that we plan to allocate more and more resources.”
With 60 concierges allocated between São Paulo and Rio, 20 people in technology, and 50 spread across other areas, EmCasa has currently a team of 130 employees in the company. For Vaz, it is thanks to this hybrid model of technology and humanization that EmCasa is able to bring efficiency and tailored service to best adapt to the user experience. “We don’t seek to uberise our operation and work with tens of thousands of freelance real estate agents. Our model is unique in that sense.”
With about US$ 11 million in funding since the beginning of its operation, backed by VC funds such as Maya Capital, Monashees, and Canary, EmCasa added, in 2019, the credit service to its product portfolio. “So if you want to buy, you can both find the right property and get cheaper real estate credit, as we are integrated with all major banks and can make one auction with these banks to optimize your credit,” Vaz explains, saying that the startup expects to enter other markets such as loans with collateral and consortium. “For now, the focus is on buying and selling and as it grows we add more products to the journey.”
As for internationalization, the exec says he doesn’t overlook the opportunity. “We have plans, mainly because of the pains that exist in Brazil are also in several other markets. Our solution fits these countries, especially Peru, Chile, Mexico and Colombia. Does it make sense to enter these markets before taking EmCasa across Brazil?” he deliberates, saying that he expects to expand to several cities by 2022 and 2023, in a sweet mix between Brazil and Latin America.