The startup QuintoAndar, one of the Brazilian unicorns born in 2019, has a new home: a set of three towers in Vila Madalena neighborhood , in São Paulo. The company, which started last year with 350 employees, now exceeds 1.1 thousand, and presents itself as the largest residential rental real estate company in the country. The startup now has BRL 28.9 billion (almost $7 billion) in assets under its management.
Unlike a traditional real estate, the QuintoAndar model does not require any type of guarantee from tenants (neither guarantors, nor guarantee insurance). In addition, the entire income assessment and contract negotiation process is done digitally, which also helps to save time. If, in general, a transaction of this type takes 10 working days in the main Brazilian capitals, in QuintoAndar this period drops, at least, by half.
According to QuintoAndar’s head of communication, José Osse, more than 2.2 million visits were scheduled by the startup’s platform last year. On the one hand, almost BRL 350 million was saved by tenants who used the company’s services and did not have to pay any kind of bail. On the other hand, the owners who rented via QuintoAndar in 2019 saved about BRL 190 million in IPTU (a municipal tax charged in all Brazilian cities) and condominium fees.
How was that possible? Reducing bureaucracy in renting is the pain that QuintoAndar wants to cure in the country (and in Latin America, one day).
The startup began in 2012, with a small operation in Campinas, a city to the interior of the state of São Paulo where one of QuintoAndar’s founders André Penha finished his undergraduate degree. Three years after its foundation, QuintoAndar signed a contract with the insurance firm BNP Paribas Cardif, which allowed the startup to offer something truly new: a free security deposit for tenants and landlords. And with that, the startup went on to analyze, of its own accord, the credit of the tenant and approve it in record time: three working days.
The BRL 250 million received in November of 2018, in an investment round led by the North American fund General Atlantic, with the participation of previous investors, Kaszek Ventures, Qualcomm Ventures, and QED, were decisive to scale the startup. From there to here, QuintoAndar jumped from three to 30 Brazilian cities, including state capitals such as São Paulo, Rio de Janeiro, Belo Horizonte, Brasilia, Goiânia, Porto Alegre, Curitiba, and Florianopolis.
It was this scalability capacity that caught the attention of giants, such as the Japanese fund SoftBank a year later. In September of 2019, QuintoAndar announced an investment round led by the fund that raised $250 million and turned the startup into a unicorn.
QuintoAndar spreads its wings to buying and selling properties
In November 2019, the startup announced its entry into a new segment: buying and selling properties. The tests began in earnest in December, in São Paulo, with the registration of properties owned by people interested in participating in the new operation.
Now in January, the first ads were posted on the platform, allowing buyers to search, book visits and send their first offers.
Brokers and real estate as partners, not enemies
In comparison with its beginnings, when QuintoAndar was called the “Uber of real estate agencies” and appeared to represent the end of mediation in such a traditional sector, quite a few things have changed. The startup does not reveal the number of agents and photographers that work for the platform, yet it has disclosed that it already has more than 15 real estate agencies in the condition of partners—and it’s using the newest Softbank’s contribution to increase this number.
In 2019, the company paid BRL 30 million in commissions to its partner brokers and BRL 4.4 million in incentives for participants in the affiliate programs IndicaAí (a referral program between property owners for the platform) and Parceiros da Portaria (a program where the porters of large condominiums receive commissions if they refer clients to QuintoAndar).
As soon as the year started, and the first Brazilian unicorn of 2020 was a real estate startup: Loft, focused on buying, renovating and selling real estate properties. Still in 2019, the modern real estate company Vitacon launched a spin-off called Housi, which offers rental on demand and management of residential services.
Although one may soon enter the other’s segment, expanding business models, the rise of other similar companies in the industry only confirms how much the Brazilian real estate market needs a revolution.
“The Brazilian residential market is extremely large and includes several players. We ourselves are already the largest residential real estate company in the country, and yet, given the size of the market, there is still plenty of room for us to grow. It is always good to have other companies in the market, even with different models and businesses, as this makes everyone more attentive and focused, which, in the end, is good for us, for the competitors and, mainly, for the customers “, says Osse.