Any person that had to look for a place to rent in Brazil knows that it is one of the most daunting tasks in the world. Normally, those that do not have a cosigner, will need to pay two to three months of rent in advance or acquire a security deposit that costs 12% of an annual contract, on average. In addition, the entire process tends to experience delays, close to ten working days. It was that pain that inspired the foundation of the startup QuintoAndar by the Brazilian entrepreneurs André Penha and Gabriel Braga.
The startup began in 2012, with a small operation in Campinas, a city to the interior of the state of São Paulo where 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.
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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 500 to 1 thousand employees, and from three to 25 Brazilian cities, including the following state capitals: São Paulo, Rio de Janeiro, Belo Horizonte, Brasilia, Goiânia, Porto Alegre, Curitiba, and Florianopolis.
It was at that scale which caught the attention of giants, such as the Japanese fund SoftBank. In this month of September, QuintoAndar announced an investment round led by the fund that raised $ 250 million and was valued at more than $ 1 billion.
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According to the regional manager of QuintoAndar, Arthur Malcon, the total amount will be used, basically, for the expansion of the company in Brazil, with the development of new products and services, and the hiring of new talents at the leadership level in QuintoAndar, in addition to a constant investment in technology (only in 2019, BRL 70 million were spent in this respect).
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 15 real estate agencies in the condition of partners—and intends to use the newest contribution to increase this number.
While we accelerate our growth rate, they [the real estate agencies] had an increase of more than 30% in the number of contracts signed per month in comparison to how they performed before joining QuintoAndar.Arthur Malcon, regional manager of QuintoAndar.
It’s not enough to rent quicker
This year, QuintoAndar launched a pilot project in which it handles the costs of renovating a property before placing in the market as a rental. Taking its cue from the production logic of streaming services, the service was christened as QuintoAndar Originals. “Today, renting is twice as fast through QuintoAndar, than through the traditional model. The next phase was to look at the quality of the rental properties, so as to bring unique options for our clients, improving their rental experience, even more” said Malcon.
For the time being, the program is anchored in the Centro Expandido of São Paulo and envisions rental properties of up to 100 square meters.
Another important aspect in the startup’s radar is its expansion beyond Brazilian borders. QuintoAndar knows that it has a business model ready for that. “Many [of emerging countries] have common pains with those that we have here and make sense to us. (…) This is an issue on which we should have news next year,” said the regional manager.