Venture Capital firms target digitization of Latin America's real estate market; Loft is now valued at $2.2 bi

After CondoConta's round, the first mover neobank for condominiums in Brazil, Loft announces the largest VC investment infusion in a Brazilian startup to date

Loft's co-founders (from right to left) João Vianna, Florian Hagenbuch and Mate Pencz.
Loft's co-founders (from right to left) João Vianna, Florian Hagenbuch and Mate Pencz. Photo: Loft/Courtesy
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  • Redpoint eventures led a BRL 6.6 million round in CondoConta, the first neobank for condominiums in Brazil;
  • Loft expects to become the fastest-growing real state startup outside of China and the United States;
  • And to ​​public listing the company in the future.

Real estate is a hot topic in Latin America right now, and the COVID-19 pandemic has further accelerated the sector. Home gained a whole new meaning because it now aggregates work, entertainment, and even fitness areas. Thus, Latin America’s proptech firms have been surfing this wave. Last week, Redpoint eventures led a BRL 6.6 million round in CondoConta, the first neobank for condominiums in Brazil. And, on Tuesday, Brazilian home-selling unicorn Loft announced it has raised $425 million from a wide range of global investors and is now valued at $2.2 billion.

“With this round, we reached a major milestone: the largest venture capital round raised by a Brazilian tech company. This puts us on the map as a company, an ecosystem and as a country,” celebrated Florian Hagenbuch, founder of Loft, in a LinkedIn’s post. Indeed, it is a bit more than the largest round of Nubank.

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We reached the largest venture capital round raised by a Brazilian tech company

Florian hagenbuch, co-founder at loft .

Further than that, while it took decades for tech pioneers such as TOTVS to achieve the billionaire valuation, Loft is now eyeing a $2.8 billion valuation just three years after its launch. D1 Capital Partners L.P., DST Global, Tiger Global Management, Altimeter Capital, Silver Lake, and CPP Investments are some of Loft’s new backers. 

Loft became a unicorn in the first days of January 2020, after it raised $175 million, the fifth-largest round in a Brazilian startup last year. Ok, so the unicorn is the apple of the investors’ eyes right now. But what does Loft do?

Buying, renovating and selling real estate in a current 4-month timeframe–yes, this is quick for a sector that has been hampered by legal and financial bureaucracy like the Brazilian real estate market. The company wants to further simplify the whole process involved in one of the greatest passions of Latin Americans: having a home of their own.

READ ALSO: COVID-19 is speeding up the digitization of Latin America’s real estate market

In an interview with Reuters, Loft’s CEO and co-founder, Mate Pencz, said the round will help the company invest in consumer experience and to increase its product offering to rental real estate, besides buying and selling homes.

With the new funding, Loft expects to become the fastest-growing firm outside of China and the United States. The company claims to operate with 30,000 brokers on the Rio-São Paulo axis. According to the startup, its operations generate about BRL 2 billion a year in real estate financing.

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“Most of these resources will be invested in increasing our portfolio, improving the process for both buyers and sellers, as well as investing in technology and data,” said Pencz. “Our financing area grew a lot last year, and we decided to expand it nationwide.”

There is also the idea of ​​publicly listing the company, but according to Pencz, there is still no timetable for that to happen. The executive ruled out the possibility of a new short-term acquisition, and the focus remains on expanding the marketplace.

READ ALSO: Brazilian real estate startup Alude raises a $3.3 million Seed round

“We have already made four acquisitions,” he stated. “The acquisitions have been more complementary to our core business; we believe in creating technologies and products from scratch.”

Real estate firms fundraising is on the rise in Brazil 

With condominiums, trustees, and client administrators all over Brazil, the main goal of the first mover CondoConta is to offer greater transparency in the financial management of condominiums.

The neobank focuses on clearing all the costs a condominium has with traditional banks while delivering transparency of transactions in real-time and automation of billets and balance sheets, thus rendering monthly accounts directly from the financial source. In other words, CondoConta eases the financial burden for liquidators, councilors, tenants, and condominium administrators who start to automate their activities. 

READ ALSO: Solfácil, a Brazilian fintech focused on solar power projects, raises $4 million and wants to serve corporate clients

According to Rodrigo Della Rocca, CEO and co-founder of CondoConta, the new round will be used to expand the team and speed up the evolution of the digital condominium experience. “The neobank is also targeting new business opportunities, such as, for example, the financing of solar energy generation systems for condominiums and cashback programs for the payment of condominium fees,” highlights Rocca in a press statement.

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