- San Francisco-based Class 5 Global, firm that led the investment, said it hoped to partner with many more Mexican startups;
- TrueHome works as a digital real estate platform and broker in Mexico City, focusing on making the process of buying and selling a home less bureaucratic and more transparent to users.
In spite of being Latin America’s second economy, Mexico, that, unlike Brazil, still doesn’t have any unicorn to the date; has a lot to develop when it comes to the startup ecosystem. “Mexico is in a state of [innovation and entrepreneurship] maturity very similar to Brazil, with the exception that there are no success stories,” said Shark Tank Mexico judge, Marcus Dantus, in an interview with LABS.
But this situation may be approaching a point of inflection: this Wednesday (4), Mexican proptech TrueHome has raised $8.8 million from San Francisco-based Class 5 Global in a Series A round. The raising marks the first time ever that the North American fund betted on a Mexican startup.
At the occasion of the new raising, Class 5 co-founder and managing partner Zach Finkelstein told Crunchbase that his firm was “amazed by the quality of the entrepreneurs emerging in the ecosystem,” and that it hoped “to partner with many more.”
The Mexican proptech works as a digital real estate platform and broker, focusing on making the process of buying and selling a home less bureaucratic and more transparent to users. For Class 5 exec, TrueHome best feature is that it’s been meeting a critical need. “Mexico has one of the highest home ownership rates in the world. With very little organized data, however, the process of buying or selling a home in Mexico is full of friction,” he stated. “Buyers are forced to deal with fake and duplicated listings and unreliable brokers. TrueHome is solving these problems by using technology to make buying and selling homes a seamless and transparent process.”
Fully focused on the Mexico City market, the startup hosts residential properties on its platform, where users can benefit from marketing services to showcase their home, legal advice, as well as real estate specialists to guide them through the process. Profits are made through a percentage fee charged for transactions carried out on the platform.
TrueHome, which previously operated as an iBuyer since April 2017, turned into brokerage services as of January 2018. iBuyers are companies that make cash offers on homes on behalf of potential buyers. “We made a couple of transactions as an iBuyer, but then as we were making offers for properties, and buying and selling them, we saw a huge opportunity to bring technology into the brokerage part of the industry to make the process more transparent and simple, and help our customers save money on the transactions,” Raul Villarreal, TrueHome founder & CEO told Crunchbase.
The new funding, which, besides Class 5 Global, had Brazil’s Monashees leading the round, as well as FJ Labs out of New York and Mexico-based Mountain Nazca; will back TrueHome’s goals of becoming “the No. 1 broker in Mexico City” and reaching 20% share in this market.
Cofounders Zach Finkelstein and Joel Ayala have previously led deals in the startups CargoX and Fresha, and their San Francisco-based Class 5 Global is an old acquaintance of emerging markets, especially Latin America, the Middle East, and Southeast Asia.