Brazilian proptech start-up QuintoAndar secures $ 300 million for a valuation of $ 4 billion – TechCrunch
Fintech and Proptech are two sectors that are experiencing explosive growth in Latin America, as financial services and real estate are two categories in particular that are in urgent need of innovation in a region.
Brazilian QuintoAndar, who has developed a real estate market focused on renting and selling, has seen impressive growth in recent years. And today, the São Paulo-based proptech announced that it has closed on $ 300 million in a Series E funding round that values it at an impressive $ 4 billion.
The tour is remarkable for several reasons. On the one hand, the valuation – high by all standards, but especially for a LatAm company – is a four-fold increase from when QuintoAndar raised a $ 250 million Series D in September 2019.
It should also be noted who supports the company. Silicon Valley-based Ribbit Capital led its Series E funding, which also included participation from SoftBank’s Latin America-focused innovation fund, LTS, Maverik, Alta Park, an asset management fund undisclosed US-based with over $ 2 trillion in AUM, Kaszek Ventures, Dragoneer and Accel partner Kevin Efrusy.
Having backed Coinbase, Robinhood and CreditKarma, Ribbit Capital has historically focused on startup investments in the fintech space. His bet on QuintoAndar represents a clear faith in what the company is building, as well as his confidence in the start-up’s plans to diversify from its current model towards a one-stop real estate store that also offers mortgage, securities, insurance and escrow services.
The latest round brings QuintoAndar’s total raised since its inception in 2013 to $ 635 million.
Nick Huber, partner of Ribbit Capital, said that Quintoandar has over the years built “a unique and reliable brand in Brazil” for those looking for a place to call home.
“Whether you are looking to buy or lease, QuintoAndar can help customers through the entire transaction process: from viewing verified inventory to signing final contracts,” Huber told TechCrunch. “The ability to meet the needs of customers at every stage of life and to do so from start to finish is a unique ability, both in Brazil and around the world.”
QuintoAndar describes itself as an “end-to-end solution for long-term rental” which, among other things, connects potential tenants to owners and vice versa. Last year it also extended to matchmaking between homebuyers and sellers.
TechCrunch spoke with co-founder and CEO Gabriel Braga and he shared details about the growth that has attracted such a crowd of high profile investors.
Like most other businesses around the world, QuintoAndar prepared for the worst when the COVID-19 pandemic struck last year – especially since a critical part of its business is securing rents to landlords. on its platform.
“At first we were afraid of the implications of the crisis, but we were able to honor our commitments,” said Braga. “In retrospect, the pandemic was a big test for our business model and it validated the strength and defensibility of our business on the credit side and strengthened our value proposition to tenants and landlords. So after the first scary moments, we actually felt even more confident in the business that we are building. “
QuintoAndar describes itself as “a distant market leader” with over 100,000 rentals under management and approximately 10,000 new rentals per month. Its rental platform is present in 40 cities across Brazil, while its home buying market is present in 4. Part of its plans with the new capital is to expand into new markets in Brazil, as well as in Latin America as a whole.
The startup claims that in less than a year, QuintoAndar has managed to consolidate the largest inventory among digital transactional platforms. It now offers more than 60,000 properties for sale in Sao Paulo, Rio de Janeiro, Belho Horizonte and Porto Alegre. To give more context to the company’s growth on this side of its platform: In its first year of operation, QuintoAndar completed over 1,000 transactions. It has now surpassed the 8,000 transactions mark in annualized terms, with growth of 50% to 100% quarter over quarter.
Regarding the rental of its business, Braga said QuintoAndar has over 100,000 rentals under management and is closing approximately 10,000 new rentals per month. The company is not profitable because it is growth-oriented, although unit economies are particularly favorable in certain markets like Sao Paulo, which finances part of its growth in other cities, according to Braga.
Today, the 2,000-person company is looking to begin its global expansion with plans to enter the Mexican market later this year. With this, Braga said that QuintoAndar is looking to hire “top” talent from all over.
“We want to invest a lot in our products and our technological heart,” he said. “So we’re trying to attract more senior executives from overseas, globally.”
A little history
CEO Braga and CTO André Penha came up with the idea for QuintoAndar after obtaining their MBA from Stanford University. As many startups do, the company was founded out of Braga’s personal “nightmare” of an experience – in this case, of trying to rent an apartment in Sao Paulo.
The search process, he recalls, was difficult as there was not enough information available online and tenants were forced to provide a guarantor, or co-signer, from the same city or pay a rental insurance, which Braga called “very expensive”.
“Overall, I felt it was a very inefficient and fragmented process with no transparency and no technology,” Braga told me during the company’s last raise. “There was all this friction and this high cost involved, just real, tangible issues to be solved.”
The concept of QuintoAndar (which can be literally translated as “Fifth Floor” in Portuguese) was born.
“Little by little, we created a platform that consolidated sourcing and inventory evenly,” said Braga.
The company launched the online research phase for the first time, according to Braga. It also eliminated the need for tenants to provide a guarantor, which saved them money. On the other side, QuintoAndar is also working to help protect the landlord with the guarantee that he will get his rent “on time every month,” Braga said.
It has been interesting to watch the business evolve and grow over time, just as it has been fascinating to watch the region’s startup scene mature and shine in recent years.