SAO PAULO – Several startups are looking to provide real estate financing – a market of large proportions, and one that grew at the time when the basic interest rate (Selic) was reduced. Loft, a unicorn with a digital apartment buying and selling platform, announced the purchase of CrediHome. The purchase price was not disclosed.
Unicorn has more than 25,000 apartments for sale in Rio de Janeiro and São Paulo, spread over 132 neighborhoods. Recently, Loft arrived in Belo Horizonte. The deal was valued at $2.6 billion in its last investor funding. In all, Loft has raised $800 million with venture capitalists. The property portfolio grew fifteen times between March 2020 and March 2021. The plan is to reach 90,000 properties by the end of this year.
CrediHome, on the other hand, is a startup that connects major banks to real estate advisory services or portals that serve those looking for property financing. Founded in 2017, CrediHome will remain unchanged in its operation, with founders and staff continuing with the company.
Loft says the capital received from the sale will be invested in improving the customer experience and in more partnerships with local real estate advisors. Half of CrediHome’s operations are outside the Rio de Janeiro-São Paulo axis, allowing Loft to regionally expand its real estate financing front.
Also according to Loft, the acquisition transforms the unicorn into a national leader in home loan origination for large banks. Together, Loft and CrediHome generate more than R$600 million monthly for financial institutions. Loft began offering its home finance solution in January 2020.
Race for real estate financing
Loft’s acquisition of CrediHome comes at a time of high demand for real estate – and therefore for real estate financing solutions. 127,522 residential units were sold in the first half of 2021, a number 46.1% higher than that verified in the same period last year. It is an effect, in the view of the board of the Brazilian Chamber of Construction Industry (CBIC), of interest rates that are still attractive on real estate financing for individuals, in the range of 8% per year.
Other startups that deal with properties (proptechs) recently announced vertical expansions of credit to homebuyers. Quinto Andar announced the acquisition of Atta, an independent real estate financing platform, to enhance its vertical of buying and selling properties. Created in 2014, Atta is a franchisor that provides real estate credit and loan with property guarantee (home equity) to more than 1,500 anonymous real estate agents and consultants through 113 franchisees.
EmCasa, another digital platform in the field, recently captured an investment of R$110 million. The contribution is being used to deepen the operation in São Paulo and Rio de Janeiro, and also to expand to other Brazilian cities. In its offer, EmCasa includes the connection with large banks through programming interfaces (APIs) to show the client financing possibilities. Other financial services the startup has its eye on are consortiums and home equity.
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