Brazil-based startup Loft Holdings continues to rake in venture funding, as the digital revolution in real estate takes hold worldwide.
Earlier this year (Jan. 3), Loft announced it had pulled in $175 million in funding. Today (March 23), The Wall Street Journal reported that Loft, headquartered in Sao Paulo, had raised an additional $425 million — putting the company’s valuation at $2.2 billion.
Loft said that, at this point, it is completing the majority of its mortgage closings and home sales fully digitally. The WSJ said that Loft is in the process of raising an additional $100 million, which would lift its valuation to $2.8 billion.
D1 Capital Partners, a hedge fund, led the $425 million deal, with participation from an array of other investors.
The explosion of interest in Loft comes at a time when venture investors are putting more cash into startups in Latin America. The region’s startups completed 488 venture rounds in 2020, up from 433 in 2019, according to preliminary data from Emerging Markets Private Equity Association, a New York-based trade group.
“VC-backed or tech companies, in general, are leapfrogging and growing faster here than even in the U.S.,” Mate Pencz, Loft’s founder and co-chief executive, told the WSJ.
He added that the big real estate industry players in Latin America tend to be less digitally savvy and charge higher fees — making startup offerings more attractive to consumers. In addition, he said, there are not as many startup competitors as in the United States.
Here in the U.S., the real estate industry is still reeling from the pandemic.
Generally, the real estate market is all about the seasonal cycle, with many home sales happening in late spring and continuing into the summer. Last year, however, the market mostly froze up in the first half the year during the COVID-19 crisis, before roaring back to life in the second half of the year.
HomeLight CEO Drew Uher told PYMNTS there is a big lull in the market. His company is looking for an opening.
HomeLight uses an algorithm to connect home buyers to area real estate agents, matching a client’s needs to the agent’s expertise. When Uher talks about the market loosening up, he said he knows it will be a different, more digitized one than what came before it.