Habi, a real estate startup that is digitizing the buying and selling of homes for the Colombian middle class, said on Wednesday it had raised $ 100 million in equity in a Series B financing, marking the second-biggest round raised by a female CEO in Latin America.
In Colombia, a country where there is no online listing service and where the most common way to sell your house is to hang a phone number and a sign for sale on your window, real estate transactions are incredibly high. opaque. Bogota-based startup iBuyer aims to change that.
Habi buys, renovates and sells houses, generating income on the margin. Its centralized database, built from data from real estate, banking and government partners, drives its automated pricing model, offering transaction services to home buyers and sellers.
The startup also allows homeowners to estimate the value of their home. Some 100,000 Colombians have received awards from Habi between housing offers and the company’s free online assessment, said co-founder and CEO Brynne McNulty Rojas. Between May 2020 and May of this year, the trading volume grew by 40% on average month over month.
Wednesday’s fundraiser, led by the SoftBank Latin America Fund alongside previous investors including Inspired Capital, Tiger Global, Homebrew and 8VC, also represents the second-largest Series B raised by a startup in Colombia, after the delivery application. Rappi’s $ 185 million raise in 2018, according to Pitchbook. Habi refused to disclose his assessment.
According to an analysis by the real estate agency Galería Inmobiliaria, sales of new homes in Colombia’s five largest cities – Bogotá, Medellín, Cali, Barranquilla and Bucaramanga – increased by 31% in the first quarter of 2021 compared to the year previous. Currently, Habi operates in four of these markets: Bogotá, Medellín, Barranquilla and Cali. With the capital raised, Rojas said the company is looking to expand its presence in Mexico, starting with Mexico City. Habi also hopes to continue to strengthen its team, which has grown nine times in the past year to reach 300 employees.
However, Habi isn’t the only startup in Latin America raising big bucks trying to bridge the digital divide: Brazil-based Loft has closed a $ 425 million Series D financing round in March, valuing the iBuyer at $ 2.2 billion. A place where Habi shines: in its proprietary data platform, which contains over 16 million unique data points and synthesizes everything from location to property size to number of parking spaces and if the building has an elevator. That’s a selling point in a country where MLS – which in the United States are private databases created, maintained, and paid for by real estate professionals to help their clients buy and sell property – do not exist, says Clelia Warburg Peters, president of Warburg Realty and venture capital partner of Bain Capital.
“In an environment like Brazil or Colombia where there is no MLS, [companies like Habi and Loft] have the opportunity to enter the market and create a one-stop-shop experience where they could have buyer experience, seller experience and research experience by becoming the de facto MLS, ”she said .
In the United States, the iBuyer market is dominated by San Francisco-based Opendoor, which went public at an enterprise value of $ 4.8 billion in September of last year. Proptech companies like Zillow, Offerpad, and Redfin have also entered the space.
Despite its success, iBuying only includes 0.5% of the $ 1.6 trillion home buying market, according to The Real Deal. And former Zillow chairman Greg Schwartz said startups like Habi face an erratic revenue stream in a relatively flat or declining market, such as during the early days of the pandemic, when many iBuyers suspended. their home purchases. Plus, they typically cost home sellers more in service fees, around 13-15% of a home’s selling price, while traditional agents only cost 5-7%.
“It’s really only accessible to certain people,” says Schwartz. “IBuying is not a solution generally available in urban cores. “