Contxto – Brazilian proptech Loft recently raised R$216 million (around US$52.7 million) for its real estate fund Loft I FII. The round and fund are under the management of Credit Suisse Hedging-Griffo.
Loft will use these funds to purchase and then resell over 1,200 apartments in São Paulo within the next two years. Albeit this will depend on the housing market’s behavior.
Loft lifts- A history of growth
This startup from São Paulo offers a platform to facilitate the real estate life cycle for everyone involved. Homeowners can quickly and transparently sell their property on it. Meanwhile, buyers benefit from ready-to-live-in spaces.
Founded in August of last year, Loft began operations in São Paulo. Users can find properties managed by the startup throughout 16 of this city’s neighborhoods. However, expansion plans are in the works for this proptech. It expects to launch soon in Rio de Janeiro as well as three other Brazilian cities in 2020.
Moreover, there’s talk of someday arriving to Mexico City. For that purpose, it’s been reported that Loft has hired Juan Pablo Ramos from Uber Eats in Latin America. Although this may take some time as it’s still “an embryonic operation,” according to the startup’s CEO, Florian Hagenbuch.
In terms of funding strategies, this is the second time Loft uses capital markets to feed its Loft I FII fund. Having raised R$110 million (US$26.8 million) in February. Plus, the startup also contributed R$82 million to it. This totals to R$408 million (US$99.7 million) in this piggy bank of funds.
However, keep in mind this isn’t the same financing approach as closing a direct investment, as Loft experienced earlier this year in March.
While it’s always eye-catching to find startups that close such large investments, it is also important to keep in mind that instant buying proptechs like Loft belong to a more capital-intense group of businesses.
Other industries that eat up capital in a blink are biotechs and certain fintechs, like crowdsourcing platforms or lenders.
Which is why often investors are more fond of tech-centered startups that develop Software as a service (SaaS) solutions or marketplaces. This is explained in part by the fact that often their most costly asset is the fantastic team that develops their products.