Canary leads investment for US$1 million in proptech Hent

Contxto – Proptech Hent closed an investment for R$5 million (around US$1 million) and made the announcement this week. Brazil’s low-tech and disjointed real estate market are what convinced lead investor Canary Ventures to move forward with the deal. That, and Hent’s co-Founders’ experience in startup-building.

Hent plans to hire staff with these funds. Although, considering the economic uncertainty Brazil is facing, it will proceed with caution in the coming months as it validates its business model. Meaning, no crazy growth plans.

Nevertheless, this proptech’s plans to offer real estate financing soon, shows there may be a big market opportunity in Brazil and other startups are also taking notice.

Related article: 12 Chilean tech startups taking over the Real Estate industry

Hent’s shifting business model

This proptech is an interesting case wherein it started off with one market and business model in mind. However, it shifted gears as it identified larger opportunities.

Here’s the play-by-play of Hent’s evolution:

Entrepreneurs David Aragão, Thiago Diniz, and Leo Pinho co-founded their startup in 2019 to digitize real estate agents’ operations.
Upon realizing their original plan wasn’t scalable, they re-adapted their platform to help landlords manage their properties. Y Combinator then accepted the startup into its Winter 2020 Batch.
During its participation in the accelerator, Hent’s co-Founders discovered there was a market opportunity in land management as opposed to rental properties. This is there current product.
The proptech also hopes to grant credit lines as an additional product. The plan would be to offer these loans to both real estate developers as well as buyers. The property itself would serve as collateral.

So… if at first you don’t succeed, pivot, pivot, and pivot again.

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Credit is cool in Brazil

Hent isn’t the first Brazilian proptech to see a market opportunity in credit lines. Loft too has been exploring loans for buying properties. In both cases, partnering with the right financial institutions is critical for this product to play out.

In any case, Brazil is proving to be fertile ground for real estate financing—despite a global pandemic.

Industry numbers: Real estate financing in Brazil totaled to R$6.7 billion (around US$1.4 billion) in April 2020, which is a 22.6 percent increase in comparison to April 2019, according to the Brazilian Association of Real Estate Credit and Savings Entities (ABECIP).

What the industry experts are saying: “The volume financed (…) was close to that of the previous two months, thus indicating, until then, the absence or small impact of the new coronavirus crisis on real estate credit,” said the ABECIP.