proptech loft conjures safety net for its workers. but who’s paying for it?
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Contxto – The Covid-19 contingency has shown us, the economy can bend in unforeseen ways. Banks granting extended grace periods, factories reshaping their entire operations-like switching from manufacturing premium eau de toilette to antibacterial gel—, and now, companies creating funds for vulnerable workers.
Loft—Sao Paulo’s instant buying proptech startup—recently announced the launch of a R$5 million fund (approximately US$980,000) to protect construction workers’ income. Considering most of these employees are unable to work from home, social distancing could mean being unable to put food on the table.
Of course, Loft is not alone, governments and companies are figuring out ways to keep these families from going under.
Altru-capitalism
Exame reports the initiative is being launched in partnership with Decorati—one of Loft’s most recent acquisitions.
Loft is coordinating the fund along with some of their clients, whose home extreme-makeover will have to be put on hold but will still continue paying for the service. Practically, this is where the money will come from—at least in part.
The 12,000 workers who are currently working directly or indirectly on redecoration projects, or who had scheduled projects in the upcoming weeks will be the main beneficiaries of this initiative.
Clients who agree to keep paying their redecoration projects, despite the situation, will be granted a 1 percent monthly discount.
“At the end of the job, what the client will get from the discount equals a saving of more than 300 percent of the CDI [Brazil’s Bank deposit certificate]”, says Marcus Grigoletto, co-founder of Loft and director of engineering and architecture for Loft and Decorati.
2 for 1
Interestingly enough, Loft and Decorati will contribute one Brazilian real for each real paid upfront by their clients. Meaning, the collected capital will be transferred to a fund and doubled by the company itself. Loft expects this fund to reach R$5 million. Not bad.
Some of Loft’s and Decorati’s makeovers are already seeing restrictions stemming from issues such as scarcity of supplies. “This renegotiation of contracts has the objective of generating income for workers during the period of lockdown and rewarding customers who keep them paid,” says co-founder, Grigoletto.
Workers who receive these upfront payments will need to get the job done eventually, and the payment will be settled through work amortization. But right now, Grigoletto continues: “The goal is to see that these workers are at home with some income to maintain their families.”
I couldn’t agree more.
Related articles: Tech and startups from Brazil!
-VC
