Contxto – Not only is the Mexican real estate industry huge but also outdated with many inefficient processes. Counteracting this, a new Mexican startup, Flat, recently raised US$4.5 million in one of Mexico’s largest pre-seed rounds ever.

Fellow Mexican fund ALLVP led the round alongside other investors including Liquid Ventures, Picus Capital, Next Billion Ventures, as well as various angel investors.

Whether buying, remaking or selling homes, Flat’s mission is to grant liquidity to homeowners willing to sell their properties quickly and easily. Under an “iBuying” or instant buying model, Flat actually acquires properties instead of functioning as a mere intermediary platform.

Recently we covered this topic with OpenCasa from Chile and Loft from Brazil. Both startups are also acquiring assets as part of their business strategy.

Not a Flat story though

I recently spoke to Victor Noguera, Flat’s co-founder, to better understand this deal. Let me tell you this, there were some very interesting insights.

Before Flat, Bernardo Cordero, co-founder of Linio, and Victor Noguera, originally from Spain, partnered up to launch Startegy. This Mexico City venture builder helped companies such as Worky, Covela and Belvo thrive in their respective industries.

After participating in the ecosystem for many years, they launched their own startup instead of raising another fund. In this regard, Flat is the outcome of them analyzing diverse industries before committing to proptech.

“Proptech is the new fintech,” said Noguera during our phonecall. “The market is huge. There’s a lot of investor interest, very few innovations, and a lot of need within local markets. Still, you can count the number of proptech startups in Mexico with your fingers. Back when we started, there weren’t many players covering the space.” 

I agree that proptech is similar to fintech, just less saturated.

After analyzing many scenarios, Noguera and Cordero decided to invest in the iBuying model. It was an appealing option since real estate liquidity continues to be an issue in Mexico and Latin America.

“If you’re a young couple that purchased an apartment but now the family grew and you have more stuff, pets, etc., moving out can be a huge pain,” commented Noguera.

“Normally, it takes six to eight months to sell, redecorate, paint, fix, etc., and most of the time you still need to live there since your capital is illiquid in the property, not being able to move out in the meantime.”

Omnichannel valuation

Over time, Flat developed an algorithm that estimates a property value based on several variables. Users can visit the website and discover how much their home is worth. This way, they’re able to obtain an immediate purchase offer from the company.

If interested, Flat physically visits the home, for there are many details that are hard to discern virtually. Once it forms an agreement, the company manages all of the paperwork and capable of liquidating the property in around 72 hours. 

Many homeowners may decide not to pursue it, yet the gathered data is still very valuable.

When asked about potential data use cases, Noguera said, “There are many business lines, not necessarily externally but internally, too. For instance, offering more services to the sellers or even financing options for buyers.”


I have certainly been observing a trend lately. Once upon a time, some of the most popular marketplaces and tech companies were using “asset-light” models. For instance, Uber doesn’t own any cars and Airbnb doesn’t own any properties.

Nowadays, more and more startups are opting for capital intensive, riskier models. Just take a look at Checkars and Kavak buying and selling cars. Flat, Loft and OpenCasa are some buying and selling houses. This is definitely riskier, but if successful, it’s going to mean harder competition.

“Ten years ago, the other asset-light models made sense since there was still a lot of work to do,” said Noguera. “For example, fintech began as lead generators for banks, then turned into single-product offerings. Lately, though, fintechs are expanding their value chain offering more products, thus competing with banks.”

Protech is very similar. It started as listing as a couple of years ago, the next wave evolved into brokers. Nevertheless, the market was extremely fragmented.  

Now, a new wave is coming and aiming to consolidate the market to offer more solid consumer options.

As mentioned, it’s a capital intensive business, hence the reason why Flat is simultaneously raising a large credit line from several international venture debt funds. This large pre-seed round is necessary to split some home purchases leveraging capital and debt. Some of the equity will go towards operation, too.

“You need track record and capital to pursue credit,” said Noguera. “This will be announced in the upcoming weeks.”

Federico Antoni from ALLVP explained his reasoning for investing in such a risky model in a couple of tweets.

Winning recipe for raising VC in Latam

Flat’s fundraising process was, in fact, very handcrafted.

“The winning combo to raising capital in Latin America is to include both local and foreign funds,” said Noguera. “Local funds enable local knowledge and expertise, network or contacts, market dynamics understanding.”

ALLVP was great for us, especially since Fernando, one of the fund’s GP has previous experience in Private Equity Real Estate. He has a huge network of contacts in the industry.

Noguera also believes that international funds provide certainty, scalability and the probability of raising larger rounds eventually.

“NextBillion Ventures previously invested in Brazil’s EmCasa, and had a lot of experience in proptech. Also, the partners are both former IFC’s, well connected in Silicon Valley.”

Joe Montana, the famous U.S. quarterback, is a GP at Liquid Ventures who already invested in well-known Latin American startups including Rappi and Grin. Picus Capital is a German fund that has also previously invested in iBuying models, so this deal seems to align with past ones.

Intrigued by this matter, I also asked Noguera why he did raise such a large round right from the start. After all, he could have chosen to go through previous acceleration programs such as Y Combinator.

Well, Noguera believes that although YC is the best accelerator in the world, the amount of capital Flat needed to launch corresponded to a larger amount. At least, more than what most accelerators can initially provide. 

Latin America may share similar issues in the real estate industry. However, the founder says that his main priority is to offer a wider range of proptech products in Mexico before launching elsewhere.