Venture Capital: Brazilian Real Estate Marketplace Loft Scores $425M

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The Series D Round valued Loft at $2.2 billion.

A booming housing market plus the digitization spurred by the pandemic have added up to land Sao-Paulo-based real estate marketplace Loft in a happy place. The three-year-old startup grew its business 28X in 2020 compared to the previous year, yet still has money left over from its last Series C raise of $175 million in January 2020. Nevertheless, Loft announced today its raise of $425 million at a whopping $2.2 billion valuation. (Forbes)

With this round Loft becomes the largest and fastest-growing property marketplace for residential apartments in the world, excluding the United States and China. Nevertheless, it is among the 10 largest in the world.

Monster round

This round, one of the largest ever by a Brazilian startup, was led by D1 Capital Partners. Other investors, both existing and new, included Advent, Altimeter, DST, Silver Lake, Soros, Tarsadia, Tiger Global, Andreessen Horowitz, Caffeinated, Fifth Wall, Monashees, QED and Vulcan, and others.

Loft is laser-focused on the end-to-end digitization of the property transaction process in line with e-commerce.

Co-founder and co-CEO of the company, Mate Pencz, told Forbes: “The acceleration seen in the general e-commerce space over the last few months was the realization of our thesis – to bring a new solution for the real estate market that would end the pain [of the home buying and selling process].”

The tortuous process of buying a property in Brazil involves over 190 steps before it concludes with the registration of the deed.

Use of funds

Loft will use the money to expand its reach across Brazil, and in particular, to bump up the density of the offer of apartments in each neighborhood that it operates.

“Anyone looking for an apartment in a certain neighborhood in a city generally considers about 20 properties with the same characteristics within the same area where he intends to live,” Loft said in a blog. “For this reason, our expansion will continue to focus on increasing the offer of apartments by neighborhood, to deliver what the customer needs.”

Florian Hagenbuch, also founder and co-CEO of Loft, said the startup may consider expanding its operations to more Brazilian capital cities later this year.

“Our main focus is to quintuple the portfolio of apartments in São Paulo and Rio, as well as the number of customers, which today is around 6 thousand in annualized data for February 2021, considering all real estate products,” he commented. “At the same time, we will consider opening new cities, with the same objective of offering consumers a good number of options for good apartments per neighborhood and the best market experience in buying and selling real estate.”

Loft will expand internationally, make strategic acquisitions, and take steps towards an IPO.

Related Story:  Brazilian Lender Creditas Raises $255M To Fuel Expansion                                                 

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