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Here at 附近上门 News, we鈥檝e reported on a number of Brazilian real estate companies, such as unicorn (which last September raised a $250 million Series D round led by ), and (a co-living startup that raised a $4.7 million pre-seed round) for example. But Brazil is not the only Latin American country with venture-backed companies attacking the space.

I interviewed , founder & CEO, of Mexico City-based about the company鈥檚 recent (and previously unannounced) $8.8 million Series A raise.

叠谤补锄颈濒鈥檚 and San Francisco-based co-led the round, which also included participation from 听out of New York and Mexico-based . (Villarreal himself was previously an associate at Mountain Nazca.)

The round is notable for a few reasons. For one, it marks Class 5 Global鈥檚 first investment in Mexico, a region that has seen a significant uptick in venture investing as of late. Latin America, in general, has also seen increased global investor interest, as we reported in this piece last April.

Via email, Class 5 co-founder and managing partner told me his firm was 鈥渁mazed by the quality of the entrepreneurs emerging in the ecosystem,鈥� and that it hoped 鈥渢o partner with many more.鈥�

In particular, he believes that TrueHome, which started out as iBuyer but has evolved into being a tech-enabled broker focused on the Mexico City market, is meeting a critical need.

鈥淢exico has one of the highest home ownership rates in the world. With very little organized data, however, the process of buying or selling a home in Mexico is full of friction,鈥� he wrote. 鈥淏uyers are forced to deal with fake and duplicated listings and unreliable brokers. TrueHome is solving these problems by using technology to make buying and selling homes a seamless and transparent process.鈥�

Class 5 Global is focused on investing in emerging markets, particularly Latin American, the Middle East, and Southeast Asia. Zach Finkelstein and Joel Ayala co-founded the firm, having previously led deals in such emerging market companies as Careem, CargoX, and Fresha.

How it works

TrueHome started operating in April 2017 as an iBuyer (which on homes on behalf of potential buyers) but pivoted in January 2018 to brokerage services.

鈥淲e made a couple of transactions as an iBuyer, but then as we were making offers for properties, and buying and selling them, we saw a huge opportunity to bring technology into the brokerage part of the industry to make the process more transparent and simple, and help our customers save money on the transactions,鈥� Villarreal told me in a phone interview.

By the summer of 2018, TrueHome had launched its beta to the market, and closed on a seed round of $1.3 million led by Mountain Nazca. It鈥檚 since been building out its technology and capabilities, and grown its headcount to a little over 150 employees compared to about 25 a year ago.

TrueHome has over 1,300 listings, which makes it one of the top 5 brokers in Mexico City, according to Villarreal. It鈥檚 focused strictly on the residential market and for-sale properties.

It鈥檚 also (for now) focused just on the Mexico City market, which it says is huge enough to provide plenty of business.

鈥淭here鈥檚 no MLS in this market,鈥� Villarreal told me. 鈥淲ith the lack of transparency, brokers don鈥檛 have an incentive to provide all the information on properties. That ends up hurting the consumer at the end of the day.鈥�

TrueHome takes a percentage of each transaction made on its platform. It charges 3 percent to execute transactions generally. But if another broker sells one of its properties, it splits a 4 percent transaction fee with that broker. Its own brokers are salaried, similar to 鈥檚 model.

With its new capital, the company is focused on working to be 鈥渢he No. 1 broker in Mexico City鈥� and achieving 20 percent market share in the areas in which it operates.

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The financing brings Houwzer鈥檚 total raised to $17 million since its inception in 2015, according to 附近上门 . Earlier investors include names such as NBA Hall-of-Famer and , co-founder of HomeBuilder.com.

Since its founding, Houwzer says it has saved home sellers in the Mid-Atlantic region over $13.8 million and helped clients buy or sell thousands of homes worth more than a combined $750 million.

Investing in people

There are so many real estate startups these days that the first thing that comes to my mind when I hear about another raising money is: How is this different?

So I hopped on the phone with the company鈥檚 CEO and co-founder to find out.

He explained that like, Houwzer hires its agents as salaried employees rather than contractors who work on commission. Its premise is that it saves its agents time by taking care of business generation, marketing and other administrative work. So, in theory, they鈥檙e able to focus more on helping customers. Houwzer charges a flat $5,000 listing fee–paid at closing–plus 2.5 percent for the buyer鈥檚 broker.

The company also invests pretty heavily in specialized training and education for those agents, he said.

But what really caught my attention is that Houwzer claims to be 鈥渢he first residential real estate brokerage in the country certified as a B Corporation.鈥� This means that the startup is measured by both financial growth and the number of people whose lives benefit from its offerings.

As part of the effort to continue providing benefits to others, Houwzer instituted volunteering hour requirements for all employees, describes itself as philanthropic and has adopted 鈥渁 stakeholder-driven approach to how we think of all business decisions and ownership,鈥� according to Maher.

鈥淲e believe you can have a strong impact model and a strong business model,鈥� he said.

Plus, he told me the company has 鈥減retty consistently鈥� grown by 100 percent year over year and is profitable in the Philly region.

鈥淲e鈥檙e shooting for profitability in the D.C. region as well this coming year,鈥� Maher told me.

Looking ahead

Houwzer says it plans to use its new funds in part to grow its existing presence across the greater Philadelphia and Washington, D.C., regions. It also plans to expand into the Greater Baltimore area.

Part of the company鈥檚 goal with the new capital is to expand beyond being a brokerage to include services such as mortgage, title and insurance–a true 鈥渙ne-stop shop鈥� for its users. The company also plans to 鈥渄ouble down鈥� on its existing technology.

With plans to double its workforce over the next 12 to 18 months, Houwzer intends to enter the greater Orlando market later this year. The company currently has 77 employees, about 50 of whom are real estate agents, according to Maher.

, general partner at Edison Partners, will join Houwzer鈥檚 board as part of the financing agreement.

鈥淗ouwzer鈥檚 tech platform serves as a blueprint to a transaction and reduces a lot of anxiety for customers since they can understand what鈥檚 coming next,鈥� he said. 鈥淚ts technology component is fundamental to its ability to streamline.鈥�

It seems there鈥檚 no shortage of real estate tech or real-estate related startups raising money. Last November, we wrote about , an Austin-based licensed residential real estate brokerage using AI and big data, raising another $40 million in what it described as a 鈥淐1鈥� round.

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Tomorrow, Redfin will start publicly trading on the Nasdaq, according to the听

The Seattle-based firm is currently tipped to price between $12 and $14 per share. Redfin鈥檚 debut will mark the first notable, US-listed technology IPO since听Tintri听and听Blue Apron听both debuted at down-valuations. Blue Apron has since fallen by more than 20 percent since. Tintri is roughly flat.

Redfin, therefore, is going public into choppier waters than some of the preceding 2017 cohort. What impact prior IPO disappointments will have on its performance remains to be seen.

A Redfin Refresh

While private, Redfin听. The firm brought in more than a quarter billion in revenue last year, posting a negative operating margin (on a GAAP basis, meaning inclusive of all costs) of less than 10 percent.

(For a deeper dive into the company鈥檚 numbers,听head here; we鈥檒l spare you the full number-run this morning.)

Redfin鈥檚 IPO is notable for its seasonally-variable听revenue and potential valuation. According听, the firm will target a billion-dollar-plus valuation in its IPO, making it a (potentially) impending public unicorn.

But what matters most for these pages is the chance for a win. That is, if Redfin does well in its debut, other firms could be coaxed off the bench. At that point, we鈥檇 have so many more IPOs to write about.

And that would not be burdensome.

From the听:

WeWork secures $500M for China growth

• , the co-working giant,听听that it has raised $500 million from SoftBank and Hony Capital to fuel its growth in China. To carry out that plan, the company created a new business entity called WeWork China.

Slack raising $250M at $5B valuation

• Slack, the popular messaging platform for group work, is raising $250 million at a $5 billion valuation, according to media reports. Backers for the round include Accel, SoftBank, and other existing investors.

HR analytics gains traction

• Venture investors are increasingly putting their money to work in workplace analytics. A听附近上门 News analysis听finds that startups in the space have been scaling up and rolling out new offerings aimed at helping HR departments quantify decisions around recruiting, hiring, and maintaining policy in the workplace. ((For more stories, follow听听on Twitter and check us out on听.)

Who? Redfin? For how much? It has $100 million written down, but that’s likely a placeholder. Let’s quickly remind ourselves what the hell a Redfin is, and then break down its numbers.

Redwhat?

We’ll explain this twice, I think, to get a good handle for it. First up, let’s see what 附近上门 has on deck for Redfin, according to :

“Redfin provides real estate search and brokerage services through a combination of real estate web platforms and access to live agents.”

In case that makes no sense, we can also turn to the for a longer dissertation:

Redfin is a technology-powered residential real estate brokerage. We represent people buying and selling homes in over 80 markets throughout the United States. Our mission is to redefine real estate in the consumer鈥檚 favor.

That helps a bit more. And as you can already see, this IPO could be a treat. It isn’t one large cloud听company selling cloud products to other cloud companies, all of which run on the public cloud of another company that does cloud but also sells soap. (.)

To the numbers!

Redfin’s Red Ink

Sadly, like the enterprise IPO fare we so often chew over together, Redfin is unprofitable.

The company’s S-1 contains the usual wealth of information, most critical of which are its operational results. For the number kids, here’s the raw stuff that we’ll gist down in a moment:

If you want a quick tutorial, the years (2014 and on) should be read left to right. So, if positive numbers, like revenue, go up as you scoot right, that’s good. For numbers that shouldn’t be negative, but are, like losses, go up as you scan right, that’s bad.

But there’s some real nuance to Redfin’s numbers that we need to unpack. The company has grown its revenues consistently, including 42.6 percent in 2016, from $187.3 million in the year-prior to $267.2 million.

And the company’s GAAP net loss fell, from $30.2 million in 2015 to $22.8 million in 2016. That’s the right direction, and as the company’s losses are falling as its revenue grows, indicate improving margins.

If you caught our issue already, good work. What we have to understand is how a company that lost only $22.8 million last year lost $24.4 million in the first quarter of 2016. Why do we care about that? Because the company’s first quarter of 2017 looks bad in听loss听terms, we need to grok its year-ago cognate.

Yucky First Quarters

The answer to how Redfin lost so much in the first quarter of 2016, but only a bit more in the full year, is explained in its filing. In short, the company is seasonal in a way we don’t see too often; Redfin sees higher revenues during the middle two quarters, and, thus, smaller losses and even some GAAP profits.

That’s why the first quarter of 2016 was rough, and why the first quarter of 2017 looks as bad as it does compared to the firm’s full-year 2016 GAAP loss. Observe the gyrating profit results below:

Got that? That’s not only very interesting but changes what our initial perspective of Redfin might have been. This company is healthier and more mature than its first quarter 2017 gross profit would otherwise indicate.

(We won’t discuss the macro-health of the housing market. Mostly because we don’t know anything about it. Also, housing is听boring.)

Let’s check the rest of the vitals and get out of the office.

Cashflow, Etc.

In all of 2016, Redfin used just $9.3 million in cash to fund its operations. Compared to its $200 million-plus revenue generated in the year, and its 40 plus percent growth rate, that’s likely just fine by investors.

Notably, the firm did burn more cash in the first quarter of 2017 than 2016 ($22.0 million, compared to $19.3 million in the year-ago quarter). That could imply that Redfin is paying more for growth as it scales. But that modest margin pressure won’t matter too much if it can pop a few GAAP profitable quarters this summer as it did in 2016.

The company has just under $38 million in cash, which, stacked against its operational cash burn, is quite low. We’ll have a better way to handicap that number when we figure out how much the firm actually wants to raise. For reference, Redfin has听听a total just under $168 million as a private company. It last raised $71 million in late 2014.

The company is not listed on the , so we could be on the hook for a very interesting pricing period.

More when it sets a range.