附近上门

The real estate space has seen a ton of disruption here in the United States. But lately, I鈥檝e been hearing about more startups in Latin America raising money to address challenges and inefficiencies.

Subscribe to the 附近上门 Daily

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 聽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.

Illustration: