To restore Latin America’s “broken” real estate market, Mudafy receives 10 million

Entrepreneurs Fund of San Francisco led the 10 million Series A round of investment for Latin American real estate broker Mudafy.

Mudafy, a digital brokerage founded in the middle of 2019, aims to simplify the process of buying and selling a property by providing a “one-stop shop” for all the necessary details.

Over 50,000 postings and more than a million monthly unique users in Argentina and Mexico are boasted by the firm, which is also supported by Y Combinator. Doing over 100 real estate transactions every month, it says that it originated over half of the mortgages for its clients.

At the same time, “it enhances access to better homes for clients,” CEO and co-founder Franco Forte said.

By the end of the year, Mudafy’s goal is to produce 500 million a year in annualised revenue. Forte claims it sold “more than 100 million in properties” in 2021 and maintained a 20 percent month-over-month growth rate throughout the year. As a result, the firm saw revenues climb “10 times” for the second year running in 2021, according to the company’s CEO.

There are now “almost two times” as many people employed by Mudafy than there were in 2021, according to the CEO.

As a result of a success fee or commission, the startup’s income model is based. It charges a commission for each property it sells. Each mortgage loan it produces is also a source of income for the company.

Mudafy’s immediate goal is to grow its presence in Mexico, where it entered in 2020, using its new cash. There are plans to expand into additional Latin American markets including Colombia, Peru, and Chile in the future.

According to Forte, the product-centric strategy of Mudafy distinguishes it from the competition.

In an interview, Mudafy’s CEO said that the company has previously produced solutions for the real estate business for over a decade.

360-degree virtual tours, online scheduling for showings and appraisals, and price data for properties are elements that are widespread in the United States but rare in Latin America. In addition, it has developed an internal product that claims to assist agents become 10 times more productive than typical realtors.

According to Mudafy, the ultimate objective is to make the process of selling a house as quick and inexpensive as possible.

With regards to purchasing and selling a house, Latin American buyers and sellers face much more difficulties than those in the United States. Consumers are deprived of public data and, as a result, transparency if there is no MLS. Technology and data analytics are Mudafy’s weapon of choice here.

Mudafy now employs more than 400 people, up from 204 at the end of 2021, and expects to increase its workforce further with the help of its new funding. Mudafy’s unit economics are “strong and favourable,” according to Forte, despite the fact that the business has yet to make a profit from its technology and goods.

The firm has secured a total of 13 million in funding. IDC Ventures was also a part of the newest round of fundraising for the company.

When it comes to purchasing and selling property in Latin America, Founders Fund principal Amin Mirzadegan says the process is “broken,” with an average sales cycle of over six months.

A spokesperson for Mudafy said in an email that his company’s first emphasis was on giving purchasers with a smooth purchasing experience rather than delving right into i-buying or renting right away. In order for the ecosystem to function properly, agents must be present. MUDAFY is developing technologies to benefit both buyers and brokers, so that both parties may better serve prospective customers.

Opendoor, a publicly listed real estate digital firm with operations in the United States, was founded by Keith Rabois, Founders Fund General Partner and co-founder.

Notably, other Latin American digital brokerages, such as Loft and QuintoAndar, have laid off employees this year as well. Forte responded as follows:

“I believe the Loft and QuintoAndar layoffs are more a reflection of the fundraising environment than the real estate market itself. The market is extremely large, there is space for multiple players, and buyers/sellers want a better experience…If the downturn has an impact on the market, it won’t affect the proptechs. Instead, it will probably affect the traditional real estate brokers.”