(Press Release) Apartment rental marketplace, QuintoAndar, has received a R$42m (US $12.6m) investment. NYC-based Acacia Partners led the round, with participation from Qualcomm Ventures and existing investor, Kaszek Ventures.
Based in São Paulo, QuintoAndar, an apartment rental marketplace that enables a self-service, end-to-end online experience in apartment rentals, just raised a Series B round of US$12.6m. With the new investment, QuintoAndar funding now totals US$20m. The new round will be used in increasing the technology team and expanding to 5 major Brazilian cities. QuintoAndar currently operates in the greater São Paulo area.
The investment was led by the NYC-based private equity investors of Acacia Partners, and followed by Qualcomm Ventures. Existing backers, including Kaszek Ventures, also participated in the round.
Different from what the online classifieds do, QuintoAndar does not stop at ‘finding an apartment with a search tool’. At the search, the renter may instantly book a visit to her favorite apartments. The visit is accompanied by a certified agent, who is coordinated by a specific mobile app – similar to an Uber driver. QuintoAndar adjusts agents’ routes and optimizes their schedule, besides controlling for service quality with user-sourced reviews of the agents. From there on, everything is fully online again: direct negotiation between renter and landlord, online contract signing, embedded rental guarantee and property management.
“Renting an apartment is a very painful process in Brazil. Customers face many inefficient steps, arduous paperwork, and expensive and inconvenient guarantees. We founded QuintoAndar to make rentals simpler, quicker, and cheaper for both the tenant and the landlord,” emphasizes Braga.
10x faster than market average
Apartment units in big cities have tenants moving in and out very often. This market dynamic poses challenges to landlords, whose profits depend on maintaining high occupancy rates.
QuintoAndar attacks this situation in an unprecedented way worldwide, by bringing the whole process online and eliminating the need of cosigners for the lease-out. The company replaces the guarantor by providing a ‘free rental guarantee insurance’ for its customers. They also replaced all the offline interactions for contract signing. “The whole online process of renting an apartment once you find it takes on average 3 days at QuintoAndar; at the market, this process takes about 30 days”, says the CEO.
With nearly zero investment in marketing, the company has been growing on average 25% month over month since November 2015. In the last month (November’16) alone, QuintoAndar has led more than 10,000 visits to apartments in São Paulo.
According to the company, investment in product is the main responsible for this growth. “When we launch new features that enhance our process, word of mouth helps us keep the pace,” they add.
Time to expand nationwide
While the main investment will always be in product and technology enhancements, QuintoAndar is planning to launch in 5 new big cities. Right now, the startup operates in São Paulo metropolitan area.
In the whole country, residential rentals generate a R$200b (about US$60b) in GMV every year, and there’s still a lot to grow. Nowadays, the percentage of rented residences in Brazil is 18%. In bigger cities, where people come from across the country, the number is higher – slightly above 20%, but still low if compared to more developed countries – in the United States, the average is about 35% and big cities average more than 50%. The residential rental market in Brazil has been growing twice as fast as home sales since 2000.