Mudafya tech-enabled real estate broker operating in Latin America has raised $10 million in a Series A funding round led by the San Francisco-based Founders Fund.
Founded in mid-2019, Mudafy works with a typical digital brokerage model – with the aim of making it easier for people to buy and sell their homes, while serving as a “one-stop-shop”.
The startup — also backed by Y Combinator — touts that its site has more than 50,000 listings and has more than 1 million monthly unique active users in Argentina and Mexico. It claims it makes over 100 real estate transactions per month and currently initiates over 50% of mortgages for its clients.
“This is the start of a bigger push towards fintech while improving customer access to better properties,” said CEO and co-founder Franco Forte.
Among other things, Mudafy’s ambition is to generate $500 million in annual sales from its new capital by the end of the year. Forte says it ended 2021 with “over $100 million in properties sold” and maintained sustained growth of over 20% month-over-month. All in all, he added, the company increased its sales by “10 times” in 2021 for the second year in a row.
Today, he says Mudafy is operating at a run rate “more than 2x” of what it did in 2021.
The business model of the startup is based on a success fee or commission. When it sells a property, it charges a fee. It also generates income on every mortgage loan it takes out.
With its new capital, Mudafy’s immediate priority is to expand to more cities in Mexico, a market it entered in 2020. exploring the possibility of going to other Latin American markets, such as Colombia, Peru and Chile.
forte believes that Mudafy’s product-centric approach makes it stand out in an increasingly crowded space.
“We rebuilt the entire experience by rebuilding the entire service stack,” he told MovieUpdates, noting that Mudafy’s team had been developing products for the real estate industry for more than a decade.
The customer-facing product includes features common in the US, but far less so in Latin America, such as 360-degree virtual tours, online bookings for viewings and appraisals, and property pricing information. It has also built an in-house product that it says helps agents be 10x more efficient compared to traditional brokers.
Ultimately, Mudafy says, the end goal is to help people close homes faster and for less money.
Certainly, in Latin America the challenges of buying and selling a home are much more time consuming and complex than in the United States. Without MLS, consumers will not have access to public data and thus transparency. This is where Mudafy hopes to make a difference with its technology and data analytics.
Today, Mudafy has more than 400 employees – up from 204 at the end of 2021 – and plans to hire more people with its new capital. The company is not yet profitable as it continues to invest in its technology and products, but Forte says Mudafy has been “super capital efficient” and the unit economy is “sound and positive.”
In total, the startup has raised $13 million. IDC Ventures also participated in the latest funding round.
Founders Fund director Amin Mirzadegan believes that the process for buying and selling houses in LatAm is “broken”, with an average sales cycle of more than six months.
“Since day one, Mudafy has been focused on providing a seamless buying experience to home buyers, rather than immediately diving into i-buying, rental, etc,” he wrote via email. “Agents are a critical part of the ecosystem. Mudafy builds technology that not only helps buyers, but also increases agents’ efficiency and ability to serve potential buyers.”
Interestingly, Keith Rabois is a general partner at Founders Fund and also co-founder of Opened door, a publicly traded real estate technology company operating in the US
It is worth noting that other Latin American digital brokers such as Loft and QuintoAndar have performed laid off this year. To this, Forte said: “I believe the layoffs at Loft and QuintoAndar are more a reflection of the fundraising environment than the real estate market itself. The market is extremely large, there is room for multiple players and buyers/sellers want a better experience… If the downturn affects the market, it will not affect the proptechs. Instead, it will likely hit the traditional brokers.”