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Arrenda emerges with Adelanta, a financing offering for landlords in Latin America – TechCrunch

arrendaa Mexico City-based fintech company providing digital financial services to the Latin American real estate market, raising $26.5 million in a pre-seed round of equity and debt financing.

The funding round was a mix of $1.5 million in equity and $25 million in debt. Fasanara Capital led the investment and was supported by Kube Ventures, ODX, Toehold Ventures, Wharton Fintech, Lightspeed Venture Partners Scout Fund, PRMM Inmobiliaria and a group of angel investors.

Joe Merullo, Founder and CEO, grew up in Boston and started his first real estate business at the age of 19. He was recruited to June Homes, a proptech startup that integrates technology into the residential real estate industry, particularly rentals. There he had the opportunity to work in Mexico and the difficulty of finding an apartment gave him the idea for Arrenda.

The company, formerly known as ViveFácil, began offering insurance in 2021, similar to a web or rhino, but for Mexico, Merullo told TechCrunch. This concept failed, but led to recognition by Merullo and his team. The company moved to Arrenda in 2022.

Its first service is Adelanta, a revenue-based financing offering that uses Arrenda’s proprietary technology to enable landlords in Mexico to pre-finance up to a year’s future rent receivables in 24 hours or less.

Arrenda landlord lending Latin America

Arrendas smartphone app for landlord lending tool. Photo credit: arrenda

Merullo believes this is a unique company in Mexico, which has 5.5 million rental households and where traditional financial institutions are still the dominant source of credit. However, what makes Arrenda different, he believes, is its proprietary underwriting process that quickly provides financing terms.

“We developed the risk model, which allows us to collect data across various touchpoints such as bank accounts, credit bureaus, tax authorities and crime bureaus to understand the risks involved with funding and then make a decision to grant them credit based on that” said Merullo. “In turn, we combined that with underwriting the receivables that we find on the leases to make determinations in that 24-hour window.”

The company is ahead of sales and is now launching its website with 900 people on its waiting list. It signs financial contracts ranging from $250 to $10,000 per month with an average funding amount of around $12,000 over a 10-month period.

Merullo plans to use the debt portion of the new financing for originated loans and financing. The equity will be used to expand Arrenda’s 18-strong workforce. The company has grown by two employees a month since February and is hiring more. He also plans to expand into other of Mexico’s largest metropolitan areas and establish distribution channels with industry groups.

Next, the company aims to reach $1 million in annual recurring revenue by the fourth quarter of this year. It is also planned to extend the financing offer to the commercial real estate area for renters of warehouses, offices and shopping centers.

“We have amazing feedback from these people who are working to develop the underwriting model to support these people now,” Merullo said. “In addition, we will be pursuing products for tenants. In 2023 we plan to launch a range of products to make renting easier for renters as we originally did on the insurance side, for example with credit products that now pay rent.”

Arrenda emerges with Adelanta, a financing offering for landlords in Latin America – TechCrunch Source link Arrenda emerges with Adelanta, a financing offering for landlords in Latin America – TechCrunch

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