Real estate tech innovation, or proptech, is redefining the real estate industry. It has the potential to disrupt housing markets around the world. In the Colombian market, a proptech startup called Habi buys, renovates, and sells homes in Colombia. The iBuyer is a proptech leader and plans to expand to other Latin American countries soon.
Founded by Brynne McNulty Rojas in 2019, Habi has raised over $115 million to date. In the male-dominated fields of finance, real estate, and technology, Ms. Rojas is a notable success story.
Inspiration for Proptech
Ms. Rojas first became interested in the intersection of real estate and finance during her undergraduate days at Wharton at the University of Pennsylvania, one of the world’s leading business schools. A class on international housing finance systems influenced her perspective.
“It was the first time I realized the power that efficient housing policy and finance have in supporting wealth creation in families and in unlocking liquidity that can advance economic development as a whole,” Ms. Rojas stated.
After she graduated from Wharton, Ms. Rojas worked for four years at Goldman Sachs in real estate investing, fostering her interest in proptech. From there, she attended Harvard Business School.
It was not on her professional career radar to start a real estate tech company in Colombia. After she graduated from Harvard Business School, Ms. Rojas moved to Colombia with her husband and joined McKinsey & Company as a consultant. However, Ms. Rojas observed a major market opportunity. She realized she could bring proptech innovation to the inefficient Colombian real estate market.
“The opportunity was just there.” Ms. Rojas stated. “The way to sell a house in Colombia was by hanging a sign on your window with a phone number.”
Together with Habi’s co-founder Sebastian Noguera, Ms. Rojas made the jump to full-time entrepreneur. A serial entrepreneur, Mr. Noguera’s experience with LatAm startups proved highly informative. Mr. Noguera had founded Merqueo, Colombia’s largest online supermarket. In addition, he had worked as Chief Digital Officer of Banco de Bogota and spearheaded its digital transformation.
Journey as a Female Founder
Habi raised a $100 million Series B round led by Softbank in June 2021. It was the largest fundraising round raised by a female-led Latin American firm. It also was the second-largest amount ever raised by a Colombian startup in a Series B round. Other participants in the Series B round included Tiger Global, Inspired Capital, 8VC, and Homebrew.
Ms. Rojas recalled the early days of startup fundraising in 2019. Right before she flew to San Francisco for an investor meeting, she discovered she was pregnant. Afraid of how the news would be perceived by proptech investors, Ms. Rojas kept her pregnancy a secret for as long as she could.
As a competitive athlete who excelled through top schools and workplaces, Ms. Rojas has always enjoyed a challenge. “I always wanted to be a litigator because I like the idea of justice,” she stated. “It’s a game, so maybe my interest in sports got me interested.”
There are few online home listing platforms in Colombia. Therefore, Habi experienced a leg-up as it established itself as a dominant player. Of the five largest cities in the country, the startup has operations in four of them: Bogota, Medellin, Barranquilla, and Cali.
The primary way Habi makes money is through renovations. Habi renovates homes to meet a minimum “Habi” standard, so buyers know they will get a home of a certain quality. The company partners with 20 home renovation companies to streamline the process of buying and flipping homes.
Habi aggregates data from from public and private partners and tweaks its pricing accordingly. Although it can be more expensive for a buyer to sell their home to Habi than using a broker, Habi guarantees payment within a certain timeframe.
Like other proptech companies, Habi’s business soared during the pandemic. Transaction volume increased by an average of 40% for each month from May 2020 to May 2021. The startup charted a course to expand to other LatAm countries. The next country Habi intends to focus on is Mexico, beginning with Mexico City.
What is Proptech?
Although proptech has been in the media spotlight recently, its beginnings trace to the 1980s tech scene. At that time, real estate institutions wanted to reduce process inefficiencies. Software companies innovated streamlined approaches for typical real estate tasks like underwriting and data analytics. The Internet boom of the early 2000s further fueled technological modernization of real estate. Proptech companies such as Zillow, Redfin, and Trulia emerged and quickly carved out a niche for themselves.
Several startups and tech companies have pursued opportunities in the space. These new entrants have incorporated technology to address challenges in the residential, commercial, and industrial real estate markets. Some of the most promising proptech companies today are based in the United States. Among them are HomeLight, Divvy, Zumper, HouseCanary, and Orchard.
Although the iBuyer model has worked for many startups, there is significant variation in the business models used by proptech companies, and not all are successful. Opendoor and Zillow lost a combined $607 million in 2020 through their iBuyer operations.