Mate Pencz (Loft): "Our goal is to reinvent the way people move"

Mate Pencz is the co-founder of real estate startup Loft, Brazil’s first unicorn of 2020. In this interview, he discusses Loft’s revolutionary business model, the key factors behind its incredible 16-month journey from foundation to unicorn status, and the wider potential of the Brazilian and Latin American real estate markets.

Mate Pencz is the co-founder of real estate startup Loft, Brazil’s first unicorn of 2020. In this interview, he discusses Loft’s revolutionary business model, the key factors behind its incredible 16-month journey from foundation to unicorn status, and the wider potential of the Brazilian and Latin American real estate markets.


Leaders League. What is Loft and what does it do?
Mate Pencz. Loft was launched in 2018 to debureaucratize and bring predictability, dynamism, transparency and liquidity to the real estate sector. The company buys, renovates and sells apartments. We offer an exchange model which allows owners to put up their existing property as a down payment. Today, we operate in 37 of São Paulo’s neighborhoods and our model can easily be replicated in cities around the world. By combining real transactional data with a proprietary machine-learning model, our platform can price apartments according to their specifics, increasing both liquidity and transparency for buyers and sellers.  

One of the major headaches for consumers is looking for an ideal apartment that meets their needs. Often, properties will require renovation and modernization but, once ready, no longer correspond to what consumers were originally looking for. This leads to a great deal of frustration and additional expense: often, the resulting delay in selling the existing property will generate new expenses. Loft was born to soothe these pains. Our goal is to reinvent the way people move by building a marketplace of real estate assets focused on consumers.
 
What have been the key factors behind Loft’s success story?
Loft was launched to reinvent the real estate market and from the very beginning we’ve believed in our potential for growth. Our business model itself represents an enormous opportunity in emerging markets and thus, combined with other factors such as a highly qualified and motivated team, ensured our growth was very fast. We began 2019 with 100 employees and have grown to over 500 as of March this year. We are the pioneers in this segment and have established a relatively consolidated lead in this market in the region. We have commercialized over a thousand apartments in São Paulo since launching operations, in August 2018. 

“The residential real estate market in Latin America is a $6 trillion opportunity”

At first we only operated in a few São Paulo neighborhoods, but expansion came swiftly, increasing our capillarity and potential. This January we received investment, which is further boosting our growth. Besides São Paulo, we are now also operating in Rio and will reach Mexico City later this year. Halfway through our trajectory, we acquired Decorati, a startup that specializes in apartment renovation, and Spry, a market research company, and began working with a new modality: the marketplace.

Loft reached unicorn status in early January. What made this possible?
The residential real estate market in Latin America is a $6 trillion opportunity. However, the lack of transparency in data and consolidation in the market contributes to low quality and redundant listings, inflated prices and delays in closing transactions, creating a painful experience for buyers, sellers and agents. This opportunity, as well as market demand, helped Loft’s growth.

We generate liquidity for the market and this stimulates the economy. We began to deliver, in an unprecedented manner, verified data and liquidity in what is a traditionally sluggish and bureaucratic sector. Our rapid growth caught the attention of investors that have been following our progress and, believing in the sector’s potential, we raised, via a Series C round, a $175 million investment. 

Should we expect more growth from this sector in the future?
Investments indicate that the market is confident in the long-term viability and scalability of the sector. As I said, the residential real estate market in Latin America is a $6 trillion opportunity. There is still much room for companies within this segment to grow and bring innovation and transparency to the sector. 

 

Read the full Special Report: Innovation: Technology & Patents (2020 Edition)

It’s safe to say 2020 has not gone as expected. But as the planet gears up for one of the deepest recessions in living memory, we take stock of the world of innovation – and all is not as bleak as it seems.
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