Renting is restricted in Latin America. Most landlords require three months' worth of rent as a deposit and require a guarantor who owns property in the same city to co-sign the rental agreement. Santiago Morales, co-founder and CEO of Proptech Moradauno, said the situation disqualifies 40% of rental applicants. His company hopes to bring more tenants into rentals by taking on the risk.
“That's the biggest problem in the industry today,” Morales told TechCrunch. “People can't rent where they want, they have to rent with roommates or roommates, or they just can't rent. So we say, let's fix that. I said, let's solve that problem.
The result is MoradaUno, a Mexico City-based company that proactively considers tenant risk for landlords. The company works with real estate brokers to screen and take on potential tenants and agrees to take over rent payments if the tenant stops paying. Morales said the company's thorough vetting process, which includes background checks and income verification, weeds out many bad actors in the first place. MoradaUno also offers additional optional brokerage services such as legal insurance and home insurance.
Morales said the company decided to target agents rather than landlords themselves because Mexico's rental market is fragmented. Unlike U.S. cities, where there are large concentrations of landlords controlling large numbers of units, the opposite is true in Mexico. Most landlords only own one property.
“Everything is mom and pop, just like 97 percent of the market is mom and pop,” Morales said. “They're really dependent on this income. So they're like, 'Oh, who am I lending to?' What happens if I don't pay? ” There is a lack of trust there. We claim that we can solve that or fill the trust gap with technology. ”
MoradaUno's founding team knows the Latin American real estate market well. Morales said he moved to Mexico in early 2020, just before the pandemic, because he was working with Proptech Lofts, a Latin American real estate sales marketplace. He was supposed to help them expand into the country, but the coronavirus outbreak put a halt to those plans.
This experience gave him a firm footing in the real estate challenges of Latin America and introduced him to his current co-founders, Inés Gamboa Sorensen and Diego Llano. MoradaUno was founded in 2020 and officially launched its products in 2021. Since then, MoradaUno has worked with over 4,500 brokers and helped close over 20,000 rental properties. Santiago added that the company processes about 1,000 leases a month and hopes to reach 3,000 leases a month by next summer.
The company just raised a $5.6 million Series A round to support this. The round was co-led by fintech-focused Flourish Ventures and Cometa, a VC firm focused on backing companies building for Spanish-speaking countries. Clocktower Ventures, Picus Capital and Y Combinator also participated. Morales said the funds will be used to support business expansion.
The proptech startup market is growing in Latin America. There are several other startups trying to get into rentals. Aptuno, a Bogotá-based service that helps people find and apply for apartments online, has raised $7 million in venture funding. Humu is another company trying to circumvent the region's tough rental market by acting as a digital broker. Houm has raised over $44 million in VC funding.
MoradaUno currently lives in four cities in Mexico, and the company hopes to increase that number by adding six more cities in the near future. Morales added that tenant underwriting is just the beginning, and that in the future he hopes to be able to offer fintech services such as rent advances and build AI models for brokers.
“It’s really great to be able to grant access.” [to] These are people who otherwise wouldn’t be able to rent,” Morales said. “Now you're giving them a choice, and that's very powerful and exciting. That's what gives us energy every day. It also gives real estate agents a better tool. and efficient technology that is also improving the lives of thousands of real estate agents.”