A proptech CredPago it has ambitious plans and many projects in the pipeline to take off, after combining with the Loft, the Brazilian real estate unicorn in a billion dollar transaction with an undisclosed amount. Some fronts will triple in size in two years and others will more than double.
After solving the issue of the guarantor, substituting a kind of instant guarantee insurance, the plan of the founding partner and president of the company, Sandro Westphal, is to boost the fronts of home equity, credit with property under guarantee, and residential financing. Both are already offered by Loft, but now the strategy will rely on CredPago’s risk analysis experience. The balance of signed contracts, which today is R$ 2 billion, should reach R$ 6 billion by the end of next year.
Founded in 2016, CredPago changed the real estate rental market, replacing the guarantor figure and streamlining the rental subscription. For 2022, it is also preparing new solutions, such as one that intends to speed up and facilitate the use of the FGTS balance in real estate transactions — a lengthy, bureaucratic and tiring process that currently takes 40 to 70 days, in the best of scenarios. “We want to bring this deadline to ten days, and that’s just at the beginning.”
With the transaction, Westphal and the two founders became minority shareholders of Loft, as well as the BTG Actual (from the same control group as Prime Time Zone), which held 49% of the business.
In addition, Westphal also plans to expand the range of insurance products offered. Next on the list is fire fighting. “We want to be the total solution for the consumer when it comes to housing”, he says.
Currently, Credpago has 130 thousand contracts under management, for a total equivalent to R$ 40 billion. Before the merger, it had around 17,000 real estate agencies, out of an estimated 50,000 in the country, indexed in partnerships with the company — 6,000 already operate with the products.
Loft brings to the relationship hall and as a point of contact to be explored its 30 thousand real estate partners and a total of more than 20 thousand properties for sale in São Paulo and Rio de Janeiro. It is this base, and new access to capital, that makes Westphal multiply its projections. Loft raised US$425 million in a round held in March, more than R$2 billion and much more than several initial public offerings (IPOs) on B3.
The goal, according to the executive, is to have solutions for both classes A and B, as well as for classes C and D. Westphal believes that the total number of contracts closed per month, which today is around 10 thousand, will increase to 13 thousand up to the end of this year. And that the number of leases under management reach 280 thousand by the end of 2022.
“All these changes are just beginning. It was the industry that took the longest to catch up with the digital scene, in terms of technological innovation”, highlights Westphal. So there is still a lot to happen. In the executive’s view, both real estate financing will undergo a brutal change, with longer terms and more affordable costs, as well as leasing, which should register strong expansion.
Westphal believes that the Brazilian rental market is still small and should seek the same international parameters. “This market today moves R$ 160 billion per year. In 2004, leases represented 10% of homes in the country. This rate is 18% today, but it’s still low compared to 35% in the United States and Europe, for example.”
In addition, there is a behavioral change in the opinion of the executive, in the new generation, combined with a trend towards the high history of real estate. All of this should turn renting into something more adopted by people, who will no longer want to “lock themselves” to a property. “This new generation doesn’t even want to have a car. They ride from Uber. What will you say, immobile.”
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