Up Property raises with BR Angels to digitize conventional actual property

Proptech will raise a total of BRL 3 million to invest in geographic expansion and technology

Neither digital real estate nor subscription rental. In an industry with players like Quinto Andar and Housi, Up Estate promises to tackle a different pain and managed to attract early investors and traditional real estate companies.

The startup raised BRL 1.5 million with BR Angels to bring innovation to real estate and reduce the bureaucracy of rent for tenants, a benefit that Quinto Andar also offers. In all, the investment in proptech should reach R$ 3 million, including the participation of two other institutional investors and angels.

Up Estate has developed a free leasing system that promises to benefit the entire network: real estate agents, owners and tenants. The realtor does not pay for the service and the cost is borne by the lessee, who pays a flat rate of 7% of the rent every month. In return, the lessee closes the contract without a guarantor, surety bond, security deposit or capitalization bond.

• “We take this culture of simplified closing to real estate,” says Matheus Penna Santos, CEO and co-founder of Up Estate. In practice, the startup is a white label for these real estate companies, doing all the collection management and guaranteeing the payment of the rent even if the tenant defaults. The startup also offers a finance team to take care of tenant service.

Effectively, proptech was created last year, in Belo Horizonte, by Santos and partner Roney Guimarães. The duo met in the real estate market, where they have been working for over 10 years. Together, the two even created another company before, in 2018, which operated with a franchise model and had the same name, Up Estate.

The spinoff of the model that now raised capital with BR Angels only came a few years later, when the two realized that the first experience was not gaining traction. In the old model, the duo had nine franchises. In comparative terms, the white label operation that made Up Estate viable already has 110 real estate agencies and expects to reach R$ 1 billion in properties under management this year.

When talking about startups and rentals, it’s inevitable to think about the unicorn QuintoAndar, but Up Estate’s business model is completely different. Santos sees his startup as a kind of sponsor and inductor of innovation in traditional real estate. “Our product is not only part of the ease of leasing, but also the professionalization of real estate management.”

By differentiating itself from the existing models and by the previous experience of the entrepreneurs, BR Angels saw great potential for expansion of the startup, which marked the first investment of the group of angels in the furniture market.

“You can see and feel the ambition they have and the market potential. We understand that currently the model is not disruptive in the sense of completely changing the market, but it brings innovation and, in our view, this brings a gain”, says Orlando Cintra, the chief executive of BR Angels.

The company’s idea is to reach 500 real estate agencies in the next two years and then start attacking other pains in the sector. The money from the contribution will be used to hire executives, technology and geographic expansion. Currently, Up Estate covers 18 cities, including Belo Horizonte, São Paulo and Curitiba. The startup wants to close the year with a presence in 24 municipalities.

Source: Value Pipeline