PropTech in Latin America

and the Caribbean.

HOW TECHNOLOGY CAN HELP
REDUCE THE HOUSING DEFICIT

AUTHORS
Natalia Laguyas
Fermin Vivanco
Carolina Carrasco
Carolina Piedrafita
Camila De Ferrari
WITH THANKS TO
Carmen Castro Blandon, Roberto Madera, Alessandra Richter, Maria Paloma Silva,
Jeehyon Yoh, Daniel Perez Garcia, Luben Petkoff, and Cesar Buenadicha
for making this study possible.

And to Fernando Abad, Gonzalo Abalsamo, Carlos Archer, Francisco Andragnes, Claudio
Basulto, William Birch, Jorge Campos, Johanna Carolina Cardenas Rodriguez, Abel
Castillo, Caterine Castillo, Alvaro Cepeda, Jose Colina, Carlo D’Agostino, Tiago Del Rio,
German Eletra, Felipe Fierro, Luis Enrique Florez Parodi, Guido Galanter, David Antonio
Garza Moreno, Matias Gath, Alejandro Gomez, Valentina Gonzalez, Lina Guzman, Victor
Harano, Camilo Herrera, Alejandro Jaramillo, Andres de Jongh, Andres Leal, Gabriela
Linares, Andres Londoño, Walter Mata, Gustavo Mayeregger, Nicolas Mendoza, Michael
Mota, Andres Munevar Avila, Fernando Olloqui, Alberto Padilla, Sebastian Paredes, Felipe
Restrepo, Daniel Rivera, Andrea Rodriguez, Santiago Rodriguez, Francisco Rojas, Goffredo
Rossi, Bernardo Silva, Gema Stratico, Hernan Vargas Peña, Cristian Villamizar, Helena
Verron, and Daniel Antonio Zillante for their valuable insights.

Edition
Amanda Pareja

Design
Carmen Gutierrez

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CONTENTS
PROLOGUE 3
INTRODUCTION 4
WHAT IS PROPTECH? 6
WHY IS THIS RELEVANT TO LAC? 7
WHAT HAVE WE FOUND? 10
Methodology 10
Findings 12
Main findings 12
Ecosystem map trends 13
1. Most PropTech startups are still at early stages of development. 13
2. Most PropTech startups are developing solutions for Home Buying and Selling. 15
3. Brazil, Mexico, and Colombia are emerging as PropTech hubs. 16
4. PropTech is still a male-dominated field. 18
5. Few companies currently consider climate impact as a core element
of their value proposition. 19
Players 20
1. Land, construction and infrastructure 20
1.1 Land Provision and Titling 20
1.2 Materials and Technology for Construction and Infrastructure 21
1.3 ConTech Marketplaces 22
2. Home Management and Improvement 23
2.1 Home Expansion and Renovation 23
2.2 Property Management 24
3. Rental 25
3.1 Transactional Rental Marketplaces 25
4. Home buying and selling 26
4.1 Technology-enabled Brokerage 26
4.2 Rent-to-Own 27
4.3 Enablers for Real Estate Agents 27
4.4 Real Estate Data and Analytics 28
4.5 iBuyers 29
4.6 Mortgages and Credit 30
5. Investment 32
5.1 Investment and Collective Financing 32
HOW CAN THE IDB GROUP CONTRIBUTE
TO PROPTECH IN LATIN AMERICA AND THE CARIBBEAN? 33
CONCLUSION 34
BIBLIOGRAPHY 35
1.
Prologue

We started this study by questioning if With this approach, we found that even if
specific business models that applied housing markets are increasingly complex
technology to the real estate market could – with its multiple actors (developers,
help reduce quantitative and qualitative finance providers, buyers, and renters) and
housing deficits, market fragmentation in its varied challenges regarding accessibility,
affordable housing provision, and inequality affordability and sustainability– there are still
in the access to adequate and affordable many opportunities for responding to them
housing and housing finance. by developing new business models that
leverage technology.
We acknowledge the widespread concern
that disruptions created by technology As the housing market in Latin America
have not yet benefited middle- and low- and the Caribbean (LAC) continues to
income households but have rather made an change, this exploratory study reveals
already noninclusive real estate market more several emerging trends that offer
inequitable. Housing specialists feared that insight to those thinking about digital
innovation driven by investors’ appetite for transformation in the housing and real
tangible goods and fixed assets exacerbated estate sector and serve as the foundation
inequality in access to housing in the region for more research.
and failed to address issues such as lack of
transparency, high transaction costs, low Sincere gratitude is owed to all those
mortgage financing, and tedious landlord who contributed to this study, especially
requirements. However, this report aims to to the Italian Trust Fund for MIF Project
challenge that line of thinking. For this, we Preparation (funded by the Italian Ministry
needed to understand the current landscape of Economy and Finance, shareholder of the
of technological innovation in housing and IDB) for making this study possible.
its applications to address the identified
housing deficits.

With this in mind, we began this study with

the aim of identifying new business models
that could positively impact housing
challenges in the region, with a particular
focus on the poor or vulnerable populations.

3
2.
Introduction

Although often viewed as a commodity, Furthermore, the evolution of housing and

housing is first and foremost a safety net real estate markets is central to global
and a human right. Furthermore, adequate climate change mitigation efforts. The global
housing is not merely a physical structure. real estate industry, which consumes 40%
According to the United Nations Committee of the world’s energy and generates 40%
on Economic, Social, and Cultural Rights, of greenhouse emissions, faces enormous
adequate housing is one that provides environmental challenges (World Economic
sufficient privacy, space, security, lighting Forum, 2016)(UNEP, 2022).
and ventilation, basic infrastructure,
and location concerning work and basic Despite the importance of housing, the
facilities, all at a reasonable cost (Office of real estate market nowadays is still rife
the United Nations High Commissioner for with inefficiencies, including complex
Human Rights & UN HABITAT, 2009). and bureaucratic processes, asymmetric
information, and high entry barriers. Due
The Covid-19 pandemic and the strict to the mismatch between supply and
lockdown measures that many Latin demand and limited affordability, housing
American and Caribbean countries imposed shortages often emerge, and informal
as a result only exacerbated the importance markets arise.
of housing for the health and wellbeing
of individuals and families (Habitat for This is especially pervasive in Latin
Humanity, n.d). America and the Caribbean (LAC), a region
with high quantitative and qualitative
Moreover, in the face of changing climatic housing deficits, a rapidly growing urban
conditions, adequate housing must also population, and low penetration of financial
withstand changing temperatures and a services. All these factors exacerbate
higher overall incidence of natural disasters. market inefficiencies, creating vast
Both the frequency and reoccurrence of opportunities for innovation.
climate-related catastrophes have made
housing less accessible and affordable in Given this context, this report aims to map
places prone to disasters, and this instability the actors and trends that apply information
will only continue to aggravate in regions technology and platform economics to
vulnerable to climate-related disasters. housing real estate markets in LAC.

4
This report is divided into four sections. The The information was collected from
first section outlines the basics of property secondary sources and interviews with
technology or PropTech. The second entrepreneurs. This mapping is not
section delves into the importance of tech exhaustive and does not claim to be fully
innovation for addressing LAC housing representative of the ecosystem of actors.
challenges. The third section evaluates the Rather, the report aims to present a snapshot
findings of the research, current trends, and of private-sector initiatives that, supported
areas in which PropTech players are most by new technologies, are addressing current
active. The final section explores how the problems in the housing and real estate
IDB Group, as a strategic partner of the industry. The purpose of IDB Lab is to create
public and private sectors, can support the a portfolio centered on housing inclusion
expansion of PropTech solutions to produce with a special focus on technological
a more inclusive real estate market in LAC. innovation, advancing the IDB Group’s
Lastly, the conclusions outline further mission to improve lives in the region.
analyses needed to make the most of the
sector’s possibilities for growth.

5
3.
What is PropTech?

PropTech, short for property technology, capital, a form of high-risk equity financing
refers to technological innovations that attributed to companies with potential for
disrupt the real estate industry. Therefore, long-term growth.
it includes all types of business models and
applications that utilize technology, such PropTech is reshaping how property is
as software, hardware, artificial intelligence, bought, sold, leased, designed, financed,
and virtual reality, to streamline and replace managed, and marketed. This study
traditional industry processes. utilizes a broad definition of PropTech,
including most phases of the housing value
PropTech startups are companies with a high chain, from the unit’s supply side (land,
potential for growth that aim to develop construction, access to essential services,
new business models and technology and and home improvement) to the demand
apply them to the real estate market. These side (financing, renting, buying, selling, and
companies are usually backed by venture commercializing units).

6
4.
Why is this
Relevant to LAC?
The world is facing a global housing crisis Expanding the accessibility of high-quality,
as more than 1 billion people living in cities affordable, and resilient housing through
across the globe live in substandard housing innovative models is an opportunity to
without clean water or proper sanitation address both types of deficits in the region.
(UN HABITAT, 2020). Thus, although the
adequate housing shortage is not specific Second, LAC is experiencing rapid
to LAC, some region-specific factors make it urbanization, at a rate of 4%-10%
especially critical for the region. annually (Libertun de Duren et al., 2018).
Urbanization is often correlated with
LAC’s housing shortage is two-fold: poverty reduction and an increase in
qualitative and quantitative. The economic productivity. However, a lack of
quantitative deficit refers to the disparity urban planning adds to the strain on the
between the supply and demand of city’s public infrastructure, such as water,
housing. In other words, how many units sanitation, transportation, and health
have to be built per year to keep up with care, severely impacting the quality of life
demand. for urban dwellers. Because the housing
supply is subject to significant capacity
The qualitative deficit refers to the constraints, housing costs inevitably
inadequate conditions of the existing increase when supply cannot meet
housing options, including the quality of demand.
materials and construction, access to basic
services, housing tenure, overcrowding, Unplanned urban growth often leads to
and location in regard to distance from urban inequality and informal settlements,
workplaces. Although the qualitative deficit commonly known as slums. Slums normally
represents more than 90% of the total lack essential services or a guarantee of
deficit in urban areas, current housing the most basic quality standards, such
policies have remained focused on the as improved water sources, sanitation
quantitative deficit, which often emphasizes facilities, sufficient space, housing durability,
subsidies for new construction, while and secure tenure (Libertun de Duren
complementary measures for housing et al., 2018). High urbanization rates will
reform that promote access to urbanized contribute to the region’s quantitative and
land or facilitate access to credit are not qualitative housing deficit if urban planning
prioritized (Libertun de Duren et al., 2018). fails to keep up.

7
Third, the region’s high level of economic Fourth, several current real estate market
informality and the low penetration inefficiencies are ripe for tech disruption.
of financial services such as banking, Currently, in LAC, on average, it takes 360
investing, saving, and insurance hinder days to sell a property and 90 days to
access to financial resources for receive mortgage credit approval (Londono,
affordable housing. Close to 60% of 2022). These lengthy processes caused
workers in LAC work in the informal by information asymmetries, complex
economy (VOXLACEA, n.d.). Most paperwork requirements, and a slow
traditional financial institutions do not bureaucracy hinder real estate owners
lend to informal workers, nor to those across the region. Migrating to tech-enabled
without income or credit history, such as processes can increase transparency and
the migrant population, either because speed in real estate transactions.
banks do not know how to assess their
credit worthiness or because they do not In addition, cross-cutting issues that
see them as a good business prospect. must be considered are climate change
As a result, these groups have to seek with its impact on housing instability and
alternative means of financing, such the real estate industry’s environmental
as savings, microloans, or consumer impact, which accounts for 40% of global
credit, and often resort to informal greenhouse emissions annually (World
land acquisition and incremental self- Economic Forum, 2016)(UNEP, 2022).
construction strategies, being at risk of
becoming victims of high-interest rates In the face of these challenges, multiple
and fraud. Ultimately, the unmet needs of opportunities for innovation arise and
this underserved market present ample entrepreneurs are finding solutions to
opportunities for solutions for the informal simplify and streamline the traditional
worker population and other excluded brokerage industry with the use of
groups. Indeed, studies show that countries digital tools, developing new building
with more developed housing finance technologies, circular economy in materials,
markets also have a lower incidence of energy efficiency, clean energy, water and
informal settlements (Libertun de Duren sanitation, efficient logistics and distribution
et al., 2018). chains, and so on.

8
PropTech entrepreneurship has recently Globally, the PropTech market is predicted
been gaining more and more prominence to account for US$86.5 billion in 2032, up
in LAC. In 2021, venture capital (VC) from US$18.2 billion in 2022 (Future Market
investment in PropTech in LAC amounted Insights, 2022). PropTech presents a growing
to US$1,308 million invested across business opportunity as well as the potential
23 deals, compared to US$261 million to solve vital needs for the population.
raised in 2020, an increase of 500% (for
reference, a total of US$14.8 billion in VC The following sections provide an overview
was poured into the region during 2021) of the LAC PropTech market and the
(Alvarez et al., 2022). technology solutions being developed for
traditional real estate.

9
5.
What Have
We Found?
METHODOLOGY
To present a snapshot of the LAC PropTech Due to limited public information on this
ecosystem, this study considered a sample emerging sector, it was not possible to
of 234 for-profit early-stage companies that fully assess each company and subsector
use technology as a core business model in terms of its revenue, profitability, or
component, are venture capital backed, financing. Only 60% of sampled companies
or have participated in an accredited had public financing information on
entrepreneurship acceleration program. sources like Pitchbook and Crunchbase.
Companies highlighted vary significantly
Information on these PropTech companies in current stage and size, and there are
was collected from public sources, such innovative solutions with great potential
as Crunchbase, Pitchbook, and LinkedIn, for growth across all areas.
as well as primary research in the form of
interviews with key industry players and Figure 1 summarizes the categories used
stakeholders. to classify the different PropTech firms
sampled and the category of the housing
Although many non-profit organizations value chain they fall under. The complete
and public institutions are leveraging list of actors identified can be found
technology to increase access to housing in this link.
for vulnerable populations, this study
focuses exclusively on the private sector.
Thus, the findings discussed in this section
are not intended to represent all the
initiatives already underway in the region
but rather present a snapshot of scalable,
private-sector-led solutions currently
deployed to solve pressing housing
problems in the region.

10
 FIGURE 1
VALUE CHAIN STAGE CATEGORY DESCRIPTION
LAND, Land Provision Land Provision and Titling startups facilitate
CONSTRUCTION, and Titling secure rights to land and property.
AND
INFRASTRUCTURE Materials, and Materials, and Technology for Construction and
Technology for Infrastructure startups design and produce
Construction and innovative materials, and technology tools to
Infrastructure make the construction industry more efficient.

ConTech Marketplaces facilitate the exchange of

ConTech Marketplaces goods and services in the construction industry
through online platforms.
HOME MANAGEMENT Home Improvement and Renovation startups offer
AND IMPROVEMENT Home Improvement tech-enabled services for home improvements and
and Renovation renovations, such as architecture and design tools,
construction finishes, and maintenance services.

Property Management startups offer landlords

Property Management and Real Estate professionals tools to streamline
management operations.

RENTAL Transactional Rental Marketplaces aggregate the

Transactional supply and demand of rental offerings, enable
Rental Marketplaces rental transactions, and offer other value-added
services, such as rental credit.

Real Estate Data and Analytics startups offer real

Real Estate Data
estate market information for users, including
and Analytics
digitized listings.

HOME BUYING AND iBuyers acquire properties to remodel and resell

iBuyers
SELLING at a more competitive price.
Rent-to-Own startups allow prospective buyers
Rent-to-Own
to buy a property after renting it for a set time.
Technology-enabled Technology-enabled Brokerage startups replace
Brokerage traditional real estate brokers with digital processes.
Enablers for Real Estate Agents offer digital tools
Enablers for
for brokers, Real Estate Agents , and companies
Real Estate Agents
to improve their services through technology.
Mortage and Credit startups facilitate access to
Mortgages conventional mortgages, offer tech-enabled
and Credit mortgages or other non-mortgage financing
alternatives.
INVESTMENT
Investment and Collective Financing startups
Investment and
facilitate investment in real estate projects and
Collective Financing
provide crowdfunding for real estate developers.

SUPPLY-SIDE DEMAND-SIDE
Source: Prepared by the authors based on data obtained as a result of mapping the actors and trends in the PropTech sector in Latin America and the
Caribbean for this report.
FINDINGS
Main findings
This study aspires to find PropTech startups upper-middle, and upper socioeconomic
developing solutions that address the region’s groups. 78% of players in our mapping
pressing housing challenges. Undoubtedly are targeting these consumers. These
there are several opportunities to seize large companies require risk capital early in
unattended markets, and the study has found their R&D and product development
several players addressing the region’s main journey. Consequently, these companies
challenges through private sector initiatives. need to develop digital services with
higher profit margins to sustain the
With this in mind, companies fall into two company’s growth. Thus, their unit
categories: mainstream companies versus economics rely on a certain ticket size
those that are proactive in their approach to range in order to be profitable.
positively impact a social problem. In each
one, players have the potential to create As these startups grow and acquire
scalable impact and expand access to market share, they may expand into
property for lower-income groups but face solutions for affordable housing. In this
different challenges. process, a challenge these players face is
understanding and segmenting the needs
On the one hand, private, for-profit, VC- of lower-income populations and their main
backed companies are usually discouraged housing challenges. For affordable housing
from creating business models targeting advocates, there are several approaches to
low-income populations since barriers to incentivize this expansion and IDB Lab is
entry are high and commissions are low. uniquely positioned to support companies
in developing product offerings for these
For-profit, VC-backed private startups are consumer groups, for instance, by providing
developing PropTech solutions for middle, technical assistance to co-create pilot

12
projects to target lower socio-economic limited exit options when evaluating
levels. A later section will cover other ways socially-oriented ventures due to lower
in which IDB Lab can help these actors. growth projections and prioritizing other
opportunities. This is evident throughout
On the other hand, 12% of actors mapped the sample of companies, as only
are earlier-stage socially-oriented startups 40% of socially-oriented players have
developing solutions for lower-middle and obtained financing. There remains ample
low-income populations. For these business opportunity to fund companies with lower
models, the main challenges are obtaining rates of return and a lower risk profile that
sufficient financing and creating solutions is yet to be filled.
that are scalable and profitable.
For these players to scale they require
These players often face a mismatch with patient capital, as many of these models
investors, as prioritizing social impact may take longer to become profitable. It is at this
be seen as riskier, less profitable, and not stage that IDB Lab can work with companies
as scalable as mainstream business models. to help them scale their operations,
In contrast, VC investors seek short- and successfully tracking their social impact, and
medium-term returns and exponential communicating growth potential to impact
scaling potential. Investors often face investors to secure financing.

ECOSYSTEM MAP TRENDS

1. Most PropTech startups
are still at early stages of development.
70% of the identified PropTech startups models, and models that benefit from local
are still at an early stage of development. network effects are all factors that may
The relative growth stage of the explain why startups have preferred to
companies was determined by the number increase market share in a single country
of employees, financing raised, and before expanding internationally.
geographic scope (see Figure 2). This
finding has promising implications for the Second, the median number of employees
PropTech sector in LAC, suggesting that it in the sample is 19, while the average is
is still a developing market with room for 111. This suggests that companies have
new players to innovate. generally kept teams small except for a
few outliers. It should be noted that the
Other metrics reinforce the sector’s early use of technology as a core component of
stage of development. First, the share of a business model can distort these figures,
international expansion among PropTech as technologies allow businesses to gain
startups is 15%, meaning that most international traction without having to
companies do business in just one country. set up brick-and-mortar operations and
Differences between the various regulatory automate tasks without having to hire as
frameworks, capital-intensive business many employees.

13
Third, for companies with financing early stages of the financing cycle, with a
information available, about 60% of the few outliers pulling up the average.
sample, the median equity financing
amount raised is US$1.5 million, while the Lastly, the median founding year is 2018,
average amount is US$28 million. In VC, a while the average is 2017. This means
US$1.5 million financing round is usually that, on average, companies have been
considered a pre-seed or seed round, where in operation only 5 years. Since startups
startups raise financing from angel investors typically take three to four years to become
and early-stage VC investors. Again, this profitable, these different business models
suggests that companies are still at the are still developing (Kolmar, 2022).

FIGURE 2

GROWTH STAGE

EARLY GROWTH EXPANSION

Number of employees <50 50-100 >100

Financing <1M 1-10M >10M

Geographic scope Not yet expanded Expanded nationally Expanded internationally

Companies were categorized under one Early, Growth or Expansion if they met two out
of the following three criteria.
Source: Prepared by the authors based on data obtained as a result of mapping the actors and trends in the PropTech sector in Latin
America and the Caribbean for this report.

14
2. Most PropTech startups are developing
solutions for Home Buying and Selling.
As illustrated in Figure 3, most actors in Home Buying and Selling offers the
the LAC PropTech sector are working widest range of subcategories, ranging
in Home Buying and Selling solutions from marketplaces to data solutions and
(88%), specifically under the Tech-enabled financing options for optimizing existing
Brokerage model. Under this model, firms transaction processes and increasing
create products that replace traditional real access to affordable housing. However,
estate brokers with digital processes. Home Buying and Selling solutions in the
sample mostly solve demand-side problems
Startups developing Home Buying and within the existing housing stock, and for
Selling solutions are also at a more the conventional, middle-class buyer. The
developed stage than the average. following section presents a deeper dive
Specifically, 36% of startups in this into the tech solutions offered for Home
category are at a Growth and Expansion Buying and Selling.
development stage (see Figure 2), higher
than the overall average of 30%.

FIGURE 3

WHICH CATEGORIES HAVE THE MOST ACTIVITY?

125
Number of Companies

100 110

75

50
51
25 34
20 18
0
HOME BUYING LAND HOME INVESTMENT RENTING
AND SELLING CONSTRUCTION MANAGEMENT
AND AND
INFRASTRUCTURE IMPROVEMENT Category
Source: This report was prepared by the authors based on data obtained as a result of mapping the actors and trends in the PropTech
sector in Latin America and the Caribbean. N=233 companies.

15
3. Brazil, Mexico, and Colombia are
consolidating as PropTech hubs.
Across the region, the housing market is Figures 4 and 5 illustrate that the PropTech
experiencing innovation, with some nations sector activity is mostly concentrated
developing robust local ecosystems and in a few countries. This has important
momentum for the development of PropTech implications for entrepreneurs starting
solutions. From the sample, Brazil leads in less developed markets, such as in the
the region as the country where the most Caribbean. Usually, smaller local networks
startups were founded (Figure 4), however, force entrepreneurs to seek international
Mexico is the country where the most mentorship and advice. Indeed, in recent
PropTech startups have operations (Figure 5). years, several private-sector initiatives
Although Brazil is the largest market in the have sought to develop PropTech networks
region, with a total population of 212.6 million, throughout the region, such as PropTech
due to language barriers, Mexico appears LATAM and PropTech LATAM Hub. Moving
to be a more attractive destination for the forward, these networks are essential for
internationalization of Spanish-speaking PropTech founders to connect with other
LAC firms. Colombia is a close runner-up as international players to seek advice and
both an HQ for PropTech companies and a opportunities and facilitate international
destination for international expansion. expansion opportunities in a later stage.

FIGURE 4

WHERE ARE PROPTECH STARTUPS MOST FOUNDED IN LAC?

BRAZIL 56
Country of HQ

MEXICO 55
COLOMBIA 38
CHILE 21
PERU 14
ARGENTINA 14
ECUADOR 12
URUGUAY 4
PANAMA 4
GUATEMALA 3
DOMINICAN REPUBLIC 2
BOLIVIA 2
VENEZUELA 1
PUERTO RICO 1
PARAGUAY 1
HONDURAS 1
0 20 40 60

Number of Companies
Source: Prepared by the authors based on data obtained as a result of mapping the actors and trends in the PropTech sector in Latin
America and the Caribbean for this report. N=229 companies.

16
 FIGURE 5

WHERE DO PROPTECH STARTUPS HAVE OPERATIONS?

MEXICO 77
Country

BRAZIL 66

COLOMBIA 51
ARGENTINA 33
CHILE 22

PERU 14
ECUADOR 11
URUGUAY 8
PANAMA 6
DOMINICAN REPUBLIC 4
GUATEMALA 3
BOLIVIA 2
VENEZUELA 1
PARAGUAY 1
HONDURAS 1
0 20 40 60 80

Number of Companies
Source: Prepared by the authors based on data obtained as a result of mapping the actors and trends in the PropTech sector in Latin
America and the Caribbean for this report. N=234 companies.

17
4. PropTech is still a male-dominated field.
Only 7% of founders in the aggregate Women systematically have less access to
sample of PropTech startups are women, housing opportunities in terms of access
as shown in Figure 6. According to a to financing and ownership. An IFC study
recent study by Endeavor Mexico and calculated that only 6% of women in Central
Glisco Partners, in the region, only 5% America have a home loan (Swissinfo.
of the founding teams of startups and ch, 2020). A disproportionate gender
scaleups in the region were made up representation among decision-makers
solely of women. This is critical as women can prevent the creation of more inclusive
entrepreneurs face additional challenges models and exacerbates the shared fear that
in accessing capital and building networks disruption created by technology is pushing
in a male-dominated sector. an already not inclusive real estate market.

FIGURE 6

WHAT IS THE GENDER COMPOSITION OF FOUNDERS?

100%
7%
Female
Percentage of F/M

93%
Male
75%

50%

25%

0%
Total Founders
Source: Prepared by the authors based on data obtained as a result of mapping the actors and trends in the PropTech sector in Latin
America and the Caribbean for this report. N=234 companies.

18
5. Few companies currently consider climate
impact as a core element of their value proposition.
As mentioned before, housing solutions However, few companies currently consider
should address climate impact. In LAC, climate impact as a core element of their
efforts to reduce the environmental impact value proposition outside these two groups.
are mostly concentrated around the
construction and infrastructure sectors. Opportunities remain for startups to
explore housing solutions that strengthen
Both subcategory selections Materials adaptation to climate change and curb the
and Technology for Construction and harmful environmental impact of existing
Infrastructure and ConTech Marketplaces units. In construction, sustainability is
included in the following section outline mostly addressed in new units. Startups
several innovative products that are working that retrofit existing units and alleviate
towards a lower carbon footprint. For the qualitative deficit are also helping to
example, through the development and use address sustainability and must scale
of recycled and recyclable materials and the their operations.
reduction of waste and inefficiencies in the
construction process.

19
PLAYERS
This section aims to highlight entrepreneurial success cases that then create ripple effects
and inspire further innovations. Profitability and scalability lead to the next generation
of risk-taking. This is especially true in LAC where several PropTech startups have scaled
rapidly and yet numerous inefficiencies in the real estate market remain ripe for disruption.

1. Land, construction and infrastructure

1.1 Land Provision and Titling
For low-income groups, land and housing In Colombia, Suyo provides services to
development and purchasing primarily formalize housing and land titles for low-
occur outside formal markets. This leads income families. Formalizing property
to informal land acquisition strategies and titles often involves lengthy paperwork
insecure land tenure. that can take several years. Suyo can
provide clear guidelines on the different
As defined by the Economic Commission for routes, technical and legal requirements
Latin America and the Caribbean (ECLAC), to formalize properties through its team
secure land tenure entails secure rights and IT platform. Suyo works with both
to land and property, free from outside the public and private sectors through
interference, and able to reap the benefits different initiatives. Since 2020, Suyo has
of labor and capital invested. been positioning itself as an operator of
mass formalization projects as result of its
In Colombia, land formalization processes role in the Land for Prosperity program
can take several years (Guzman, 2022). in partnership with Tetra Tech and USAID
There is a lack of data cohesiveness, and Implementing formalization projects in
information is usually stored on different Caceres (Antioquia), Fuentedeoro and
government databases, often inaccessible Puerto Lleras (Meta) covering more than
to the public. Additionally, there are several 14 thousand parcels in rural areas specially.
routes to take when formalizing property In addition, Suyo works directly with families
titles, and the process can vary greatly seeking to formalize their property through
according to the specific situation. subsidy models with the private sector.
To expand the scope of its work,
Technology can speed up formalization Suyo is exploring opportunities to
services significantly. For instance, provide advisory services and technology
integrating artificial intelligence to instantly solutions for governments and businesses
scan documents when looking through to deliver formalization services.
huge databases or tailoring the process
according to the client’s needs and available
information.

20
1.2 Materials and Technology
for Construction and Infrastructure
An ever-present challenge in housing is Peruvian startup, Ecobuildtec, which
attaining construction efficiency and scalable develops low-cost, fast-build housing
solutions while using greener materials structures with a circular economy
and adapting housing structures to local approach, where it reuses construction
environments. waste, increasing sustainability and reducing
the final cost of the units. Ecobuildtec’s
Startups in this subcategory are developing housing is being used to help the mining
alternatives to traditional construction industry provide housing facilities in
methods and materials to make the extreme environments. Ecobuildtec has
construction process more efficient and patented technology to prefabricate the
reduce the final cost of the housing units. entire building which provides thermal
In addition, they create and use more and acoustic insulation, and package it for
sustainable and less polluting materials, transportation and quick installation.
producing more durable units over time.
An underexplored field is the intersection
On the one hand several several of between modular housing innovations and
these startups are innovating in the use new materials, where startups can prioritize
of materials. One approach is through energy efficiency and minimize waste by
developing alternative materials for sourcing recycled materials.
construction, from recycled or repurposed
inputs. For example, WAS Co, a startup As mentioned earlier, adequate housing
based in Mexico, produces a concrete is not limited to physical infrastructure,
replacement made from industrial plastic and should include access to essential
waste called Polycrete. services infrastructures, such as water
and sanitation, transport, and health
Other startups are encouraging the use of care. Such services are often large-scale
natural biodegradable materials with low infrastructure investments, therefore
carbon footprints. TechnoClay, based in these startups often work with the public
Bolivia, designs construction materials made sector or large private corporations as
out of soil, wood, and vegetable fibers. clients, developing business models usually
known as B2G and B2B.
On the other hand, modular housing has
great potential to generate efficiencies in An example of this outside of LAC is Litro de
the construction process. One example is a Luz. Litro de Luz is an organization founded

21
in the Philippines with operations in 35 Litro de Luz typically works with rural
countries. In 2011, Camilo Herrera brought the communities to install the lighting posts when
idea of ​​“A Liter of Light’’ to Colombia, where starting a project, where they select members
it expanded to several other LAC countries of the community as “light ambassadors”,
including Ecuador, Brazil, Dominican Republic, responsible for solving maintenance problems
Argentina, Ecuador, and Bolivia. and reporting any issues with the lighting
poles (Fernández Sánchez, 2018). That
Litro de Luz’s first product was affordable is one of the few ways they involve local
lighting poles made from recycled plastic communities in the installation process and
bottles, and later in 2015, Litro de Luz ensure the project’s success. In LAC, Litro de
built ELIOT (energy, light, and Internet Luz has granted lighting services for more
of Things), a lighting post with a built-in than more than half a million people and
internet router. internet access for more than 3,500 people.

1.3 ConTech Marketplaces

Additionally, opportunities for innovation in Streamlining the process of materials and
construction also lie in creating technology saving costs is a great opportunity to
and streamlining processes for current ensure that the construction of new units is
players. Currently, construction materials achieved on time and thus work to reduce
supply in LATAM is a USD 122Bn per the housing deficit or quantitative deficit.
year opportunity (Del Rio, 2022). Several This is indeed the case of EQUIP, given that
marketplaces have emerged recently aiming the startup currently caters primarily to
to tackle these challenges. Ultimately, social housing developers.
increasing efficiency in operations can
reduce the use of inputs and waste Chilean ConTech, ObraLink, is also working
generation and therefore the cost of to increase productivity and reduce the
supplying new units to homeowners while costs of construction projects. ObraLink
having a positive environmental impact. has developed data collecting hardware
for construction projects. Specifically,
Peruvian startup EQUIP markets itself as ObraLink’s hardware can autonomously
LATAM’s one-stop shop for construction collect information and send it to the
materials. In the region, small construction site modeling (BIM) system. The product
companies usually buy supplies at the local is typically attached to a structure with
hardware store at a high markup. EQUIP’s visibility of the entire construction
platform offers a more efficient and cost- project, such as a tower crane. This allows
effective alternative, allowing constructors tracking several activities without workers
to save up to 20% of the cost and speed intervention, such as pouring concrete,
up to 10 times the process. It allows users formwork, and concrete strength in real
to find fifteen thousand products spanning time.
over one hundred brands, saving smaller
construction companies time and money Ultimately, startups are taking different
on their purchases. Currently, EQUIP is approaches to solving inefficiencies in the
piloting a credit service for construction construction industry processes that lead
companies that need funding to complete to higher costs, longer project times, and
housing developments. higher environmental impact.

22
2. Home Management and Improvement
2.1 Home expansion and renovation
In LAC, people employing informal housing than 130 million Latin Americans are
construction techniques usually rely on the informally employed. Although credit
materials and resources available to them. brokers are filling some of the gaps in
It is estimated that 90% of government- transparency, underwriting methods still
subsidized homes in Colombia are have a long way to go.
delivered unfinished, i.e. often without
doors, windows, or appliances, reducing A Peruvian startup, Mi Bolsillo, aims to
the upfront property cost by up to 20%. improve financial literacy and health in
This increases accesibility by reducing a Latin America. It currently has 221,000
price that would otherwise be unaffordable users of its finance app distributed among
for many. five countries across the region. Besides
helping users track their expenses and
Brazilian PropTech, Nova Vivenda, is adopt healthy financial habits, Mi Bolsillo
a platform that accompanies users is working to increase financial literacy
throughout the self-construction process, by granting its users access to a library of
generally starting with the previously resources that can answer users’ questions
mentioned unfinished housing approach. such as the effect of inflation on prices or
The company’s mission is to restructure how mortgage loans work. Mi Bolsillo has
informal housing developments built expanded into the financial marketplace,
along the outskirts of Brazilian cities. partnering with financial institutions and
After registering on the online platform, matching users with credit options when
users are able to find design, materials requested. Together with Habitat for
and construction experts and financing Humanity’s Terwilliger Center for Innovation,
options to start the work. Nova Vivienda La Mezcladora Innovation Hub, and Peruvian
has impacted more than 3,000 families real estate developer Menorca, Mi Bolsillo is
by making housing construction in Brazil’s leveraging user data to pilot a credit scoring
informal settlements safer, more durable, mechanism to underwrite the risk of a credit
and more cost-effective. Nova Vivenda’s home improvement loan. By analyzing
information systems gather how the users’ spending trends, savings priorities
housing reforms supported contribute to and proof of payments of other services,
climate change mitigation and adaptation Mi Bolsillo enables its partner lending
(i.e. protection against storms and rains, institutions to provide more affordable
sanitary contamination, etc.), and it has credit to some of the most underserved
a partnership with Ambar, a Brazilian sectors of the population. Not having
Construtech working with sustainable enough user information about users’ ability
building technologies. and willingness to pay often causes banks
to establish high-interest rates or outright
Home Improvement and self-building deny potential clients.
credit are big opportunities from both
the environmental and social impact
perspectives. A key obstacle to formal
solutions in the credit market is the
region’s high level of informality, as more

23
2.2 Property management
These platforms seek to simplify condominium management, Neivor’s
management processes, from the residential management app also offers a
administration of tenant contracts and the payment processing function. So far, this
calculation of everyday expenses to the PropTech has raised US$5 million in equity
registration of income, expenses, funds, financing to develop its digital tools.
and remunerations, among other functions.
In particular, property management For multifamily condominiums, poor
platforms can be great for overseeing large management practices lead to negative
multifamily condominiums. consequences, as properties with
unpaid rents and dues risk losing value.
Neivor, a Colombian PropTech with Residential management apps can
operations in Mexico is a vertical Software help multifamily condominiums reduce
as a Service (Saas) company for residential administrative costs,better track finances,
and multifamily buildings. Aside from and increase security measures in
tracking expenses and facilitating condominiums.

24
3. Rental
3.1 Transactional Rental Marketplaces
In urban areas in LAC, 40% of people still landlord of monthly payments and assists
live in rentals. An IDB study examining 19 lower-income tenants access the formal
metropolitan areas in Argentina, Brazil, Chile, rental market by eliminating the need
Colombia, El Salvador, Jamaica, Mexico, Peru, for a guarantor, an often insurmountable
and Uruguay detected a diversity of trends in obstacle.
the residential rental markets: in some areas
the share of households renting as opposed Aside from lengthy processes and increased
to buying rises as income rises whereas, in paperwork, renting a property can also
other areas, rental housing concentrates involve high upfront costs. After observing
among middle-income households (Blanco that first-time renters often struggled to
et al., 2014). pay the security deposit, Chilean PropTech
startup uHomie piloted a ‘rental loan’.
Renting poses several benefits compared uHomie, founded in 2019, by a Venezuelan
to homeownership. For instance, rental entrepreneur matches landlords and
properties accommodate a mobile working potential tenants, specifically targeting
economy and allow people to reside in first-time tenants. uHomie also provides
central locations without the expense of several funding modalities and digital tools
buying property, but it’s often inaccessible for tenants and owners to facilitate rental
for low-income households due to lack of transactions. For example, the rental loan
previous rental references, credit history, or allows tenants to pay their security deposit
lack of funds for a security deposit or rent in several monthly installments. The need
prepayment requirements. Indeed, rental for rental loans quickly became evident as
housing is highly popular among some of the company received around 1,200 loan
the more dynamic and mobile population requests before even launching the product.
groups, such as young people, one-person With this, uHomie is working to make the
households, and divorced individuals leasing process faster and more accessible.
(Blanco et al., 2014).

Transactional Rental Marketplaces tackle

inefficiencies in the rental market, such as
informational asymmetries, high transaction
costs, and high upfront costs.

Companies in this subcategory such

as Mexican Homie, Chilean Houm, and
Colombian Aptuno target a major obstacle
faced by many in the formal rental market:
the need for a guarantor. In addition to
connecting landlords and tenants through
their marketplace, these startups conduct a
thorough evaluation of the potential tenant,
upon which they agree to take on the role
of the guarantor. This both assures the

25
4. Home buying and selling
4.1 Technology-enabled brokerage
The PropTech startups in this vertical tech-enabled broker founded in 2022, offers
focus on offering products that simplify real estate brokers an array of services to
and streamline the brokerage industry’s strengthen their selling process, such as
processes using digital tools. These startups a valuation tool, arranging virtual tours,
differ from iBuyers, a category explored marketing leads and team management
later in this section, in that, unlike iBuyers, platform. Automating and professionalizing
they do not purchase properties but rather home selling activities can simplify and
facilitate rental and property transactions. speed up the selling process.

In Colombia, La Haus is an online-first Livima, a Brazilian startup, offers landlords

technology-enabled broker. The company a platform to list their property and sell it
offers a platform that lists multiple online. Livima’s platform is linked to the top
properties and matches customers with digital listing web pages in Brazil, such as
real estate specialists. Digitizing listings and OLX and Viva Real, which allows landlords
bringing transactions online create safer to get more leads and potential offers for
and more agile processes for landlords their property listings.
and tenants. Recently, La Haus launched
“La Haus Now” a new product to provide Ultimately, companies in this category
financing for real estate developers, mainly facilitate real estate transactions
guaranteeing up to 25% of units purchased through digital platforms. Digitizing these
in the first 90 days. transactions increases transparency in
the market, allowing buyers and sellers to
Startups in this category also offer tools compare property list prices and purchase-
for landlords to sell their properties more intent information in real-time to better
efficiently. For instance, pulppo, a Mexican inform their buying and selling decisions.

26
4.2 Rent-to-Own
During the last five years, rent-to-Own for a mortgage and buy the property from
startups have gained popularity in the the startup or a third party after a set time.
US and the business models are trickling
down to LAC. Rent-to-Own services have Casa Bravo, a Mexican Rent-to-Own startup,
different modalities but usually allow is offering an alternative housing financing
customers to buy a house after becoming scheme that allows future homeowners to
tenants for a set time. Depending on the work towards being mortgage-eligible. Asking
particular service tenants may have to pay only for a minimum three percent down
part of the down payment upfront or save payment, Casa Bravo uses between three and
it during tenancy while becoming tenants six months’ income records to underwrite
with the option to buy. With the monthly tenants before purchasing the property. This
rent, tenants can increasingly contribute way, typically high down payment costs are
to the house’s equity. In parallel, Rent-to- reduced, and tenants can build towards their
Own tenants build a credit score over time future down payment and improve their
through their monthly payments. After credit score while renting the apartment.
saving money towards a down payment and Casa Bravo is aiming to facilitate the purchase
building a credit score, tenants can apply of 100 properties by the end of 2022.

4.3 Enablers for Real Estate Agents

These startups create digital tools that facilitate underwriting so that brokers can
allow players in the traditional industry to offer properties without needing a guarantor
benefit from technology in their current to co-sign the lease.
operations. Real estate agents often
have the industry expertise but not the Lastly, working as a real estate agent is
digital tools to streamline their sales and not only a full-time job but can also be a
brokerage processes online. Examples source of extra income for people, such
include 3D tools for real estate agents to as gig economy workers. For example,
guide their clients through the property Colombian transactional marketplace
and CRM tools for real estate companies. Aptuno created a referral program where
people are encouraged to submit rental
Mexican Morada Uno helps real estate listings they spot to the marketplace. In
agents and companies to underwrite and this way, people can receive USD$25 for
insure their rental customers. The startup each published property and up to 30%
allows real estate brokers to improve of the first rent of each rented property,
their tenant screening process and insure enabling gig economy workers to have
residential leases. As such, Morada Uno can additional sources of income.

27
4.4 Real Estate Data and Analytics and CEO Gustavo Mayeregger, he shared
In LAC there is limited public transaction that the company’s algorithm is suited to
data or centralized listing services where analyze all geolocated data.
real estate brokers post listing and closing
property prices, such as the Multiple Listing Notably, Place Analyzer has carried out
Service (MLS) in the United States. This mapping efforts in areas of Paraguay not
presents a great opportunity for startups surveyed by Google Maps.
looking to centralize information on the
real estate market. This category also includes digitized listing
platforms, where real estate classified ads
Startups such as Lamudi, a real estate are vetted and posted.
classified website based in Berlin, Germany
and operating in 34 countries, publish yearly Digitizing rental information makes real
reports on real estate trends and transactions. estate data accessible, transparent and
inclusive. Digital portals allow consumers
Place Analyzer, a PropTech startup from to make better-informed decisions due
Paraguay is a smart real estate appraisal to the real-time availability of information
web platform. Using artificial intelligence, and price comparison. Lastly, public
Place Analyzer’s algorithm can value land information on prices, transactions, and
without comparing nearby prices. In an real estate market trends reduce likelihood
interview with Place Analyzer’s founder of scams.

28
4.5 iBuyers
iBuyers startups offer an alternative to bought and sold homes with Home Capital.
the traditional approach of buying and Within buying and selling transactions, the
selling properties. These companies acquire company can digitize up to 80% of the
properties, remodel them and then resell transaction process, streamlining property
them at a more competitive price. rotation in their platform to an average of
60 days. The greater rotation of properties
iBuyers’ value proposition for homeowners allows Home Capital to buy homes at not-
lies in facilitating simplified and safe so-below-market prices and to sell them at
transactions. iBuyers take on the task and risk a discount compared to traditional sellers.
of purchasing, remodeling, marketing, and Home Capital is also piloting several credit
reselling the property, often taking care of all offerings to advance financial inclusion,
the necessary paperwork. Given that more drawing from user data to calculate the
than half of homeowners are looking to sell in risk of pre-approved credit products. Home
order to solve an urgent economic need, the Capital currently operates in 3 cities in
immediate liquidity granted by iBuyers seems Colombia and has raised an equity round
to be their greatest selling point. of US$5 million from Bancolombia as a lead
investor and an additional US$20 million
For example, Colombian Home Capital is a from different financial instruments to
‘Housing Outlet,’ working to make housing finance the buying and selling of houses.
more accessible by offering properties at
discounted prices. Originally, the company In all, iBuyers address the qualitative
bought indebted homes about to enter a housing deficit by reintroducing housing
moratorium; however, it now purchases all units as remodeled properties often at
types of properties. Between February 2021 a more accessible price and in better
and June 2022, more than 600 families conditions.

29
4.6 Mortgages and Credit
One of the region’s main problems affecting less than three weeks. Relative to traditional
access to housing is the low penetration of banks, Yave claims to shorten the credit
financial services and informality. Mortgages obtaining process by 3x for its users.
are a prime example. Currently, there is a
lack of mortgage offerings with favorable Increasingly, startups are treating mortgage
rates and terms, especially for lower and credit products as an ecosystem of
socioeconomic groups and informal workers. solutions. For instance, DD360, a Mexican
Often, low-income and informal workers build PropTech founded in 2021, combines FinTech
their houses incrementally, using savings and service offerings for housing development,
consumer loans to finance the construction construction, and acquisition. Specifically,
of new rooms and other improvements. In DD360 offers financing and support for
LAC, mortgage loans constitute only 10% of real estate developers to manage their
GDP, compared to 50% in the US. projects through their platform. In parallel,
the company also offers individual mortgage
There are numerous opportunities for loans to home buyers. By having information
tech innovations in mortgage lending, on the demand and control of the individual
and startups are tackling this challenge mortgages granted, DD360 can calculate
through different approaches. First, digital- informed projections on the risk and
first brokers are increasing transparency potential success of a project for developers.
in mortgage options for consumers. In August 2022, DD360 raised US$91 million
Colombian Vecindario, for example, in equity financing to complement the
guides users through the entire mortgage US$140 million in credit lines.
application process. Technology has
enabled Vecindario to connect hundreds of Chilean PropTech Philippo offers a financial
data sources to predict when a family can alternative to conventional loans of
purchase a home and access sources of immediate liquidity for property owners
financing without requesting it. As a result, looking to sell. In this case, the cash offer,
37% of homes were sold to people who which can be almost two-thirds of the
believed it was impossible due to a lack of appraised value, is effective even before
financial literacy. Instead of simply providing the property is sold. Often, this advance
information about the various mortgage payment cancels the current mortgage,
options available, Vecindario teaches people allowing homeowners to obtain new credit.
how to purchase and finance a house. For a set time, homeowners then become
Currently, Vecindario has over 340,000 tenants in their property, paying rent until
users learning about mortgages, financing, the property is sold and have the upside
and home buying. of benefiting from any increase in property
valuation. Phillipo’s technology performs an
Mexican startup Yave offers a platform with automatic valuation and a financial analysis
a mortgage guarantee or current mortgage to give the approval and coordinate the
refinancing. Yave’s evaluation process is appraisal and the offers on the property.
fully online. Its platform allows customers Philippo has raised equity investment from
to upload documents needed for credit renowned investors such as YCombinator,
scoring, monitor credit approval status, and Soma Capital, Goodwater Capital, Magma
process payments. The startup’s digital-first Ventures and Fen Ventures, and holds
process allows them to pre-approve credits partnerships with firms such as Mercado
in less than 12 hours and apply credits in Libre, Banco Santander, Houm, and Nexxos.

30
Currently, Philippo holds a portfolio of 23 population (Demirgüç-Kunt & Klapper, 2018).
properties and will continue expanding its Looking into the future, there is a great
acquisition of properties. opportunity for startups to partner with
traditional banks and integrate technology
However, a strategy to attend underserved into their existing services. For instance,
customers has yet to be addressed. artificial intelligence can automate parts
Traditional banks have not yet developed of the traditional underwriting, generate
a modern mechanism to assess credit risk unbiased credit scores, and agile services to
for unbanked customers, about 60% of the reduce mortgage processing time.

29
Latin America: Most still keep their money under the mattress

31
31
5. Investment
5.1 Investment and Collective Financing
In Latin America, real estate is a relatively people to invest fractional amounts in real
illiquid asset. On average it can take estate projects, such as Mexican startups
between four to six months or even up to briq.mx and 100 Ladrillos. briq.mx allows
two years to sell a property (Pintle, 2021). customers to invest minimum ticket sizes of
However, political instability and currency US$5. Investors hold a prorated share of the
volatility make it a valuable investment apartment’s equity and later get their return
asset, as its valuation and demand are on the investment when the property is sold.
guaranteed over time.
In addition to presenting a relatively liquid
Peruvian startup Proper’s mission is to investment opportunity for people who want
help people purchase property as an to deposit their extra savings, collective
investment. Proper’s platform allows financing platforms can provide a solution
users to review information on the listed for real estate developers. Considering the
projects and personalize investment quantitative deficit, it is feasible to channel
decisions, obtaining personalized guidance these resources into multifamily living and
and offers. Additionally, having an online social housing projects, as the lack of high
process allows customers to ensure access, profitability margins often causes real estate
secure transactions, and increase customer developers to opt for other types of projects.
confidence in purchasing these assets. However, given that Latin America is a region
with low savings rates, this opportunity
Additionally, crowdfunding or collective has yet to be explored (Inter-American-
ownership startups have emerged to allow Development Bank et al., 2016).

32
6.
How can the IDB
Group Contribute?
The IDB Group is uniquely positioned to and more agile testing processes so that
support actors carrying out digitalization entrepreneurs can test the viability of their
and innovation efforts. Through its products in a low-risk environment.
understanding of regional and country
challenges, it can support innovative Lastly, IDB Group can help players in less-
entrepreneurs in addressing critical developed entrepreneurship ecosystems
economical and social gaps with both succeed. As mentioned earlier, most
its public and private sector windows. PropTech startup activity is concentrated
Specifically, IDB Lab, with its appetite around the three largest LAC markets:
for risk and innovation, and its financial Brazil, Mexico, and Colombia. Entrepreneurs
instruments centered on emerging from less developed PropTech markets
business models, can help build those may struggle to find mentorship, financing,
that are developing socially inclusive and and opportunities to expand into other
green solutions while remaining profitable, markets. Thanks to its regional expertise
shaping the evolution of PropTech in the and understanding of the pressing housing
region. challenges in LAC at a local level, IDB Group
support can provide the resources, technical
Second, the IDB Group is strategically expertise, and private sector connections for
positioned to connect government entrepreneurs to tap into a regional network
leadership and private initiatives. The latter and learn from the region’s success cases.
can be enabled and supported by public
policy, while public funds can be leveraged
by private investment. As the public sector
becomes overstretched with demands and
fewer resources, market-based solutions play
a critical role in addressing the underlying
causes of housing deficits – lack of access
to credit, lack of differentiated solutions
per income segment; inadequate self
construction practices; cumbersome titling
processes and/or deficient access to basic
services, among others– while reducing fiscal
pressures. The IDB Group can work with
governments to create regulatory sandboxes

33
7.
Conclusion

This study has analyzed the array of value opportunities for innovation lie all along the
propositions within the PropTech sector. value chain.
Worldwide, the global PropTech market
is already worth US$18.2 billion, and is set Further analysis is needed to make the
to grow to US$86.5 billion in 2032 (Future most of the sector’s possibilities for growth.
Market Insights, 2022). The aim of these analyses should be to
understand and describe the market for
In LAC, PropTech remains a nascent sector, each segment by studying a variety of
where most companies mapped were populations, such as the elderly, lower-
founded in the last decade and are at an income groups, migrants, and informal
early stage. Brazil, Mexico, and Colombia workers, and their concerns, needs, and
are emerging as PropTech hubs, however, preferences. Another area for potential
significant activity has not yet penetrated growth for PropTech companies is climate
the rest of the region. In addition, PropTech change: how to make housing greener,
is still a male-dominated field, and few not only during construction, reducing
companies currently consider climate emissions and climate impact, as well as
impact as a core element of their value how to make housing more resilient to
proposition outside of those working around climate disasters. There are a few PropTech
construction and infrastructure. companies (Litro de Luz, Nova Vivenda,
etc.) that are making strides in this,
PropTech startups mainly address two more is needed.
key issues in the traditional real estate
market: lack of transparency and processes’ The importance of tech innovation in real
inefficiencies. Reducing costs and making estate is clearer than ever. There is an
information available equalizes the market’s opportunity for technology to renew the
playing field. The opportunity for PropTech traditional brokerage models and thus
startups to develop business models that reduce the qualitative and quantitative
cover lower income brackets is still largely deficit. Investing in technology can help
unexplored. Currently, profitable businesses create business models that increase
are mostly serving high-income bracket access and affordability of housing options
groups. Thus, large-scale solutions that for vulnerable and lower income groups.
would make investing in the low-income PropTech initiatives, with the support of
segment profitable remain an opportunity private investors and the public sector, are
for PropTech companies to target. Moreover, uniquely positioned to fill this gap.

34
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