Renting in Latin America is restrictive. Most landlords require three months of rent as a deposit and a guarantor that owns property in the same city to co-sign the lease. Santiago Morales, the co-founder and CEO of proptech MoradaUno, said this dynamic makes 40% of prospective renters ineligible. His company wants to get more tenants into rentals by underwriting their risk.
“That’s the largest pain point in the industry today,” Morales told Read. “People not being able to rent where they want, or they have to, like, rent with roomies, roommates or basically can’t rent. So we said, let’s go fix that. Let’s go solve that problem.”
The result was MoradaUnoa Mexico City-based company that looks to upfront tenant risk for landlords. The company works with real estate brokers by screening and underwriting potential tenants and agreeing to take on their rent payments if the tenants stop paying. Morales said the company’s thorough vetting process, which includes background checks and income verification, weeds out a lot of bad actors from the start. MoradaUno also provides additional optional broker services like legal and home insurance.
The company decided to target brokers, as opposed to landlords themselves, due to the fragmented nature of Mexico’s rental market, Morales said. Unlike in U.S. cities where there is a concentration of large landlords that manage a ton of units, in Mexico, it’s the opposite. Most landlords only own one property.
“It’s all mom and pops, like 97% of the market is mom and pops,” Morales said. “They really depend on this income. So they’re like, ‘Oh, who am I renting to? What happens if they don’t pay?’ There’s a lack of trust there. We say, we can help solve that or bridge that lack of trust with technology.”
The MoradaUno founding team knows the LatAm real estate market well. Morales said he moved to Mexico in early 2020, right before the pandemic, because he was working with proptech Loft, the LatAm marketplace for buying and selling real estate. He was supposed to help them expand into the country but when COVID-19 hit, those plans dried up.
The experience gave him a good foot in the door to LatAm’s real estate challenges and introduced him to Ines Gamboa Sorensen and Diego Llano, his now co-founders. MoradaUno was formed in 2020 and formally launched its product in 2021. MoradaUno has since worked with more than 4,500 brokers and helped close more than 20,000 rentals. Santiago added that the company is processing about 1,000 leases a month and wants to hit 3,000 leases a month by next summer.
The company just raised a $5.6 million Series A round to help with that. The round was co-led by fintech-focused Flourish Ventures and Cometa, a VC firm focused on backing companies building for Spanish-speaking populations. Clocktower Ventures, Picus Capital and Y Combinator also participated. Morales said the capital will be used to help with expansion.
The proptech startup market has been growing in LatAm. There are a few other startups looking to tackle rentals too. Aptitude is one that helps people find and apply for apartments online that is based in Bogota and has raised $7 million in venture funding. Houm is another that looks to bypass the region’s tough rental market by acting as a digital broker. Houm has raised more than $44 million in VC money.
MoradaUno is currently live in four cities in Mexico, but the company wants to boost that by adding six more cities in the near future. Morales added that underwriting tenants is just the beginning and in the future they’d like to be able to offer fintech services like advanced rent payments or even build an AI model for brokers.
“It’s really cool to be able to give access (to) people that otherwise would have not been able to rent,” Morales said. “Now you’re giving them an option. That’s very powerful and exciting. That kind of fuels us every day. And we’re also making the lives of thousands of real estate agents better because they have better tools and more efficient technology.”
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