Colombian Proptech, Habi’s, raises $100 Million Series B

Habi, a real estate startup digitizing home buying and selling for Colombia’s middle class, announces it has raised $100 million of equity in a Series B funding, marking the largest round raised by a female CEO across Latin America.

In Colombia, a country where few online listing services exist and the most common way of selling your home is by hanging a phone number and a for sale sign in your window, real estate transactions are incredibly opaque. The Bogotá-based iBuyer startup aims to change that.

Habi also buys, renovates and sells homes, generating additional revenue. Its centralized database—built using data from real estate, banking and government partners—drives its automated pricing model, offering transaction services to home buyers and sellers.

The startup also allows homeowners to estimate the value of their homes. Some 100,000 Colombians have received pricing from Habi between home offers and the company’s free online valuation, says cofounder and CEO Brynne McNulty Rojas. Between May, 2020 and May, 2021, transaction volume grew 40% month-over-month on average.

Wednesday’s funding round—led by the SoftBank Latin America Fund alongside previous investors including Inspired Capital, Tiger Global, Homebrew and 8VC—also represents the second largest Series B raised by a startup in Colombia, following delivery app Rappi’s $185 million raise in 2018, according to Pitchbook. Habi declined to disclose its valuation.

According to an analysis by real estate agency Galería Inmobiliaria, new home sales in Colombia’s five largest cities—Bogotá, Medellín, Cali, Barranquilla and Bucaramanga—were up 31% in the first quarter of 2021 compared to a year prior. Currently, Habi operates in four of those markets: Bogotá, Medellín, Barranquilla and Cali. With the equity raised, Rojas said the company is looking to expand its footprint to Mexico, starting out in Mexico City. Habi also hopes to continue to build its team, which has grown nine times over the last year to 300 employees.

Habi’s proprietary data platform holds over 16 million unique data points, and synthesizes everything from location to property size to number of parking spots to whether the building has an elevator. This is a selling point in a country where MLSs—which, in the U.S., are private databases created, maintained and paid for by real estate professionals to help their clients buy and sell property—don’t exist, says Clelia Warburg Peters, president of Warburg Realty and venture partner at Bain Capital Ventures.

“In an environment like Brazil or Colombia where there isn’t an MLS, [companies like Habi and Loft] have the possibility of coming into the market and creating a one-stop experience where they could own the buyer experience, the seller experience, and the search experience by becoming the de facto MLS,” she says. (Forbes)

Chilean equities trading at deep discounts versus emerging market peers

In Chile, listed equities are trading near their biggest discount to emerging-market peers on record in terms of forward price-to-earnings after almost two years of political turmoil — even as the economy rebounds.

Gross domestic product will jump as much as 9.5% this year, according to the central bank, the fastest pace since 1992. Copper, which accounts for more than half of Chilean exports, also leaped to a record last month, before paring gains in June.

According to Bloomberg, it will take a lot to convince some investors to come back into the market. The biggest social unrest in a generation, the rewriting of the constitution amid the ascent of a hard-line left-wing coalition and the undermining of the private pension system have all dented confidence. Now, polls showing a Communist as a leading contender in November’s presidential elections may keep many investors on the sidelines, regardless of bargain-basement valuations.

The S&P IPSA stock index is just off its lowest valuations on record when compared with the MSCI Inc.’s benchmark for emerging market equities. Stocks are trading at a 16% discount to developing-world peers, according to relative valuation data compiled by Bloomberg.

Chile had traded at a mark-up to its emerging-economy peers for at least 13 years through 2019 as free-market policies, sustained economic growth and a stable political environment all attracted investors.

That started to change in October 2019 when a wave of violent civil unrest saw hundreds of shops looted across the country and President Sebastian Pinera called out the army to restore order. The drawing up of a new constitution was part of a political accord to end the protests, though the demonstrations didn’t stop until the pandemic forced much of the country into lockdown last year.

Source: S&P IPSA index, MSCI Inc.

Equity valuations took their latest plunge in May after the ruling right-wing coalition suffered a crushing defeat in the election for the constituent assembly, placing the writing of the new charter firmly in the hands of the left wing.

“Investors need to decide whether it’s cheap for a reason,” said Morgan Harting, a senior portfolio manager at AllianceBernstein in New York. “Some investors seem to want to wait and see and may not bid the IPSA back up until they know for sure how much political change is in store.”

Others may not want to wait.

“For an investor with the conviction that the constitutional reform process will be well-received by the market and, ideally, a crystal ball saying copper prices are poised to retrace their recent highs, this would be a great time to lean into the Chilean market,” Harting said. (Bloomberg)

Source: MSCI Inc., S&P IPSA indexes

Latin America’s 1st Bitcoin ETF has launched

Argentina reaches agreement with Paris Club

Economy Minister Martín Guzmán announced that Argentina reached an agreement with the Paris Club of creditor countries to avoid defaulting on a loan repayment in July and unlocking temporary relief of some $2 billion.

“We have reached an understanding with the Paris Club” to avoid defaulting on July 31, when a grace period was to expire for the repayment of a final tranche of debt of about $2.4 billion, Guzmán told reporters in the capital. “This new time horizon gives us more security.”

Instead of $2.4 billion, Argentina will repay $430 million in the short term in a number of payments, followed by the rest later, said the minister. The amount owed was the last repayment on debt renegotiated with the Paris Club in 2014.

“Paying that amount would have been a blow to international reserves, it would have generated more exchange rate instability and more macroeconomic instability. On the other hand, a default, a situation of default, would also have been a blow to the economy,” said the minister.

Guzmán pointed out that the new payment dates were not yet fully defined, though it is likely that the first payment would take place on July 31, with the second in 2022.

“Argentina will have until March 31, 2022 to aim for a more permanent restructuring with the Paris Club and will continue its efforts to reach an understanding with the International Monetary Fund,” the minister said.

Argentina will continue negotiations for repayment of some $45 billion it owes the International Monetary Fund. In-person talks with IMF representatives will continue on the sidelines of a G20 summit in Italy in July, said Guzmán.

The Paris Club developments mean that Argentina is now committed to reaching a deal with the IMF by the end of March 2022, as it has agreed to treat all other external creditors in a comparable manner, said Paris Club General Secretary Schwan Badirou-Gafari this week, responding to an enquiry from Bloomberg.

Argentina entered the debt’s 60-day grace period to reach an understanding with the informal group of creditors after requesting more time to work out an arrangement. Guzmán said Tuesday, however, that the March 2022 deadline with the Paris Club won’t have any impact on the timeline for IMF negotiations.

“Our goal is to have a good agreement, the sooner the better, but the priority is that it be good,” said Guzmán, who insisted the IMF shared some responsibility for Argentina’s indebtedness.

President Alberto Fernández visited a number of European countries in May to drum up support for a delay in its debt repayments to the Paris Club and IMF. In March, he said the debt in its current form was “unpayable.”

Argentina has been in recession since 2018, a situation worsened by the coronavirus epidemic. In 2020, GDP declined nearly 10% and poverty now affects about 42% of the population.

Last year, the country restructured some $66 billion in debt with private bondholders.

Brazil making progress towards cannabis cultivation

Latin America’s largest economy recently moved one step closer to allowing domestic medical cannabis and industrial hemp cultivation.

On June 8, 2021, the Brazilian Chamber of Deputies’ Special Commission approved PL 399/2015, which would legalize the domestic cultivation of cannabis for medicinal, veterinary, scientific, and industrial purposes. This commission of the lower house of the National Congress of Brazil narrowly approved this legislation, which will also have to pass in the Federal Senate and be signed by President Jair Bolsonaro to become law. Bolsonaro has previously indicated that he may veto this legislation should it pass both houses.

Brazil’s National Health Surveillance Agency (ANVISA) already allows some medicines made from cannabis to be imported. But the price of importing these medicines is cost-prohibitive for many of patients who would benefit from their use. By allowing domestic cannabis cultivation by companies, patient associations, and non-governmental organizations, PL 399/2015 should lead to lower prices for Brazil’s cannabis patients if it becomes law.

Source: The latam cannabis report, 2018.

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