Sao Paulo-based real estate startup QuintoAndar has raised a $250 million Series D in a round that is considered massive by U.S. standards but is positively gargantuan in Brazil. The round takes the company “to unicorn status,” according to CEO Gabriel Braga, although he would not disclose its exact valuation.

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SoftBank Group International led the round, which also included participation from another new investor Dragoneer as well as existing backers General Atlantic and Kaszek Ventures. The financing brings the six-year-old company’s total raised to over $335 million, according to its Crunchbase profile, and comes just nine months after its $70 million Series C.

“QuintoAndar makes it easier for people to quickly find homes and for landlords to better manage their properties,” said Marcelo Claure, CEO of SoftBank Group International, in a prepared statement. “The company is at the center of a global transformation of the real estate industry.”

QuintoAndar describes itself as an “end-to-end solution for long-term rentals” that, among other things, connects potential tenants to landlords and vice versa. It’s seen impressive growth in recent years. I spoke with CEO Gabriel Braga by telephone and he told me that the company has increased the number of rentals it helped facilitate by five times year-over-year. QuintoAndar also saw its revenue surge by more than three times last year, according to Braga. (It keeps the first month’s rent and a percentage fee of the transactions it helps facilitate.) The company has also more than tripled its number of employees to 1,000 compared to about 300-350 a year ago. On average, it has been closing over 4,500 new contracts per month.

Ultimately, its goal is to provide “a seamless experience for tenants that removes the need for a guarantor, large security deposit, or rental insurance while also providing landlords the best liquidity in the market and fully guaranteed rent.”

History

CEO Braga and André Penha, CTO, came up with the idea for QuintoAndar after getting their MBAs at Stanford University. As many startups do, the company was founded out of Braga’s personal “nightmare” of an experience in renting an apartment in Sao Paulo.

The search process was difficult as there was not enough information available online and renters are forced to provide a guarantor, or co-signer, from the same city or pay rent insurance, which Braga described as “very expensive.”

“Overall, I felt it was a very inefficient and fragmented process with no transparency or tech,” Braga told Crunchbase News. “There was all this friction and high cost involved, just real tangible problems to solve.”

The concept for QuintoAndar (which can be translated literally to “Fifth Floor” in Portuguese) was born.

“Little by little, we created a platform that consolidated supply and inventory in a uniform way,” Braga said.

The company took the search phase online for the first time, according to Braga. It also eliminated the need for tenants to provide a guarantor, thereby saving them money. On the other side, QuintoAndar also works to help protect the landlord with the guarantee that they will get their rent “on time every month,” Braga said.

Investors

As we previously reported, Braga acknowledges that some U.S.-based investors initially liked the premise behind the company but were intimidated by the complexities of investing in Brazil, such as the exchange rate risk and a turbulent political, and uncertain economic, environment.

“Although the company was doing well in terms of traction, it was hard at first to convince investors,” Braga said.

New York-based General Atlantic led its Series C and, according to Braga, “was committed to Latin America and not afraid of Brazilian risks. They knew firsthand the importance and relevance of the problems we were solving.”

Nicolas Szekasy, co-founder and managing partner of Argentina-based Kaszek Ventures, notes that his firm has invested in QuintoAndar since its $7 million Series A in 2016.

“We fell in love with the founding team first and their vision of significantly revolutionizing the way Brazilians rented properties,” Szekasy said. “It could take more than a month for someone that was looking at a property to get a transaction closed. Now it can be done in a day.”

Szekasy said Kaszek, which recently closed on $600 million between two funds, is “super excited” by QuintoAndar’s trajectory, execution, strategic vision and “how they’ve been attracting talent in the different areas of the company.”

Certainly, the fact that SoftBank led this round is notable. We reported earlier this year SoftBank Group had unveiled plans for a $5 billion SoftBank Innovation Fund, or what it described as “the largest-ever technology fund focused exclusively on the fast-growing Latin American market.” The news was validation that investors are starting to take the region more seriously.

Plans

Last year, QuintoAndar began expanding its offering to more regions in Brazil, and is now in 25 cities and nine metro areas in the country. With its new capital, the company plans to continue growing there and also to start expanding outside of its home country.

“We’re doing our homework to understand the pain points and where we can make the biggest difference,” Braga told me.

QuintoAndar also recently began partnering with Brazil’s leading brick-and-mortar real estate agencies. Currently, 15 brokers work with company “to provide landlords with personal face-to-face support.”

It, of course, plans to continue hiring as well and continue building out its home improvement segment of its business.

“Our rentals are going faster at a better price, and through an even more seamless experience for tenants,” Braga said.

Brazil has been the largest recipient of venture funding in an increasingly hot investment climate in Latin America. Earlier this year, we reported that venture funding in the region’s largest country exploded in 2018 to $1.3 billion, representing nearly two-thirds of all venture money raised in Latin America as a whole last year, according to LAVCA, the Association for Private Capital Investment in Latin America. That’s 52 percent more than the $859 million invested Brazil in 2017, and a staggering 369 percent increase from the $279 million raised in 2016, as you can see in the chart below: