Benjamín Labra, Houm | Using Technology to Transform Renting and Buying Property [Ep. 64]

The audio and video are in Spanish. These notes are a translation.

Renting an apartment in Latin America is a headache. There are many factors that affect both the tenant and the property owner. That is why, to talk about the problems of the real estate sector and how the proptech industry can solve them, we invited Benjamín Labra, CEO and cofounder of Houm, an end-to-end technology solution that lets property owners rent and sell their properties up to 10 times faster.

Benjamín told us his diagnosis of the proptech sector in Latin America and how technology can generate significant efficiencies in this sector. We also talked about his recommendations on raising capital and international expansion for founders in small countries such as Chile or Peru.

To date, Houm has raised more than USD $45 million from international venture capital funds such as Goodwater Capital and Fifth Wall, and Latin American funds such as Alaya Capital, Fen Ventures, and Magma Partners.

Thanks to Hatim Khety of Goodwater Capital, Claudio Barahona of Alaya Capital, Daniel Cossío of Village Capital, and Fabio Muniz of Awari for the excellent question suggestions.

What You Can Learn Today

• Overview of the proptech sector in Latin America
• How to validate a business model
• How to expand to other countries in the region

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Youtube Timestamps*

About Benjamín and Houm

• [1:38] - How did Benjamín arrive in the world of startups?

  • He was always closely connected to the business and real estate world
  • He met his partner Nicolás at Columbia University
  • When he returned to Chile, he created a real estate rental fund together with Nicolás
  • In 2018 he started Houm

• [2:37] - What is Houm?

  • A platform that helps owners rent out or sell their property
  • With Houm, the process is 10 times faster than usual
  • They continuously support tenants and owners

Diagnosis of the Proptech Sector

• [3:35] - Proptech landscape in Latin America

  • The real estate industry is the largest in the world
  • It is a very fragmented and poorly served sector
  • Houm’s differentiator is long-term support for its clients

• [7:26] - The advantage of supporting owners to rent and sell their homes

  • Real estate agents have always focused on renting and selling
  • Clients often change their minds about what they plan to do with their properties

• [9:08] - How does Houm operate?

  • Its technology is aimed at speed in its processes
  • Houm’s team opens the doors of hundreds of apartments every day
  • Efficiency in the processes creates a great experience for users

• [12:05] - Access to housing for underserved segments of the population

  • Proptech startups have the mission of democratizing access to housing
  • Houm donates 1% of its profits so that families in LatAm can buy or rent a home

Validation of Houm’s Business Model

• [14:52] - Houm’s model validation process

  • Benjamín’s experience in the sector
  • Comparison with real estate franchises in Latin America
  • Analysis of economic cycles and their influence on the real estate sector

• [17:46] - Houm’s Minimum Viable Product

  • Strong acceptance from clients
  • They did not ask clients for guarantees in order to rent
  • They guaranteed the rent payment to the tenants
  • Validation was the starting point for Houm to begin growing

• [19:37] - Key variables for validating the product’s success

  • Real estate agent visits per day
  • Time and money savings for clients

International Expansion and Raising Capital from “Small Markets”

• [21:17] - Lessons from expanding to other countries in Latin America

  • Benjamín would have preferred to launch Houm in Mexico and Chile at the same time
  • Coming from a small country forges a growth mindset
  • The experience of expanding makes it easier to open new markets
  • You have to know when, how, and why to open operations in a new city

• [25:13] - How Houm’s recruiting strategy has changed

  • Talent is the most valuable asset of any company
  • Instilling the culture in new talent is a complex process
  • Houm’s longest-serving employees train the talent in the new cities where they start operations

• [27:33] - Factors to analyze before going international

  • You have to expand strategically so you do not die trying
  • Understanding clients and their needs is essential
  • Timing is essential, and now is a great moment to start a company

• [30:22] - Is being in a small market a disadvantage for raising capital?

  • To reduce risk, funds invest in startups from large markets
  • Betting on a small market creates uncertainty for investors
  • Participating in Y Combinator made it easier for Benjamín to connect with funds

• [32:58] - Recommendations for raising capital

  • Research the funds and the investors very well
  • Identify the fit with investors
  • Understand that an investment is not only money, but a long-term relationship
  • Communicate the future vision, not the startup’s current state

Tweet Round

• [36:42] -
  • Recommended book: De Cero a Uno, by Peter Thiel
  • Changes in Latin America’s startup ecosystem: that, as Latin Americans, we believe we are capable of doing whatever we want to do
  • Founder to interview: Jonathan Lewy of Investo

Episode Mentions

You can find Benjamín on LinkedIn and Twitter

Recommended book: De Cero a Uno, by Peter Thiel

Founder to interview: Jonathan Lewy of Investo

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