MoradaUno wants to make it easier to rent apartments in Mexico

Renting in Latin America is restrictive. Most landlords require three months’ rent as a deposit and a guarantor who owns a property in the same city to co-sign the lease. Santiago Morales, co-founder and CEO of proptech company MoradaUno, said this dynamic makes 40% of potential tenants unacceptable. His company wants to attract more tenants to rent by underwriting their risk.

“This is the biggest problem in the industry today,” Morales told TechCrunch. “People can’t rent where they want, or they have to rent with roommates, with roommates, or they can’t rent at all. So we said, let’s fix this. Let’s solve this problem.”

The result was MoradaUnoa Mexico City-based company that aims to proactively reduce tenant risk for landlords. The company works with real estate brokers to screen and qualify potential tenants and agree to pick up the rent if tenants stop paying. Morales said the company’s thorough vetting process, which includes background checks and income verification, weeds out many bad actors from the start. MoradaUno also provides additional additional brokerage services such as legal and home insurance.

The company decided to target brokers rather than landlords themselves because of the fragmented nature of Mexico’s rental property market, Morales said. Unlike US cities, where large landlords are concentrated and manage a huge number of apartments, in Mexico the opposite is true. Most landlords only own one property.

“It’s all mom and pop, about 97% of the market is mom and pop,” Morales said. “They really depend on that income. And they were like, “Oh, who do I rent to?” What happens if they don’t pay? There’s mistrust there. We’re saying we can help solve this problem or overcome the lack of trust through technology.”

MoradaUno’s founding team knows the Latin American real estate market well. Morales said he moved to Mexico in early 2020, right before the pandemic, because he was working with proptech Loft, a Latin American marketplace for buying and selling real estate. He was supposed to help them expand their operations in the country, but when Covid-19 hit, those plans came to a screeching halt.

This experience gave him a good insight into real estate issues in Latin America and introduced him to Ines Gamboa Sorensen and Diego Llano, his current co-founders. MoradaUno was founded in 2020 and officially launched its product in 2021. Since then, MoradaUno has worked with over 4,500 brokers and helped close over 20,000 rental transactions. Santiago added that the company processes about 1,000 leases per month and wants to reach 3,000 leases per month by next summer.

The company just raised a $5.6 million Series A round to help with that effort. The round was co-led by Flourish Ventures, a fintech firm, and Cometa, a venture capital firm focused on backing companies built for the Hispanic population. Clocktower Ventures, Picus Capital and Y Combinator also participated. Morales said the capital will be used for expansion.

The tech startup market is growing in Latin America. There are several other startups that are also looking to get into the rental business. Aptuno is a company that helps people find and apply for apartments online. It is based in Bogota and has raised $7 million in venture funding. Hum This is another project that is trying to bypass the tough rental market in the region by acting as a digital broker. Home has raised more than $44 million in venture capital funding.

MoradaUno currently operates in four cities in Mexico, but the company wants to increase that number by adding six more cities in the near future. Morales added that renters insurance is just the beginning, and in the future they would like to be able to offer fintech services such as pre-rent payments, or even create an artificial intelligence model for brokers.

“It’s really cool to be able to provide access to people who might not otherwise be able to rent,” Morales said. “Now you give them an opportunity. It’s very powerful and exciting. It fuels us every day. And we also make the lives of thousands of real estate agents better because they have better tools and more efficient technology.”