Fynsa
Capitalizarme is a real estate investment marketplace, leader in the Chilean market, which seeks to become a Unicorn; that is, a startup with valuations of more than USD 1 billion.
This week, FYNSA launched its Venture Capital II Investment Fund, a fund structured -in principle- for 3 years that will invest in a significant participation of Capitalizarme, waiting for the valuation of the A Series. The initial objective is to support the startup in its closest goal: to expand to Mexico and then lead the Latin American market .
In 2014, commercial engineer Gabriel Cid founded this platform that, through advanced technology, selects the best investment opportunities in the market, and simplifies the process so that small investors can make a responsible investment. Currently, the company accumulates more than 5,000 investors and 10 million UF in real estate investments.
One of the co-founders of this Marketplace is Paolo Colonnello, current CPO (Chief Product Officer) and chairman of the board of the company. Passionate about technology and the growth of startups, he is also a mentor of Startup Chile, and has participated in other instances linked to the world of entrepreneurship and Venture Capital.
Cornershop, Levita Magnetics and Colektia are successful companies he has advised and invested in. For 18 years he was also the co-founder and CEO of Blue Company, a technology-focused startup lab that has worked with both the public and private sectors.
Colonnello likes to do things with a strategic and goal-oriented vision, totally "investor-centric", with a clear focus on ease and transparency. We talked to him about his vision regarding investments and entrepreneurship, the Proptech industry in general, and the present and future of Capitalizarme.
What elements do you look at when making your investment decisions?
Mainly in the team, because business changes and it is necessary to have a team that adapts, learns, and knows how to ask for help when it does not know how to solve problems and adapt. Second, the industry must be large enough to support different players with different solutions. Third, in the business model; how value is generated, who is willing to pay for that value and what that will look like in 5 or 10 years. Startups are driven by technology, which is what allows them to grow exponentially, and technology is driven by Moore's Law, which says that technology drops in cost by half every 18 months, so the question is: Will it be possible in 5 or 10 more years?
In terms of local entrepreneurship, how do you see the outlook for Chile and Latin America in the coming years?
I see it mature, we have an exit of 3.5 billion dollars in 5 years which is Cornershop, we have the NotCo with capital from Jeff Bezos, startups with series A, B and C with funds from Softbank, Sequoia or Tiger. We are already harvesting the years that Startup Chile and local funds and angels sowed. Today local startups have the real opportunity to make important exits and are not illusions as they were 5 or 10 years ago.
Capitalizarme operates under the slogan "Invest simple and fast" thanks to the fact that it is a Proptech company, that is, one that uses new technologies applied to the real estate sector. This is an industry whose popularity, according to Colonnello, is on the rise.
Why has Proptech become an attractive industry for investors?
It is one of the few investments that allow an ordinary investor to leverage himself, which is very attractive. On the other hand, it allows to take refuge from inflation and produces both cash flow (in the case of rental income) and capital gains.
How big is the Proptech market and how advanced is it?
The real estate industry is gigantic, over 300 trillion dollars in the world and about 20 trillion in Latin America. About 15-20% of that is for investment. Proptech is small in comparison, but growing fast and disruptive, quickly rendering traditional players obsolete. It is one of the fastest growing industries and opportunities today.
How scalable are these products to the rest of Latin America and the world?
Very much so. The real estate industry, especially investment real estate, has similar logics everywhere. Emerging markets are where we see more opportunities, due to the lack of information and the expected growth in capital gains, compared to consolidated markets. But the logic of buying, mortgaging, leasing, or selling is similar everywhere.
It is in this context that Capitalizarme has found unusual success. Since 2019, the real estate investment Marketplace has sold more than 4,200 assets, and accumulated US$ 520 million in GMV and US$ 24 million in revenue.
How did the idea of creating Capitalize Me come about?
Capitalizarme was founded by my partner Gabriel Cid by boostraping (starting only with the means at hand, with little or no capital) and selling investment opportunities given by real estate companies to his friends and acquaintances. Little by little he grew and a couple of years ago he realized that the opportunity was bigger than he was seeing, and with the pandemic he started selling apartments online. That's when he invited me and Luis Fuentes to join the project and turn Capitalizarme into a multi active and multi country Marketplace.
What advantage does it have over the traditional market?
The traditional market is not very technological. We take friction out of the process and turn a property (apartment, warehouse, land, etc.) into an investment asset, providing concrete information on returns, risks, mortgages, leases, among others. The traditional market is also fully focused on housing, not on investment, and that is where we stand out, and very much so.
What are your next goals?
Today we are focused on Mexico, opening a new country is a challenge, we have to understand what things need to be adapted, what new opportunities there are and how to take advantage of them. We can only achieve that in action; being there with the customers, understanding their needs and their way of thinking. We are also building a range of financial services such as secured leasing, paying the foot of mortgage loans in installments, and prompt payment of commissions for brokers and brokers. This is led by Aleix Radmilovic, who comes from managing $6 trillion in real estate assets in the institutional world and is really a genius at building our Fintech layer.
Tomás Latorre, AGF Team
