La Haus is a residential marketplace platform founded in 2017. After years in the real estate industry, Co-Founder and CEO Jerónimo Uribe decided to spinoff the idea for La Haus from his brother’s real estate development company. Jerónimo sat down with me to chat about La Haus, Colombian entrepreneurship, and the startup ecosystem in Colombia.
Below are excerpts from our interview.
The interview has been edited for clarity.
What is La Haus?
La Haus is a residential platform that is transforming the industry in Latin America by leveraging technology, data, and service. We operate as a marketplace by connecting home supply with potential buyers. Beyond that, we provide services through specialized agents that control the experience from the initial search to transaction completion. We monetize our product through commission upon the completion of that transaction.
What market opportunity is there for La Haus?
The residential market in Latin America is broken. We’ve identified four structural traits in this area that make it difficult for individuals to buy and sell homes.
Price discovery is difficult: Publicly recorded prices are either not truly reflective of the transaction price, or they’re really hard to access by the consumer. Due to a lack of transparency, there are a lot of inefficiencies in price formation.
Lack of quality online search: The way listings are currently showcased is very deficient containing duplicates, uplistings, bad quality information, and lack of content.
The informality of service: We estimate that 60% of online requests for information on a property never get fulfilled.
Access to financing: In the U.S., mortgage penetration is around 70% GDP, but here in Latin America it hovers between 5.5% – 8.5% for most countries.
Why did you decide to go after this business?
I have personally been involved in real estate for a few years but on the development side of the business. My brother, Rodrigo Sanchez-Rios – Founder at La Haus, and I started a real estate development company in 2012. We moved to Medellín and experienced the home buying process firsthand. Through that experience and our knowledge in real estate development, we began incubating La Haus within that company by tinkering with some ideas to make the buying experience more seamless. In April 2017 we spun the company off and I began leading it with two engineers and two sales reps.
Since the company’s inception, how much funding have you received?
The first year was self-funded. In April 2018 we secured pre-seed funding of $1M through a round led by NFX Ventures. Later that year, Kaszek Ventures, a firm based out of Buenos Aires, led a seed round of $4.5M. Currently, we plan to raise another round with those two firms along with other U.S. venture capital firms.
I notice no Colombian firms were involved, why is that?
Colombian funding, in particular, is still very nascent. The ecosystem in the region as a whole has matured a lot. This has benefited Colombian startups because a venture firm in Argentina, for example, cannot confine itself only to the startups based there. I think that holds for every VC in the region. Over the last year and a half, we’ve seen the number of capital resources in the region more than double, and that’s not counting Softbank’s contributions.
What are some roadblocks in Colombia to being an entrepreneur and running a startup?
There are two that come to mind. First, I think any new entrepreneur will find it difficult to attract senior talent, both managerial or technical. This is because talent is still very risk-averse and unfamiliar with the equity rewards that can potentially come from a startup. Once a company begins to scale it’s easier, but at the early stage, it is difficult.
Secondly, given that the capital funding necessary to start a business is scarce in Colombia, a first-time founder must have the resources necessary to get acquainted with investors outside of the country and to test initial ideas or prototypes. At the end of the day if you can build a powerful product and gain traction then you will be able to get venture backing, but in the earlier stages of a company, a founder will need to find other means of capital, either through bootstrapping of friends and family.
How did La Haus navigate that stage?
We had already started generating positive cash flow from the real estate development business, so we used some of that money in the initial stages. Once we spun La Haus off from that, we raised money from friends and family. I have to be honest, in terms of connections I am a very privileged Colombian. Most of the founders I know who have received VC money in Colombia are privileged and have connections. That is in no way to say that there’s not tremendous merit in what my colleagues have achieved, but it is intended to shine a light on an obvious reality.
What do you think the opportunities in Colombia are around entrepreneurship?
Looking beyond specific government programs, I think the biggest opportunity revolves around the consolidation of the middle class. Within this segment of the population, there is a capacity for smartphone use, good connectivity, and consumption through mobile applications of web services. The most important policies the government can work on will have to involve pushing these trends forward to create new market opportunities.
Second, we need to work on the educational ecosystem that focuses on the number of technical people that graduate. We don’t need to have a five-year curriculum for an engineer to start coding. You can train an individual, such as a business analyst, in core statistical competencies in a twelve to eighteen-month program. An initiative like this would have a huge impact on the talent available to these emerging companies. It would also impact the students who would be able to enter the labor market earlier and have faster access to higher wages.
Are you currently hiring?
We are hiring technical individuals and we also have open marketing positions at this link.
What’s next for La Haus?
Our focus is on geographical expansion and having a presence in more Latin American cities. Currently, the process of selling and buying a home can be up to twelve months in Latin America, our end game is to reduce that by two-thirds and make the process seamless.
What’s next for Colombia?
I think we need to prove that this next small cohort of venture-backed technology companies can scale, become profitable, and run by themselves. That will be the final point of proof that companies started here cannot only scale and attract capital but can execute and build long-term sustainable value that turns into tangible wealth. This will not only attract more capital into the region but also remove the risk associated with these ventures that create a barrier to talent acquisition. I think that will be a definitive turning point for Colombia.
For more information on La Haus, please visit: https://www.lahaus.com/