The Brazilian housing market is on the up-and-up, with prices expected to raise 5-10% this year alone. The construction sector is booming, as is the mortgage industry (though some concerns have been expressed regarding high interest rates and a possible mortgage bubble burst similar to what happened in the U.S. just a few years ago). With the middle class making up 74% of the population and average Brazilian incomes rising at a rate of 8% annually, it’s natural that many citizens would be turning their attention to home buying as well as home construction.
Brazilian startup KMA2 has emerged to work within the growing home construction industry in the country in devising ways to influence the market and develop related solutions. The company has undergone two years of incubation with Cietec (Center for Innovation, Technology and Entrepreneurship). On June 25th, KMA2 launched Arquitecasa, a platform that features a construction cost simulator as well as related content in building and design.
Arquitecasa is set up as a one stop shop that provides information and pricing simulation regarding materials, labor, architecture and design from throughout Brazil. It provides referrals to professionals and has also established partnerships with credit organizations to help users define questions of loans and financing.
The data on Arquitecasa regarding quantities, costs and labor is free of charge for users. Revenue is generated through the sale of information and data to retailers and construction professionals. Currently, the platform has 20,000 unique visits a month, and the KMA2 team is working to increase that number. They are also developing strategic distribution channels for retailers.
KMA2 was founded by architect Marcelo Brigido and work safety consultant Carolina Ortiz. Brigido spoke with us about the company’s new platform, which, for the time being, seems to be the only one of its kind in Brazil.
Emily Stewart: You’ve undergone two years of incubation with Cietec. What has your experience been with incubation?
Marcelo Brigido: The incubation experience has been important, especially for the daily contact that I have with other entrepreneurs who are currently having a similar experience or are just a few steps ahead. This contact has led to the creation of a group within the Cietec, Oooos Incubados (The Incubated), that meets weekly to share experiences and questions, talk about business and receive feedback. Arquitecasa’s business model grew from the knowledge shared in the group.
ES: There is a lot going on in the Brazilian real estate market online right now, and platforms like VivaReal, Airbnb and Urbanizo have popped up surrounding it. What are your interactions with these companies? What is it about the Brazilian real estate market right now that is so attractive?
MB: The companies mentioned work in the segment produced by a construction company, focusing on a product that is ready or in production. Arquitecasa focuses on the segment of self-managed residential construction - a model very strong in Latin American building culture in which the customer manages the work after hiring an architect to design the project and the contractor to build. The information we deliver to our users is important in the planning phase, prior to the work.
Regarding the Brazilian market, I believe that our historic housing shortage, increased supply of mortgages, the growth in real incomes of workers and low unemployment rates have boosted the sector, making it so attractive.
ES: Your website also places emphasis on sustainable development. Why is this important to you? In Latin America and Brazil, where the economy is growing but developing, how viable is sustainability in construction considering the often higher cost of environmentally-friendly materials?
MB: We can no longer treat the theme of sustainability as an ancillary issue, and we believe we can play an important role in educating consumers. Simple measures taken on a large scale mean a huge impact, and positive attitudes have the same effect.
Take, for example, waste disposal. If people begin to select the best companies to collect trash, cities will have higher earnings than those generated by the actions of large corporate groups. It’s essentially like the work of a lot of ants, but the result can be powerful. I don’t believe in huge changes in attitude, but in small changes, which together generate great impact. We also believe we can influence our users and demonstrate that large investments can represent big savings in the long term, with significant environmental gains. We understand that it is not just viable, but also strategic, to think about sustainability in construction.
ES: What are your plans from here on out? Are your sights set only on Brazil?
MB: We are focused on executing and launching the product on the market and gaining scale. Companies with whom we have spoken are already giving us feedback about possible improvements, and the roadmap includes the development of versions for other markets in Latin America – which is possible because of the similarities across construction cultures. Our strategy provides that entry into other Latin American markets will be made with local partners. So, in that way, we’ll have to evolve technologically to attend to all these markets.
Arquitecasa will likely benefit significantly from the Brazilian housing boom, which is predicted to last until 2017. The question is what will happen if and when the market bubble bursts – something many suggest is imminent. Perhaps this will be where the greater Latin American strategy comes into play.