Grupo Zap to bring iBuyer model to Brazil's real estate market

Grupoa Zap is looking to enter a billion-dollar opportunity by bringing the instant home buyer (iBuyer) model to Brazil's real estate industry. The online firm has plans to double its workforce and optimize data analytics to aid in the new iBuyer business model.

With Grupo Globo, one of Latin America's largest media conglomerates as a majority shareholder and the likes of Monashees and Kaszek Ventures as backers, Zap owns the two largest real estate marketplaces in Brazil and provides a range of data-driven services to the industry.

Under the i-buyer model, online firms assess and purchase properties from owners, which are then renovated and put back into the market. Sector leaders include US firms Open Door and Zillow, the latter being the largest operator with a three-to five-year revenue target of a whopping $22 billion.

By introducing the approach in Brazil, Zap aims to shake up the local real estate market. The firm's own data suggests transactions in the country have shrunk 30-40 percent since the last peak in 2014, with property owners currently waiting 468 days on average to sell.

The company will invest 100 million reais ($25 million) in about 200 property acquisitions in large urban centers in Brazil over the next 12 months. Once its i-buyer business is operating at scale, Zap hopes to claim a 10 percent marketshare of the country's real estate business, currently estimated at about 200 billion reais ($50 billion) a year.

As well as bringing more liquidity to the currently stagnant real estate business in Brazil, Zap hopes the i-buyer model will help address the complexity and lack of transparency associated to such transactions.

"While markets such as the US have [real estate transactional data] readily available, that information is limited and fragmented in Brazil. This creates difficulties for buyers and sellers around defining the right price, so negotiations are often long, drawn out processes," says Chief Executive at Grupo Zap, Lucas Vargas.

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