Lhoopa raises $80M to cut home backlog in SEA

PROPERTY-TECHNOLOGY startup Lhoopa has raised $80 million (P4.7 billion) to spur affordable housing projects in the Philippines, the company said in an e-mailed statement.

This is the biggest funding round by a startup in the Philippines to date, and one of the largest in Southeast Asia (SEA) this year, the startup said, citing CB Insights data.

Lhoopa, which leverages data and technology in its large-scale development of affordable homes in the Philippines, said the new capital would let it expand in the Philippines and to other emerging markets, strengthen its technology capabilities and launch its green housing options.

“Additionally, the company will hire more executives, senior managers and product developers,” it added.

Lhoopa, founded in 2018, has sold more than 2,500 affordable houses in more than 58 cities in the Philippines. It has expanded its team from 30 to 95 employees and aims to provide over 15,000 affordable homes in the next three years.

Of the funding, $20 million was in the form of equity, which was co-led by the World Bank’s International Finance Corp. and Wavemaker Partners, with participation from Pavilion Capital, 10X Group, Concentric Equity Partners, UAE-based Mirath Investments and US-based NataRock Partners Fund.

The equity round facilitated the commitment of $60 million worth of debt facilities for Lhoopa from development finance institutions like the Asian Development Bank and United States International Development Finance Corp., and Lendable, which provides debt to fintech firms in emerging markets.

“It is uncommon for startups to raise this much debt at an early stage,” Lhoopa said. “Achieving a 3:1 debt-to-equity ratio from these respected institutions is also notable. This reflects the strength of Lhoopa’s business and the social impact it provides.”

The funding marks a pivotal moment for Lhoopa as it scales its operations to meet the growing demand for affordable housing in Southeast Asia, Lhoopa founder Marc-Olivier Caillot said in the statement.

“Our dream is to create a much-needed paradigm shift in real estate. Toward this end, as a proptech, our unique model of leveraging technology and local partnerships allows us to deliver quality,  affordable homes quickly and efficiently,” he added.

Paul Santos, managing partner at Wavemaker Partners, said affordable housing is not typically seen as a venture play, “but we believe Lhoopa is solving a long-standing problem that will only worsen unless it is addressed.”

The Philippines has an affordable housing backlog of more than 6.5 million units and is expected to reach 22 million by 2040.

“Lhoopa is demonstrating that with boldness, innovation and differentiated execution, affordable housing can be both profitable and impactful,” he said. — NPA