LatAm: Mexican proptech startup Casai has completed its anticipated merger with São Paulo-based residential apartment company Nomah.
In the process, the combined company has received an undisclosed investment from the companies’ current investors, including Andreessen Horowitz, Monashees and Loft Group.
It comes a matter of weeks after Bloomberg Línea reported that Casai, which curates boutique travel apartments in desirable neighbourhoods across Latin America for short-term stays, had made around 60 employees in Brazil and 20 team members in Mexico redundant on 18 July.
Real estate platform Loft, which acquired Nomah in 2020, will have a stake in the combined company.
Under the rules of the merger, both firms will keep their brands, while Nico Barawid, who co-founded Casai in 2019 with Maricarmen Herrerías Salazar, will take over as CEO of the combined company. Nomad founder and CEO, Thomas Guz, has been named as president, although it is possible that he could depart in six months’ time.
As two of the largest companies in Latin America in the segment, the pair are merging to operate around 3,000 housing units in Brazil and Mexico, reaching up to 200,000 guests in the process.
Barawid told exame.com: “Hospitality is one of the biggest factors contributing to the economic development of the region. Over the past few years, more and more people have discovered Latin America’s culture, cuisine, landscapes and history.
“The merger is a giant step forward for the hotel industry in the region,” he added.
Meanwhile, Nomah partners with developers to manage residential buildings and transform them into hotel-standard accommodation that can be rented out on a short-term or flexible rental basis.
Looking ahead, the combined company expects to use the fresh capital to expand further into Latin America, including in Colombia and Chile in the coming months, and stock options will be offered to all employees.
Guz said: “We want all employees to feel like they own the business, with the aim of building a company that transforms the way people stay and invest in the real estate market. This is just the beginning.”
It was previously reported that Barawid had spoken to the entire Casai team on 24 June, telling employees that the startup was running out of money and recommending that people search for new jobs. According to those affected by the job cuts, former employees were set to receive proposals for termination to be paid in six instalments over several months, although there were conflicting reports on the matter at the time.
Further claims alleged that some former Casai employees had threatened to sue the company due to the first instalment amounting to 40 – 50 per cent of what they say they were owed, although had been warned against it by lawyers as the startup could disappear “in a few months”. While employee benefits began to be cut, it was alleged that suppliers were not being paid not in deposits, but with credit cards from Brazilian fintech unicorn Clara, which recently laid off ten per cent of its own staff.
After raising $48 million in a record Series A raise for a Mexican company in October 2020, Casai sought an extension to the round earlier this year but it failed to materialise until venture syndicate Weclickd invested an undisclosed amount in the startup in June.
Last year, Casai announced planned further investment in its LatAm business and expansion into Brazil, including the launch of domestic product Getaways by Casai, and the acquisitions of the Brazilian operations of Danish serviced apartment firm Q Apartments, Florianópolis-based rental startup Roomin, and access control company LoopKey [back in April].
Andreessen Horowitz [a16z], which led Casai’s Series A round in 2020 alongside TriplePoint Capital, Kaszek Ventures, Monashees Capital, Global Founders Capital, Liquid 2 Ventures, DST Global and other founders, gave Casai six months of runway with a $5 million investment, alleges Bloomberg Línea.
Translated as “smart home”, each intelligent Casai unit offers keyless check-in, Chromecast-powered TVs, and high-speed wifi that can all be controlled through the company’s app. Casai also uses its own proprietary technology and smart hardware hub called Butler, which integrates with smart lock technology through the partnership with LoopKey.
Confidence in extending the Series A round may have waned as investors looked on at lodging companies in the United States that have recently announced layoffs, such as Sonder and AvantStay.
The former closed a SPAC merger with Gores Metropoulos II in mid-January but has since seen its share price drop from a high of $10.80 a share in February to around the $1 mark now, and announced it was laying off 21 per cent of its corporate team and seven per cent of its frontline staff in June.
