Brian Requarth, Co-Founder and CEO of online real estate marketplace VivaReal, spoke with LAVCA about his relationship with investors and how economic changes in Brazil are impacting their operations.

LAVCA: Please summarize your business. Where are you headquartered and where else do you have operations? Why is Brazil an ideal market for VivaReal and what makes your offering unique? How does VivaReal make a profit?

Requarth: VivaReal is an online real estate marketplace connecting buyers and sellers. Our customers are real estate agents, brokers and homebuilders. They pay us an advertising fee and we generate leads to help them sell more. Every year real estate companies invest ~$2bn USD in advertising in Brazil (mostly in offline channels).

Our headquarters are in São Paulo, Brazil, but we have offices around the country in 14 major cities. We started in several countries in Latin America, but we narrowed our focus to Brazil after we realized that it is by far the largest opportunity. VivaReal has the largest inventory of properties in Brazil with over 2 million listings.

LAVCA: What is your background and the background of VivaReal’s other co-founders? How has this been a benefit for creating the company?

Requarth: I grew up in California. I have always been an entrepreneur. I started many micro businesses as a kid. From a young age I realized I wanted to run my own business. My co-founders have a balanced background. Thomas Floracks (Germany), VP of Product, has a strong technical and performance marketing background. I think that the product vision should come from a co-founder. Diego Simon (Brazil), VP of New Business. Diego has worn a lot of hats over the years and I think that his background as a general manager allowed him to adapt to all stages of the business. Today, he is incubating and leading a new complementary (startup) project inside VivaReal.

LAVCA: How does mobile play a role and how to do you engage with customers via this channel? How important is mobile for VivaReal?

Requarth: Mobile plays a critical role in our growth plan. Last year approximately 5% of our traffic was mobile; today that number is over 20%. I anticipate continued growth in mobile and we are heavily investing to build the best mobile experience. Over the last year, we have seen a massive shift to mobile. Real estate is inherently local so mobile makes a lot of sense for our business.

LAVCA: How have the recent economic changes in the country been a challenge for VivaReal? How have they been an opportunity?

Requarth: The economy has slowed a bit in Brazil. The housing market is also slowing down. It may seem counterintuitive, but this actually helps our business. Over the last 5 years during the housing boom, real estate companies weren’t analytical about where they invested their marketing dollars. When everything is selling, you don’t really spend a lot of energy understanding what works and what doesn’t. Since the market has slowed, our customers are analyzing the ROI on their campaigns. This is good for us because we generate excellent returns. The result is that they increase their investment on VivaReal.

LAVCA: What financing have you received thus far? From whom? How have you/do you plan to use the financing? In general, how do you plan to grow the business?

Requarth: We have raised ~$30m USD. We first raised money from former property portal operators and seasoned angel investors with experience in the space. This was helpful to understand the best strategy. We then raised our first institutional round co-lead by Kaszek and Monashees. Both funds have deep experience in Brazil and were helpful in recruiting and making intros. In our Series B round we brought on deep pockets with Valiant Capital Partners and Dragoneer. They are both hedge funds based out of San Francisco.

Our top priorities for the business are product/engineering, marketing and continuing to hire top tier talent. We have built one of the best executive teams of any startup in Brazil. We are also open to finding acquisition opportunities if we find the right partner.

LAVCA: How actively are your investors involved with VivaReal?

Requarth: Different people have different roles in advising the company. I have several advisors that I speak with quite often. We don’t have board meetings every month, but I talk to my board members individually at least once a month. So far, our board has put a lot of trust in our management team and they strike a good balance of helping out when they can and staying out of the way so we can run the business. Overall they have played a supportive role in the business. I hear some cases where entrepreneurs aren’t happy with their investors. I am happy with the combination we have of former startup execs and financial investors.

LAVCA: What resources have you used in your search for financing?

Requarth: The best resources have been my advisors/board and other entrepreneurs. When the business was earlier stage, I also found it useful to speak at different conferences to share our progress and experience.

LAVCA: In your experience, what are the biggest opportunities and challenges for creating and growing a business in Latin America?

Requarth: The biggest challenges are almost always finding the right people. In our case, we have been lucky to find passionate people that have decided to join a startup rather than a “stable” job at a bank or consulting firm. Building a team of entrepreneurs to help build the vision and execute quickly and efficiently is the challenge of most startups in Latin America. But this also represents one of the biggest opportunities because if you build the right team you can be highly competitive and win a large market. The value creation potential is enormous.

LAVCA: How has the network of entrepreneurs in Brazil helped foster your company? Do you have any lessons learned that you want to share with new entrepreneurs interested in LatAm?

Requarth: There are a few groups of likeminded entrepreneurs that I get together with on a regular basis. The meetings are a forum for us to talk best practices, swap stories, share frustrations and get/give advice.

As far as advice goes, it is hard to offer something that isn’t cliché. I guess that Latin America provides incredible opportunities, but you need to be insanely persistent and a bit patient. Things might take a little longer here, but once you get over the hardest part of proving your model and you start to scale, the upside is big.