Lhoopa raises US$80M to tackle SEA’s affordable housing crisis

By Francis Allan L. Angelo

Lhoopa, the pioneering proptech firm transforming affordable housing in emerging markets, announced the successful closure of an $80 million funding round.

The company, which focuses on leveraging technology to make affordable housing more accessible, marked one of the largest funding rounds for a startup in the Philippines and Southeast Asia this year, according to CB Insights data.

The funding comprises $20 million in equity and $60 million in debt facilities.

The equity round was co-led by the World Bank Group’s International Finance Corporation (IFC) and Wavemaker Partners, with participation from Pavilion Capital, 10X Group, Concentric Equity Partners, UAE-based Mirath Investments, and US-based NataRock Partners Fund.

Notable investors also included Steve Melhuish, Co-founder of PropertyGuru Group, Black Kite Capital, and Ron Hose, Co-founder of Coins.ph.

The debt facilities were secured from development finance institutions such as the Asian Development Bank (ADB) and the United States International Development Finance Corporation (DFC), alongside Lendable, a leading provider of debt to fintechs in emerging markets.

The achievement is particularly significant as it demonstrates a robust 3:1 debt-to-equity ratio, reflecting the strength and impact of Lhoopa’s business model.

Lhoopa Founder Marc-Olivier Caillot said the funding marks a pivotal moment for Lhoopa as they scale their operations to meet the growing demand for affordable housing in Southeast Asia.

“Our dream is to create a much-needed paradigm shift in real estate. As a proptech, our unique model of leveraging technology and local partnerships allows us to deliver quality, affordable homes quickly and efficiently. With the support of our investors and financing partners, we are poised to make a significant impact on the affordable housing market and improve the lives of countless deserving families,” Caillot said,

Sabrina Tan, President and Co-Founder of Lhoopa, added, “Our mission is to solve the problem of affordable housing and provide access and opportunities for financial growth to local partners, and this funding will enable us to accelerate our efforts. We are grateful for the continued support of our investors and partners, which validates our vision and strengthens our resolve to bridge the housing gap in emerging markets.”

Strategic Expansion and Green Housing

Lhoopa plans to utilize the new funds to bolster its presence in the Philippines and expand into other emerging markets.

The company also aims to enhance its technology systems to better support partners and launch green housing options. Additionally, Lhoopa will focus on hiring more executives, senior managers, and product developers to support its growth ambitions.

Jean-Marc Arbogast, Country Manager for the Philippines at IFC, said they are excited by the partnership.

“IFC is proud to partner with Lhoopa for the development of sustainable and affordable homes for more Filipinos. With this new partnership, we hope to help close the gap in affordable housing and promote inclusive development by supporting a company that provides digital solutions to first-time homeowners and improved access to financing for low- to mid-income consumers.”

Paul Santos, Managing Partner at Wavemaker Partners, highlighted the significance of the investment.

“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. Currently, the Philippines has an affordable housing backlog of over 6.5 million, projected to reach 22 million by 2040. Lhoopa is demonstrating that with boldness, innovation, and differentiated execution, affordable housing can be both profitable and impactful,” Santos said.

Commitment to Social Impact and Innovation

Founded in 2018, Lhoopa has sold over 2,500 affordable houses across 58 cities in the Philippines, growing its team from 30 to 95 employees.

The company’s vision is to provide over 15,000 affordable homes in the next three years, addressing a critical need in the region.

The funding will also support Lhoopa’s efforts to strengthen its technology capabilities and launch green housing initiatives, further solidifying its commitment to sustainability and social impact.

ADB’s Director General for Private Sector Operations Suzanne Gaboury, commented, “Our collaboration with Lhoopa represents a strategic partnership that aligns with our shared vision for poverty reduction and sustainability. Our innovative financing structure, a revolving facility with credit limit step-ups linked to performance, is tailored to the unique business needs of a rapidly expanding company. This is also ADB’s first affordable housing transaction with the private sector in the Philippines.”

Suresh Samuel, Managing Director and Head of Fintech Investments at Lendable, also expressed optimism about the partnership.

“Since closing our initial transaction with Lhoopa in late 2022, we have grown our partnership with the company as it has scaled. Lhoopa serves as a great example of the type of company we want to work with – a globally ambitious business addressing a core impact need, in this case access to affordable housing for a highly underserved population. We are excited to see the success Lhoopa has shown to date and look forward to deepening our relationship going forward.”