Bloomberg Línea — The winter of startups seems to speed up the business cycle of companies. For the startup resulting from the merger of Mexican Casai and Brazilian Nomah, two of the largest in the segment of short-stay rentals, neither a recent investment from celebrities like Daddy Yankee and some baseball stars nor the capital of Andreessen Horowitz (a16z), the Silicon Valley venture capital giant, saved its operations in Brazil. Bloomberg Línea found out that the company is closing in the country and will stop paying its network of landlords and suppliers.
The company resulting from the operations of Casai and Nomah, formed in the second half of last year, said that “90% of contracts with real estate owners are up to date with payments and the remainder will be paid by the end of January”. The company is also informing its suppliers of this situation, adding that their outstanding payments are agreed upon through January 31.
“In a closure process, it is natural to reorganize payments with key partners and customers. Casai is committed to organizing a coordinated and well-structured exit in Brazil, respecting the employees and partners involved,” the company said in a statement.
Last month, Nico Barawid, founder and CEO of Casai, left the operations in Brazil. He will focus now on Mexico.
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“With his experience founding and operating Nomah in Brazil for the past six years, Thomaz Guz was responsible for operations and strategy in Brazil as president for six months for integration. And as CEO of the company founded in Mexico City, Nico Barawid will be focused on the Mexican business. Going forward, Casai will focus on the Mexican operations and Guz will transition to new ventures once he finalizes the last details in Brazil,” the company told Bloomberg Línea.
The startup formed by Casai and Nomah told Bloomberg Línea that it has suggested that landlords start renting out their properties through competitors Stay Charlie, an investee of Cyrela, and Tabas, a startup that was bought by American Blueground in November 2022.
“The companies have made an official communication to the owners, in which Charlie offered the possibility of managing the assets on the same conditions. The owners’ acceptance has been great and we are happy with the decision; it is an important way to (preserve) what was built by the company,” Casai/Nomah said in the statement.
“With the end of operations in Brazil, Casai/Nomah looked to Charlie to offer an alternative of continuity to investors and they started referring us as a solution for lease management,” Allan Sztokfisz, CEO and co-founder of Charlie, said in a statement to Bloomberg Line. “We expect to contribute to a good and profitable operation.”
The start of the dismantling of the Casai/Nomah operation reportedly began in December with layoffs in Brazil, according to two people familiar with the matter told Bloomberg Línea.
In August 2022, Casai announced a merger with Nomah, a company in the same sector that was owned by Brazilian unicorn Loft. It received capital from Andreessen Horowitz, Monashees (which maintained a stake in Casai), and Loft as a consequence of the share transfer.
Loft said it “has maintained a minority stake in Casai since this merger and, like the other shareholders Andreessen Horowitz, Kazsek, and Monashees, among others, has a representative on Casai’s board, in this case, Florian Hagenbuch [its co-founder]”.
Bloomberg Línea anticipated talks of this transaction in July when Casai laid off employees in Mexico and Brazil.
Casai and Nomah are not the only proptechs that have joined forces in Brazil in this period of higher interest rates. In December, condominium management company Lello and housing platform Housi sealed a partnership to share their services.
In November, Casai and Nomah announced that Latin American artists Daddy Yankee and Ozuna and Major League Baseball players Albert Pujols, Raul Ibañez, Edwin Encarnación, and Elvis Andrus were investing in the companies through TRUE Capital Management.
Casai and Nomah together had nearly 2,000 flats for rent in Sao Paulo, Rio de Janeiro, Florianopolis, and Brasilia, as well as Mexico City, Los Cabos, and Tulum. In its Series A, Casai raised US$53 million. The company did not disclose how much was invested in the new company after the merger with Nomah.
Bloomberg Línea sought, a16z, Monashees, Daddy Yankee, and TriplePoint Capital --which had provided a credit line of up to $25 million to Casai, but they did not respond to requests for comment