Evaluating only Loft (2022 crisis)’s profile at its peak — without knowing the outcome — the model ranked Unit economics as the #1 likely cause. That’s exactly how it died.
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Documented cause
Loft, a Brazilian technology-enabled real estate brokerage, raised $788M and reached a $2.9B valuation. In 2022 Brazil's mortgage rates rose sharply (SELIC rate exceeded 13%), dramatically reducing home buying demand. Loft lay off approximately 150 employees, reduced its balance sheet of owned homes, and retrenched to core brokerage from its iBuying activities. The company survived restructured.
Lesson
“iBuying requires a low-rate environment to function. When mortgage rates double, buyer demand halves and holding costs double. iBuying in a rising rate environment is a leveraged bet against the central bank. Model it accordingly.”
FAQ
What happened to Loft in 2022?
Loft, a Brazilian proptech unicorn with $788M raised, laid off 150 employees in 2022 and retrenched from iBuying after Brazil's SELIC rate exceeded 13%, collapsing home buying demand.