// STARTUP COMPARISON
Loft (Mexico) vs Silicon Valley Bank
Loft (Mexico) failed in 2023 due to Unit Economics. Silicon Valley Bank failed in 2023 due to Unit Economics. Both failed for the same reason — Unit Economics.
| METRIC | 🔥 Loft (Mexico) | 🔥 Silicon Valley Bank |
|---|---|---|
| Sector | Proptech | Fintech |
| Country | Mexico | USA |
| Founded | 2020 | 1983 |
| Died | 2023 | 2023 |
| Raised | $850M | Public company (SIVB) |
| Peak | $2.9B valuation | $209B assets |
| Primary Cause | Unit Economics | Unit Economics |
// WHY EACH FAILED
🔥 Loft (Mexico)
Unit Economics
Loft expanded from Brazil to Mexico in 2020, building a property transaction platform that bought and sold homes directly. By 2021 the combined entity reached $2.9B valuation. 2022 interest rate rises made the inventory-holding model catastrophically expensive. Loft cut 80% of its Mexico workforce, froze new acquisitions, and the Mexico operation effectively wound down. The iBuyer model (buying homes for cash, reselling) required cheap money — and cheap money ended.
// LESSON
iBuying is a leveraged real estate trade disguised as a tech business. At $2.9B valuation you've levered this trade massively. When rates rise 400bps in 12 months, you lose more per house than you've earned from the entire platform.
iBuying is a leveraged real estate trade disguised as a tech business. At $2.9B valuation you've levered this trade massively. When rates rise 400bps in 12 months, you lose more per house than you've earned from the entire platform.
🔥 Silicon Valley Bank
Unit Economics
Silicon Valley Bank collapsed in March 2023 after a bank run driven by duration mismatch. SVB had invested deposits in long-duration bonds during low-rate periods. When rates rose, those bonds lost value. SVB announced a $1.8B loss on bond sales and a capital raise — triggering a $42B bank run in 24 hours. The FDIC seized SVB on March 10, 2023 — the second-largest bank failure in US history.
// LESSON
Asset-liability duration matching is not optional for banks. Investing short-term deposits in long-term bonds is a structural bet against rising rates. SVB had $80B in long-duration bonds when the Fed began the fastest rate rise cycle in 40 years.
Asset-liability duration matching is not optional for banks. Investing short-term deposits in long-term bonds is a structural bet against rising rates. SVB had $80B in long-duration bonds when the Fed began the fastest rate rise cycle in 40 years.
// EXPLORE FURTHER