Exclusive: Mexican mortgage tech startup Yave raises $7.5M

Yave, a Mexico City-based embedded mortgage lender, raised $7.5 million in funding led by Better Tomorrow Ventures and Metaprop.

Why it matters: Despite a slowdown in the global housing market, demand for tech-enabled mortgage origination continues to grow in Mexico.

How it works: Yave created an embedded mortgage application process to help homebuilders and real estate firms in Mexico get homebuyers approved faster.

• Customers integrate Yave's pre-approval module into their websites via API, or they can track a homebuyer’s application process through its mortgage CRM.
• Yave now has 30 partners using its platform and has executed US$80 million in mortgages since its launch in 2018.

Between the lines: The company can move faster than a traditional bank because it originates and services all mortgages executed through its platform, according to founder and CEO Bernardo Silva.

• “In Mexico, five banks and the government originate 99% of the loans,” Silva estimates. “It’s very difficult to have new competitors because there’s no liquid secondary market like [Fannie Mae or Freddie Mac] in the U.S.”
• To overcome this, Yave partnered with a mortgage REIT and a couple of banks to finance the loans it originates.
• As a result, sellers typically close an additional 20% of customers using its tech, he says.

State of play: It’s a challenging time for the mortgage industry, as rising interest rates have led to an overall decline in new home purchases globally.

• But the housing slowdown in Mexico has not been as pronounced as in the U.S., in part because underlying mortgage rates there were relatively high to begin with, Silva says.

• While U.S. mortgage rates have risen from below 3% to above 7% over the course of this year, rates in Mexico have seen a more modest increase – from about 9% to 11%.

What’s next: Yave has primarily served local Mexican homebuyers to date, but is looking to expand and help originate mortgages for U.S.-based buyers looking to purchase a home there.

• Due to the current economic environment, however, plans to expand beyond Mexico are on hold for now, Silva says.

Of note: Goodwater, Activant, Moore Capital, Fintech Fund, Cross River, Vinte, Magma Partners, DILA Capital and Wollef also participated in the most recent round.