Exclusive: Nubank Alum Raises $14M For Colombia’s Palomma To Tackle Rent Payments, Landlord Financing

Back in 2020, Cipriano Echavarría was weighing his next career steps while working at Morgan Stanley in New York when he spotted a nameplate on his desk. Among the prior occupants of that workspace was David Vélez.

Upon researching the name, Echavarría discovered that Vélez was not only a fellow native of Medellín, Colombia, but also the creator of Brazilian digital bank Nubank. Echavarría snapped a photo of the desk plaque and reached out via LinkedIn to request career guidance.

As it turned out, Vélez had a prospective opening for him: Nubank was preparing to announce its expansion into Colombia and was assembling a launch team. By late 2020, Echavarría had relocated back home to join the effort, with intentions of eventually launching a venture of his own.

Today, Echavarría’s Medellín-based enterprise, Palomma, has secured $10 million in a Series A funding round led by Mexican venture capital firm Cometa to scale its financial services operations for tenants, landlords, and property managers, Crunchbase News has exclusively learned.

According to co-founder and CEO Echavarría, this latest round brings Palomma’s cumulative funding to $14 million, which includes $4 million in previously unannounced capital. Backers include Volpe Capital, Clocktower Technology Ventures, Tekton Ventures, Simma Capital, and Yango Ventures, alongside returning investors Y Combinator, 17Sigma, Nido Ventures, and Norte Ventures.

Palomma reports that its annual recurring revenue has multiplied thirtyfold over an 18-month span to reach approximately $3 million. The firm processes roughly $130 million in monthly rental transactions, catering to upwards of 200,000 renters via more than 500 property managers across Colombia. It calculates its annualized rent payment volume at $1.5 billion.

The enterprise plans to deploy the capital to broaden its footprint in Colombia, build out new artificial intelligence and financial offerings, and gear up for international expansion. Potential target regions include Mexico, Brazil, and the Spanish-speaking U.S. demographic, though Echavarría emphasized that Colombia remains the primary focus.

“We want to win Colombia,” he stated during an interview.

Finding a business in rent payments

Palomma’s business model merges software designed to assist property managers with leasing inquiries, client support, and collections alongside a payment infrastructure for gathering rent and disbursing funds to landlords. These interactions enable the company to cross-sell financing, rental guarantees, and additional financial services to both occupants and property owners.

Following nearly two years at Nubank, Echavarría teamed up with Felipe Monsalve and Nicolás Gómez del Campo—MIT-trained engineers boasting backgrounds at Meta, Cobre, and JP Morgan—to establish Palomma. The founders entered Y Combinator in January 2023 with the objective of creating an account-to-account payments engine tailored for Spanish-speaking Latin America. Expansion remained largely stagnant during their first year, Echavarría noted. However, property managers soon began requesting assistance with rent collection.

Friction points on both sides of the transaction quickly became evident. Tenants typically paid rent early in the month but received their wages through bi-monthly paychecks. Meanwhile, property owners depended heavily on rental revenue yet faced difficulties borrowing against it or safeguarding their income if renters defaulted. Property managers similarly struggled with manual, labor-intensive workflows for collections and payouts, Echavarría explained.

Rather than acquiring individual tenants and landlords directly, Palomma opted to reach them through the organizations overseeing their properties.

The leadership team concluded, “let’s basically use the property managers as a distribution channel,” Echavarría recalled.

From software to financial services

Property managers gain access to Palomma’s AI-powered software, which automates functions such as initial leasing conversations. The platform then proposes handling their rent collection processes. These transactions supply the business with a verified history of rental income and payment habits, which can be leveraged to evaluate candidates for financial products.

From there, Palomma delivers distinct offerings for renters and landlords. Palomma Plus supplies occupants with rewards and credit-building perks, whereas Palomma Advance allows property owners to collect up to 12 months of anticipated rental income upfront. Palomma Protect safeguards rental revenue in the event of a tenant default. Additionally, the organization is currently formulating Palomma Flex, an offering designed to let renters divide their monthly rent obligations into two payments.

Property managers cover a subscription cost for the software tools, while Palomma retains a percentage of the rent processed through its payment and financial systems.

Customer adoption across multiple product tiers has accelerated Palomma’s momentum. The firm highlights a net revenue retention rate of 390% over a 12-month period, indicating that income generated from an existing cohort of clients nearly quadrupled, even after factoring in customer churn or reduced spending.

Ultimately, the strategy of blending AI leasing software, transaction processing, and financial services mirrors Echavarría’s perspective on what it takes to construct a major enterprise in Latin America. He cited U.S. firms such as EliseAI, Bilt, TheGuarantors, and Flex as structural analogies for various elements of Palomma’s operations. Echavarría contends that achieving comparable scale within Latin America demands a broader array of offerings.

“In the U.S., you can build one solution and be really large because the market allows it,” he noted. “In Latin America, if you want to be really large, you need to do all the things.”

Managing the risk

Artificial intelligence also assists in determining tenant eligibility for rental guarantees. Palomma’s virtual leasing assistant interacts via WhatsApp to gather application paperwork. The company asserts it can issue an approval decision in under 30 seconds by analyzing data pulled from leasing chats and historical payment behavior.

The startup’s rental guarantees place Palomma on the hook financially if renters fail to pay. While the company initially absorbs that exposure directly, Echavarría informed Crunchbase News that it was in the process of finalizing an agreement with an insurance provider to share the risk, enabling Palomma to issue a higher volume of guarantees.

Furthermore, the startup leverages AI to maintain a lean headcount. As of November 4, the company maintained a staff of 18 workers, up from roughly 14 when it closed its Series A roughly three weeks prior. A single customer support representative works alongside AI agents to assist the approximately 200,000 tenants submitting rent through Palomma’s infrastructure, according to Echavarría.

The business operates on the thesis that AI can render real estate financial services more affordable, much like mobile technology enabled digital banks to rival legacy lenders burdened by extensive branch networks. Over the long horizon, Palomma intends to expand beyond residential rentals into homeowners association fee collections and residential real estate transactions.

Pepe Bolaños, managing partner at Cometa, stated that Palomma distinguished itself through its founding team and the distinct opportunity to modernize Latin America’s fragmented rental sector. In Colombia alone, nearly 8 million households reside in rental housing, he pointed out.

“We look for companies tackling markets where outdated processes create an opportunity to build a proprietary data asset that can be leveraged and monetized through AI,” he wrote via email.

Bolaños highlighted Echavarría’s background in scaling Nubank, alongside Monsalve and del Campo’s technical and financial expertise. Within approximately 18 months, Palomma scaled to process nearly $130 million in monthly rental transactions and support upwards of 200,000 renters with a team of about 14 employees, he observed.

“That kind of execution is unusual. It convinced us that this team has what it takes to build a much larger business,” he added.

Unlike rival startups concentrated on isolated services, Palomma merges rent collection, tenant screening, and rental guarantees while harvesting data across the entire workflow, Bolaños explained. Directly managing payments grants the company visibility into renter conduct, which sharpens underwriting, flags potential defaults, and underwrites fresh financial offerings, all while AI streamlines operations.

“We believe the combination of distribution, proprietary payment data and AI gives Palomma a competitive advantage that can become stronger as the company grows,” he stated.

?Frequently Asked Questions

01What is Palomma?

Palomma is a Medellín-based startup that provides software and financial services for property managers, landlords, and tenants, focusing primarily on rent payments, rental guarantees, and landlord financing.

02How much funding has Palomma raised?

The company has raised a total of $14 million, including a recent $10 million Series A round led by Cometa.

03What regions does Palomma operate in?

Palomma currently operates in Colombia, with future plans to potentially expand into Mexico, Brazil, and the Spanish-speaking U.S. market.

04How does Palomma use artificial intelligence?

Palomma uses AI-driven software to handle leasing inquiries via WhatsApp, process rental applications in under 30 seconds, automate customer support, and evaluate tenant risk for rental guarantees.

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Illustration: Dom Guzman