Palomma, a Medellín-based financial services startup for the rental market, has raised $10 million in Series A funding led by Mexican venture firm Cometa, the company told Crunchbase News. The round brings Palomma’s total funding to $14 million, including $4 million in previously undisclosed funding, according to co-founder and CEO Cipriano Echavarría. Additional participants include Volpe Capital, Clocktower Technology Ventures, Tekton Ventures, Simma Capital and Yango Ventures, alongside existing investors Y Combinator, 17Sigma, Nido Ventures and Norte Ventures.
Palomma says its annual recurring revenue has grown thirtyfold in 18 months to about $3 million. It processes roughly $130 million in monthly rental payments for more than 200,000 tenants through over 500 property managers in Colombia, and it estimates $1.5 billion in annualized rent payment volume. The company plans to use the funding to expand in Colombia, develop more AI and financial products, and prepare to enter other markets; Echavarría said Colombia remains the priority, though Mexico, Brazil and the Spanish-speaking U.S. market are under consideration.
The business pairs software that helps property managers handle leasing inquiries, customer service and collections with a payments system for collecting rent and paying landlords. Those relationships let Palomma sell financing, rental guarantees and other financial products to tenants and property owners. Products include Palomma Plus, which gives tenants rewards and credit-building benefits; Palomma Advance, which lets landlords collect up to 12 months of future rental income upfront; and Palomma Protect, which covers rental income if a tenant defaults. Palomma is also developing Palomma Flex, which would let tenants split monthly rent into two installments. Property managers pay a subscription fee for the AI software, and Palomma earns a percentage of rent through its payments and financial services.
Echavarría started Palomma with Felipe Monsalve and Nicolás Gómez del Campo, MIT-trained engineers with experience at Meta, Cobre and JP Morgan. The founders entered Y Combinator in January 2023 intending to build an account-to-account payments processor for Spanish-speaking Latin America, and Echavarría said growth was largely flat during the first year before property managers began asking for help collecting rent. The team then decided to use property managers as a distribution channel rather than acquiring tenants and landlords individually. Echavarría had earlier returned to Colombia in late 2020 to join Nubank’s launch team after connecting with founder David Vélez, a fellow Medellín native, on LinkedIn; he spent nearly two years at the bank.
Palomma reports net revenue retention of 390% after 12 months, meaning revenue from an existing group of customers nearly quadrupled even after accounting for customers who left or spent less. Echavarría pointed to U.S. companies including EliseAI, Bilt, TheGuarantors and Flex as comparisons for parts of Palomma’s business, and said that reaching similar scale in Latin America requires a wider range of products than the U.S. market allows. The company uses AI to assess applicants for rental guarantees, with a leasing agent communicating through WhatsApp and collecting application documents; Palomma claims it can deliver an approval in under 30 seconds. It initially takes on guarantee risk itself, and Echavarría said it was working to finalize a partnership with an insurer that would share the risk and let it offer more guarantees. As of Nov. 4, Palomma had 18 employees, up from about 14 when it closed the Series A roughly three weeks earlier, and a single customer service employee works alongside AI agents to support the tenant base.
Pepe Bolaños, managing partner at Cometa, said Palomma stood out for its founding team and the opportunity to modernize Latin America’s fragmented rental market, noting that nearly 8 million households rent their homes in Colombia alone. He said the firm looks for companies tackling markets where outdated processes create an opportunity to build a proprietary data asset that can be leveraged and monetized through AI. Longer term, Palomma plans to expand beyond rentals into homeowners association payments and residential property transactions.
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