Palomma, a Medellín-based startup that combines AI software with financial services for landlords and tenants, has secured $10 million in Series A funding led by Mexican venture firm Cometa, Crunchbase News reported. The financing brings the company's total raised capital to $14 million, including $4 million in previously undisclosed funding, according to co-founder and CEO Cipriano Echavarría. The company plans to expand within Colombia, develop additional AI and financial products, and prepare for potential entry into Mexico, Brazil and the Spanish-speaking U.S. market.
Palomma's annual recurring revenue has grown thirtyfold over 18 months to reach approximately $3 million, according to the report. The startup now handles roughly $130 million in monthly rental payments and serves more than 200,000 tenants through over 500 property managers in Colombia. It estimates $1.5 billion in annualized rent payment volume. The company reports net revenue retention of 390% after 12 months, meaning revenue from an existing cohort of customers nearly quadrupled, even after factoring in customers who departed or reduced spending. As of early November, Palomma employed 18 people, up from roughly 14 when it completed its Series A about three weeks earlier. A single customer service employee works with AI agents to support the approximately 200,000 tenants paying rent through the platform.
Echavarría, a former Nubank executive, told Crunchbase News the company's goal is to "win Colombia" before pursuing other markets. The startup reaches tenants and landlords through property managers, who receive access to Palomma's AI software for handling tasks such as leasing conversations. Palomma then processes rent payments, which create a record of rental income and tenant payment histories that the company uses to evaluate applicants for financial products. Pepe Bolaños, managing partner at Cometa, noted that nearly 8 million households in Colombia alone rent their homes. He wrote that Palomma "stood out for its founding team and the opportunity to modernize Latin America's fragmented rental market."
The company's business model reflects Echavarría's view that building a large business in Latin America requires a broader product range than in the United States. He compared different parts of Palomma's operations to U.S. companies including EliseAI, Bilt, TheGuarantors and Flex, but argued that reaching similar scale in Latin America demands offering multiple solutions. Property managers pay a subscription fee for the AI software, while Palomma earns a percentage of rent through its payments and financial services. The startup offers products for both sides of the rental transaction: Palomma Plus provides tenants with rewards and credit-building benefits, while Palomma Advance allows landlords to collect up to 12 months of future rental income upfront. Palomma Protect covers rental income if a tenant fails to pay. The company is also developing Palomma Flex, which would enable tenants to divide their monthly rent into two installments. Bolaños said the combination of distribution, proprietary payment data and AI gives Palomma "a competitive advantage that can become stronger as the company grows."
Looking ahead, Palomma intends to expand beyond rentals into homeowners association payments and residential property transactions. The startup operates on the premise that AI can make real estate financial services cheaper to deliver, similar to how mobile technology helped digital banks compete with lenders maintaining large branch networks. The company's rental guarantees place Palomma at risk if tenants don't pay, and the startup initially assumes that risk itself, though Echavarría said it's working to finalize a partnership with an insurer that would share the risk and allow the company to offer more guarantees. The startup's AI also helps determine which tenants qualify for rental guarantees, with Palomma's leasing agent communicating through WhatsApp and collecting application documents. The company claims it can deliver an approval in under 30 seconds by drawing on information from leasing conversations and rental payment behavior. For startups targeting emerging markets, the strategic question isn't whether to build a narrow product or a platform, but whether local market dynamics justify the operational complexity of doing both simultaneously. Palomma's bet on vertical integration through property managers may prove more defensible than acquiring individual consumers, though execution risk rises sharply when a single team must excel at enterprise software, payments infrastructure, and underwriting all at once.