It’s understood that residents living in Nigeria’s most populous city Lagos account for over 200 million people. Accessing apartments is believed to be an extreme sport. Not only is rent expensive, while low – to middle-income housing is in the range of $1,000 and $5,000 per annum – amazingly, but renters are expected to pay a year or two in advance before moving in. In view of this, a proptech Spleet on a mission in this space is poised to change this.
Yearly up-front payment is believed to reduce administration costs and the chances of renters defaulting, hence, landlords in a city like Lagos have made accepting rent in this manner a norm for decades equally as a result of the fact that they find monthly payments approach unsustainable. This has really proved difficult for renters who are often placed in a precarious position of finding their initial lump sum for the first year’s rent and subsequent rent from their earnings.
It all started when a citizen returnee ‘Dolapo Adebayo’ from the U.K. to Nigeria encountered this challenge while searching for an apartment with ‘Akintola Adesanmi’ – who is familiar with how rent worked in Nigeria and also desired a change, and this gave birth to Spleet – a platform that partners with apartment owners to list their properties and offers renters options to pay their rents monthly, quarterly and annually.
Having worked in the banking and fintech space in Nigeria for a number of years, it is believed that Adesanmi’s family estate background led to the establishment of a startup in proptech. A relationship that is understood to have supplied the subject proptech – Spleet with a critical network of landlords needed to list multiple units when it went live, however, with Spleet, landlords will be able to verify tenants including automated rent collection for their rental process.
A source familiar with the matter confirmed from CEO Adesanmi in an interview on the company’s takeoff, “Our solution on the tenant side was a no-brainer. It was the landlords who needed convincing but helped that we already had a network of landlords. So instead of going out and raising venture capital, we decided that we were going to bootstrap because we could convince some landlords to list their homes on this platform that we had built and derisk some of their problems”.
The two founders bootstrapped proptech Spleet for a period of 8 months before getting into a family and friends rounds of $265,000. This allowed the subject startup to establish good unit economics and significant traction before scaling, the CEO noted. It’s evident that there was a great demand for its subscription plan, having had over 68,000 unfulfilled requests since launching – even though apartments listed on its platform are known to be pricey for the average renter in Lagos. A good number of proptech Spleet’s customers consists of middle – to high-income earners.
The company has really attracted investors’ attention, in March, Spleet announced a pre-seed investment of $625,000, and in July, the company became the first African startup to join New York’s MetaProp Accelerator. Now it’s announcing the completion of its $2.6 million seed funding led by Los Angeles-based early-stage VC firm MaC Venture Capital. The round also witnessed participation from Noemis Ventures, Assembly Funds, Plug and Play Ventures, Ajim Capital, and Francis Fund, including existing investors from its pre-seed, HoaQ Fund, MetaProp VC, and proptech operators such as Eduardo Campos and Paulo Buchucher of Yuca and Majed Chaaraoui of Insurami.
Spleet’s CEO also noted that there are various activities that will foster competition in this space. This is because there are similar providers in the relatively early proptech category, for example, Kwaba and Muster, Rent Small Small – and it expects to increase its significant market share and outpace competition following the latest fundraise. In view of this, Adesanmi cited “I think one of the things that kept us grounded was that we didn’t come solving this problem as finance professionals. Proptech is infinitely different from fintech, and the beginning is always slower”. Adding that, “If you look at Airbnb, Booking.com, and other global players, even QuintoAndar, they started slowly before blitzscaling. For us, we didn’t take the burning cash to grow approach. We took a let’s get the business model right before we start to grow approach, and bootstrapping made us execute well and understand the landscape better”.
Currently, the company prepares to test out new markets early next year, MaC Venture Capital managing general partner ‘Marlon Nichols’ made clear that his firm is proud to partner with the proptech company as “it continues to bring forward a comprehensive solution that effectively serves both sides of the housing market and makes true deposits to combating homelessness in Africa”.
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