Cape proptech start-up secures ‘multimillion-rand’ funding
Cape Town-based property technology (proptech) start-up company HouseME has successfully closed another round of "multimillion-rand funding".
HouseME is a digital long-term letting platform that facilitates renting for landlords and tenants. The start-up won first prize at the 2018 Cape Town Seedstars Summit, a start-up competition in emerging markets.
According to the company, the latest round of investment comes via a large private fund which “undertook an extensive external consultancy project on the company, market and product before investing”.
The private fund’s analysis estimates HouseME’s market size to be valued at R120 billion per year in South Africa alone, says the company.
Previous investors include a financial services provider and a national property development company, bringing total investment to several million dollars since the founders first embarked on building the rental company in 2015.
Ben Shaw, CEO of HouseME, says the past few years have seen funding becoming more targeted to data insights, financial products and growth.
“Earlier this year, we launched our hugely popular DepositFREE product and we have another ground breaking financial services product in the pipeline for launch in early 2020,” Shaw says.
“The funding received so far helps position us for Series A investment, with a focus on data architecture, analytics and scalable growth strategies. Our collaboration with Gumtree at the end of last year raised our profile considerably, and the platform and team have grown substantially since that was announced.”
HouseME currently boasts a user base of 95 000 and a collection rate of 98.7%, which it says is 20% higher than the national average.
The company’s new product, DepositFREE, enables tenants to lease a residential property without paying an upfront deposit as HouseME takes tenant default risk on behalf of the landlord.
It explains that this product eases the financial burden for tenants, particularly in the current economic climate, while providing landlords with the peace of mind that a deposit brings.
The proptech company is able to provide full coverage against the value of the deposit because of the smart technology-driven tenant vetting process it has implemented since inception.
HouseME's rental guarantee, which since inception has ensured that landlords are paid on time each month, is still available through the platform, and HouseME’s transparent and digital PlaceME tool ensures that landlords get the best price and tenants don’t face any discrimination.
HouseME is a South African first, and costs landlords as little as 2.5% of rental. Using smart technology, HouseME digitally coordinates the complete viewing, vetting, administration and payment process.
Since it was first founded in Cape Town in 2016 by two young South African entrepreneurs, HouseME says it has achieved a nationwide footprint and grown 12-fold.