As a continent made up of developing countries, Africa is full of market frictions that are inspiring a flurry of startups, each founded to fill the gaps in the emerging markets. The focus, which started with fintech, is gradually shifting to other sectors like logistics, edtech, and now housing.
In Nigeria’s housing sector, the huge housing deficit has come with a lot of gaps that need to be filled. From unaffordable rents to rent duration issues that have dragged on for decades without solution, tenants are usually at the mercy of landlords.
To tackle these challenges, Tola Adesanmi founded Spleet in 2018. The aim of Spleet is to make it easy for Africans to rent a home. The startup has developed a financial services solution that makes it easier for landlords to verify and vet their tenants and collect rent electronically, while also making it easier for people looking for affordable housing to pay their rent.
The idea looks set to be the game-changer in African housing sector, and has caught the interest of investors. Spleet has secured a total of $625,000 in a pre-seed round. The investors led by MetaProp VC are Future Africa, FEDHA Capital, VFD Group, Moonshot VC, Gbenga ‘GB’ Agboola, and HoaQ of Squarefoot.
The oversubscribed pre-seed round will be used to offer rent financing and tenant verification solutions for Africans. The Nigerian prop-tech startup will use the funds from this fresh investment to develop its newest rent financing product, Rent Now Pay Later, as well as other solutions to facilitate seamless residential renting procedures. The beta version of the product is currently being used.
Customers will be able to get low-interest loans to pay their rent says Spleet. As the cost of owning a home rises, an increasing number of individuals are choosing to rent instead, resulting in an increase in the demand for housing. In addition, weak income growth has contributed to Nigeria’s housing dilemma.
Though cities like Abuja and Lagos have enacted laws to enable monthly pay of rents, majority of tenants across Nigeria are still required to pay for up to two years in advance. In addition, renters are burdened with this onerous obligation because the majority of them do not make enough money to cover the landlord’s necessary down payment. With the rent finance product, prospective tenants have the option of breaking down the upfront rent into manageable monthly instalments so that they may better track their income.
In 2010, 85% of Nigeria’s urban population lived in rented housing, spending more than 40% of their disposable income on rent. According to the 2009 census, the urban population of Nigeria was 48% of the country’s total.
Moreover, three-quarters of Nigeria’s estimated 154 million inhabitants live in metropolitan areas, according to this data. And of this total, 62.93 million people (or 85% of the population) are housed in rental properties across the country. According to Numbeo, a global data service provider, renting an apartment in Nigeria is more expensive than in any other African country except Seychelles.
“After opening a marketplace in 2019, we found that the challenges with our rental market were beyond our marketplace’s ability to remedy. Affordability is a major concern for renters. Most tenants are salaried and consequently cannot afford to pay their rent in full for the next two to three years,” Adesanmi says.
“Rent collection is a major headache for landlords, and Spleet’s tenant verification and collection product will be scaled to address this issue. These tools will assist landlords and property managers in protecting their rental investments by conducting background checks on prospective tenants and selecting only trustworthy, verified individuals. ”
Landlords will also benefit from automated rent collection by reducing the risk of late payments and loss of rental income.
“Landlords find it difficult to verify renters and are dependent on tenants’ decisions to get regular rent payment, resulting in high default and an ineffective rent collecting system,” said Adesanmi. Using proprietary and third-party APIs, Spleet can verify tenants and guarantors and automate rent collection, reducing landlord risk.
“Individual and corporate landlords may now automate the collection of rent, manage their tenants, and submit maintenance requests for their properties thanks to our extensive tenant screening process,” he said
Source : Tekedia