Like many developing markets, the Nigerian rentals sector suffers from a severe shortage and a distinct lack of trust. There are some pretty enormous barriers that cash-strapped renters need to overcome to secure housing.
There is one PropTech company out there that recently raised $2.6m to help home hunters over these obstacles. Spleet started life as a pure marketplace but recently has been adding finance solutions to its offering.
We caught up with CEO and co-founder Akintola Adesanmi to find out more about Spleet's opportunity in the Nigerian market...
Any typical Nigerian is well aware of the struggles of renting a home either from the perspective of a tenant or a landlord. From the tenant's perspective, you have the struggle of having to pay 1-2 years of rent upfront and on the landlord's side, you have the issue of being unable to adequately and properly verify prospective tenants and collect rent with ease.
Spleet equips both landlords and tenants with the tools that they need to make the renting process an easier and more comfortable experience. We are fractionalizing rent into monthly payments for tenants.
Spleet currently generates revenue from 3 channels, our marketplace, our Rent Collect product and our Spleet Verify product.
We've already housed over 1,000 tenants, processed over $3.5 million in rental payments and have over 35 corporate and individual landlords on the books.
Our pilot product was our marketplace but as we researched, observed and listened to the market we realized that the need for a financing solution is essential to solve the problem within the renting system in Nigeria. We ran a private beta of what we call “rent now, pay later”, an embedded finance solution that enables tenants to pay their rent upfront which in turn enables the tenant to pay monthly.
Covid-19 actually played a very important role in our journey as it revealed just how severely flawed the renting process is in Nigeria. It also increased the demand for a comfortable and easier means of renting a home, which improved the value of our solution and gave us an avenue to further research the rental market in Nigeria.
The Problem. Paying rent 1-2 years in advance is a pain point for almost every Nigerian. Also, with that upfront cost, comes agency and legal fees of up to 25% of the annual rent cost.
Being at the forefront of the protech industry in Nigeria means trying to solve very vast and important problems with little or no data which results in more time and resources being allocated to research. This is why it thrills us to see more people enter the proptech space in Nigeria and contribute to data collection and research within the industry.
We are currently working on perfecting our rent financing product (Rent now, pay later) as well as expansion strategies into markets outside Nigeria with similar problems.
The most common request from clients is without a doubt rental loans, which they can pay back in monthly instalments. This is because the 1-2 year deposits required to rent a home in Nigeria are financially taxing for most Nigerians.
From our analysis of the global trends and the Nigerian real estate market, we can confidently say that the rise of proptech in Nigeria has begun. This boom has incentivized other players to enter the protech space and solve unique problems within the industry. We at Spleet are very excited about the growth and expansion of proptech in Africa, and look forward to partnering with other players to solve problems in Africa.