The Nigerian real estate industry contributed a massive $43 billion to the country's GDP in the first three quarters of 2022.
Yet the country faces serious supply issues and is fighting against a catastrophic financial crisis that is leaving families without access to cash and even energy.
Chude Osiegbu founded VENCO in 2022 with the mission to create an all-in-one solution to manage multi-unit residential and commercial communities.
We caught up with him to ask about where the idea for VENCO originated, how he monetized his business, and how he plans to stay ahead of the curve in the coming months and years.
The real estate industry in Nigeria is a significant contributor to the country’s economy, with rapid growth and development in recent years.
The industry is characterized by a significant supply-demand imbalance, with a huge housing deficit estimated at over 20 million units, with challenges including inadequate infrastructure, lack of access to financing and regulatory hurdles. The government has initiated policies to address some of these issues such as the National Housing Fund, which provides affordable mortgages to Nigerians.
Overall, the Nigerian real estate industry presents a significant opportunity for proptech innovation and investment, particularly in areas such as property management, property search and financing.
The idea of VENCO started in 2018 in Port Harcourt, when the chairman of the estate I lived in at that time requested my technological expertise to help with managing the estate.
The initial plan was not to commercialise the solution. However, after moving to Lagos and experiencing and hearing about similar challenges on estates across the city, I thought the solution could be useful for solving a real problem in Africa.
Of the 2.5 million households in Nigeria that earn more than $1,000 per month, 80% live in multi-property communities.
25% of their income is spent on rent, and 50% is spent on other household needs like food and drink, utilities, internet data, cable TV and more.
However, the process of managing various aspects of life in residential and commercial communities is mainly manual and paper-based, resulting in inefficiencies that negatively impact residents’ experience and profitability for property owners.
VENCO leverages technology to deliver new services and experiences that will transform how people live in Africa’s growing cities, creating better value for everyone across the board and enhancing the living experience across the continent.
This market for household spending represents a $22.5 billion opportunity in Nigeria and $100 billion across Africa.
Convenience and speed of service have always earmarked our services to our clients and residents.
Our all-in-one technology platform helps property owners, property managers, and residents to run their communities sustainably and with minimal stress. Our solutions simplify everyday processes from managing collection, reconciling payment, visitor access to issues management, utility vending, and other estate management processes associated with multi-unit property developments across Africa.
Residents can now build an economic profile based on their financial transactions on the VENCO platform. They can now access a range of embedded financial services including insurance, credit facilitation for rent, service charges, household spending and more.
In 2022, we processed more than $13 million in transactions value via our platform.
We make money via the subscription fees we charge for deploying our software solution. We also earn income on the sale and financing of prepaid utility meters for our customers.
In the near future, we aim to add other revenue streams by launching a third-party marketplace that will see us earning commissions on transactions that we facilitate between residents and service providers.
*When the Nigerian government recently replaced its former currency with a new one, a lack of new notes meant Nigeria's cash-dependent economy reached crisis point, which led to street protests.
VENCO recently introduced a “buy now, pay later” solution for residents to buy energy packages.
The introduction of energy tokens was inspired by the network downtime currently being experienced with bank transfers in Nigeria.
The emergency token provides a resident with a limited amount of energy—no more than 100KW—just enough to see them through a short period until they can pay for the energy. There is a cap on the number of times the emergency token can be used in 30 days, so this is a limited product.
Most customers are interested in the collections features on the VENCO platform, which lets them automate the collection of service charges and other estate obligations, as well as prepaid payment for utilities.
However, we are seeing increasing demand to use our platform for rent collection—opening up opportunities for us to deliver rent financing solutions through our platform.
Multi-unit, residential and commercial communities.
One of the things that aren’t immediately apparent is how large an internal economy they house and how large a market there is in helping these communities take advantage of their collective purchasing power.
Platforms that serve these communities can create value by aggregating demand for the products and services consumed within these communities, while also leveraging data accumulated on the platform to provide more cutting-edge services to all stakeholders.
There is a need for more environmentally friendly and sustainable construction practices in the Nigerian real estate industry. Topics such as green building certifications, energy-efficient building technologies, usage of sustainable materials and construction practices that result in an overall reduced cost in operating buildings and communities should be more widely discussed.
I believe that we will see increasing digital transformation along the complete real-estate value chain as more businesses adopt proptech solutions.
VENCO plans to build our platform into a full vertical operating system that addresses all the needs of operators, owners, and residents in our customer communities. Embedded finance solutions for households and operators of these communities, delivered on the VENCO platform, is a key area of interest.