— SmallSmall proptech startup raised $3 million to expand to other major cities in Nigeria.
— Majority of the investments came from local investors like Iroko, Flutterwave, Vendease, Esusu, and so on.
SmallSmall (formerly called RentSmallSmall) raised $2 million in equity and $1 million in debt to expand its business outside of Nigeria’s mega city, Lagos.
The startup’s business model involves offering renters an opportunity to pay rent on a monthly basis and help landlords vet tenants on the other end. Its offering is a sought after service because renting houses in Lagos can be difficult as landlords typically demand about a year’s rent (or more) upfront.
The demand for its business is quite high and SmallSmall said that it currently has a waitlist of 80,000 clients, of which it has only served 1,500. It also offers a purchase service for people looking to invest in real estate by helping them acquire properties and source for tenants too. There is a StaySmallSmall aspect of its business that works like Airbnb, providing clients with short stays.
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The startup claims to have processed more than 25,000 monthly stays in Lagos and Abuja. Its service has helped landlords save about $1.5 million in damages and clients have skipped nearly $1.2 million in house agent fees. SmallSmall has managed to keep its default rate to less than 7%, thanks to its vetting process.
In the seed funding round that saw it raise a total of $3 million, the startup relied on investors like Techstars, Oyster Ventures, Asymmetry Ventures, Vivaz, and Niche Capital. It also got angel investments from Chartboost, Universe, Flutterwave, Esusu, Wemimo Abbey, Iroko, and Vendease. Clearly, bets came from local investors who recognise the gap that SmallSmall is striving to fill.
Property tech is a rising industry in Nigeria and it faces down a longline of tradition that relied on house agents who operated with impunity and charged fees for just showing you around, regardless of whether you eventually rent from them or not. Renters are not the only ones that suffer from the traditional house hunting practice in the country, property owners too have to factor in agent’s fees in their rent.
SmallSmall is planning to expand its service into Port Harcourt, Enugu, and Jos, by the end of the first quarter of 2023.
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