SOUTH AFRICA – Cape Town based proptech startup HouseMe has closed a third round of multimillion-rand funding, valued at between R10 million (US$0.68m) to R20 million (US$1.36m) to help them in positioning for Series-A investment.
HouseMe is a digital long-term letting platform that makes renting easy for both landlords and tenants.
The startup’s CEO and co-founder Ben Shaw said the investment came from a large private fund which had taken part in a previous round in HouseMe.
The private fund, it said, estimates HouseMe’s market size to be valued at R120 billion (US$8.13m) per year in South Africa alone.
Shaw said in the statement that the startup has spent its investment raises on data insights and financial products such as its DepositFreeTM product with another product in the pipeline for launch in early 2020.
“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,” he said.
HouseMe said its 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.
The startup won first prize at the 2018 Seedstars Cape Town pitching event, one of the legs of the world’s biggest startup competition in emerging markets (see this story).
HouseMe has raised over R44m (US$2.98m) since it was founded by Kyle Bradley and Ben Shaw in 2016.
Previous investors include a financial services provider and a leading national property development company, bringing the total investment to US$3 million (R44.3 million) since the startup’s inception.
In addition, Cape Town based financier Geddes Capital revealed in August that it took part in a funding round late last year, committing R3 million (US$0.2m) in the round which it participated in with other investors
HouseMe says it has 95 000 users and a collection rate of 98.7% – which it claims is 20% higher than the national average.
Shaw said of the users, 60% are in the Western Cape (down from 70% over a year ago), 30% to 35% and Gauteng, with the remainder mainly in KwaZulu-Natal.