African tech can produce surprises. One this week is a $1.2 million Sequence A startup shopping for a part of a $1 billion firm.
That’s what Lagos based mostly property startup ToLet.com.ng has achieved, buying Jumia Home Nigeria for an undisclosed quantity. Jumia Home is a subsidiary of the continent’s lone tech unicorn — Pan-African e-commerce big Jumia.com.
ToLet and Jumia Home Nigeria will merge platforms underneath the brand new title of PropertyPro.ng.
The acquisition was a results of ToLet’s energy in market and assist from their lead investor, Malaysia based mostly Frontier Digital Ventures, in keeping with CEO and Co-Founder Fikayo Ogundipe.
“This happened from FDV―which has a robust real-estate labeled portfolio throughout Africa― which markets they had been sturdy and the place Rocket [Jumia’s lead investor] was weaker,” he advised TechCrunch. “In Nigeria Jumia Home was quantity three or quantity 4 in on-line listings. It didn’t make sense for Rocket to burn extra capital in that place, so [FDV] approached them on the acquisition.
So how did ToLet finance the acquisition? With out extra financing from lead investor FDV, in keeping with Co-Founder Sulaiman Balogun. “The $1.2 million in funding we introduced final yr is the one spherical we’ve disclosed. We’ve raised sufficient capital to run by this deal and actually fund the enterprise and develop,” he mentioned.
With the acquisition, ToLet is buying the whole Jumia Home platform — workers, belongings, and their listings and agent community. The brand new PropertyPro entity will mix ToLet’s 60,000 listings to Jumia Home’s 22,000 to create the biggest on-line actual property listings platform in Nigeria with 65 % of the market, in keeping with Balogun.
ToLet wouldn’t disclose annual income stats, however execs defined it makes cash from agent subscription charges. ToLet’s legacy platform had 10,000 brokers, of which 20 % had been charged.
“We have now a long-term plan to cost a better proportion on our the premium plan,” mentioned ToLet CEO Ogundipe―noting brokers obtain extra choices underneath that plan.
ToLet’s new PropertyPro platform is not going to cost charges or commissions on itemizing gross sales, one thing a few of its opponents do, in keeping with Balogun. “We did that on our earlier mannequin, however stopped. That elevated the variety of brokers on our platform and generated extra income general,” he mentioned. ToLet’s present on-line listings are about 70 % leases and 30 % gross sales.
Co-CEOs Balogun and Ogundipe mentioned to count on updates on the built-in PorpertyPro platform. They’ve engineers growing new ease of search options for the location and plan to launch an android app in coming weeks.
A chief purpose of the acquisition and new PropertyPro platform is to broaden ToLet’s agent and listings attain throughout Nigeria and improve the variety of gross sales listings, Balogun advised TechCrunch.
As a market, Nigeria boasts the twin distinction of being Africa’s most populous nation and largest financial system, valued at roughly half a trillion . A small real-estate sector (circa eight % of the general financial system) and a excessive urbanization fee have created a housing deficit within the nation. Moreover, a nascent credit standing market within the Nigeria has fueled practices whereby landlords can require advance deposit of as much as two years hire from tenants.
ToLet hopes its latest acquisition and upgraded PropertyPro platform can ease that.
“We imagine creating extra visibility of actual property listings and ease of connecting patrons and sellers on-line can clear up a few of these liquidity issues and bridge this hole between provide and demand,” mentioned Co-Founder Sulaiman Balogun.