SmallSmall secures $3M seed to expand its proptech offering across Nigeria
Nigerian proptech, SmallSmall has raised $3 million seed to expand into major Nigerian cities like Port Harcourt, Enugu, and Jos, in 2023.
The urban population of Nigeria constituted 48% of the country's population, according to the United Nations. This indicates that 73.92 million Nigerians out of the estimated total population of 154 million people live in urban centres.
And of this figure, 62.93 million (representing 85%) live in rented houses across the country. This also implies that of the estimated 17 million inhabitants of Lagos State, 14.45 million people live in rented accommodation. Although there has been controversy surrounding the exact data on the housing deficit in Nigeria, experts have argued that the deficit in Africa's most populous nation is high. Also, the available houses are expensive.
To enable affordable and efficient housing in Nigeria, Tunde Balogun co-founded SmallSmall, formerly RentSmallSmall, with Naomi Olaghere and Pidah Tnadah in 2018, following his difficulty to rent a house after he returned to Nigeria from the U.K.
The Lagos-based startup has raised $3 million ($2 million equity and $1 million debt) in seed funding, to expand into major Nigerian cities like Port Harcourt, Enugu, and Jos, before the end of Q1 2023. Prior to this announcement, the proptech rebranded its identity from RentSmallSmall to SmallSmall in July 2022.
SmallSmall enables renters to make monthly rent payments and offers landlords a system to vet tenants, increase their income and manage properties. Since its launch, the proptech has over 476,000 people registered on its platform, 80,000 of that number are on its waiting list, while 1,500 of the registered users have been able to access its offerings.
"Homeownership can improve the economic status in one way or another because it generates passive income for people to meet other needs. So we want to play a part in that and help young people in their journey from renting to investing to eventually buying real estate," Balogun said.
The proptech has processed over 25,000 monthly rents across Lagos and Abuja, meaning a typical SmallSmall user stays an average of 17 months on the platform. SmallSmall claims to have had less than a 7% rent default rate, saving property owners over $1.5 million in damages and tenants over $1.2 million in broker fees.
On the potentials of its monthly payment offering, SmallSmall's CEO and co-founder, Tunde Balogun said that: "Our market is for young professionals with an average age of around 28 years. It’s a huge market. We surveyed almost 3,000 people last year in Lagos, which showed that 80% of them wanted to pay their rent monthly. So that tells you how much adoption the monthly space would have if the markets eventually opened up."
Currently, other proptech such as Kwaba, Muster and Spleet are offering similar renting services as SmallSmall. Spleet, for instance, secured a $2.6 million seed to scale its residential rent-focused products across Africa.