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.
"The housing crisis is an enormous problem that impacts us at a global scale, and Africa is no exception,'' Marlon Nichols, co-founder and managing general partner at MaC Venture Capital, said.
To solve the challenges surrounding affordability and availability in Nigeria and other parts of Africa, Spleet was founded in 2018 to build a marketplace that connects landlords with vetted tenants looking for flexible rent payment options. Since its inception, Spleet has processed millions in rent, housed over 1000 tenants and onboarded over 35 individual and corporate landlords.
The proptech today announced the completion of $2.6 million seed funding to scale its residential rent management and rent financing products in a round led by MaC Venture Capital.
This round welcomed several other investors, including, Noemis Ventures, Plug and Play Ventures, Assembly Fund, Ajim Capital, Francis Fund, and other angel investors including Proptech operators; Eduardo Campos and Paulo Buchicher of Yuca, Maajed Chaaaraoui of insurami. Existing investors from Spleet’s pre-seed round, Metaprop VC, and HoaQ Fund, also participated in this round.
With this funding, the proptech plans to expand its product offerings to include Collect, a service that automatically receives rent payments on behalf of landlords; Verify, a tool that enables landlords and real estate agents to vet and carry out adequate background checks on tenants before offering lease agreements and Rent Now Pay Later, a no collateral, affordable-interest rate rental loan product.
This funding would go into deepening our product offerings for Landlords, real estate agents and tenants across Nigeria and testing out new markets. — CEO of Spleet, Akintola Adesanmi
"In countries like Nigeria, the requirement for tenants to provide 12 to 24 months of rent payment in advance creates a barrier for large parts of the population in accessing the rental market and essentially renders them homeless," Nichols said.
Rental yields in Lagos for example are low hovering around 5% and 6% on average, according to research by Estate Intel—a Nigerian real estate data analytics platform. With these low yields, landlords try to get as much value as possible sooner through annual rental payments, running up to 2 years in advance in some cases. This capital is typically reinvested in other properties or debt servicing on their existing portfolio.
According to the CEO of Spleet, Akintola Adesanmi, "after launching a marketplace in 2019, we realized that the issues in our rental market were beyond what our marketplace could solve. Affordability is one of the biggest pain points for tenants. Most tenants earn income monthly and can therefore not afford the 1-2 years burden of paying their rent in advance."
Nichols added that "MaC is proud to partner with Spleet as it continues to bring forward a comprehensive solution that effectively serves both sides of the housing market and makes true deposits to combating homelessness."