Of the 2.5 million households in Nigeria that earn more than $1,000 per month, 80% live in multi-property communities. 25% of their income is spent on rent and 50% is spent on other household needs, including consumables, utilities, internet data, cable TV and other services. This market for household spending represents a $22.5 billion opportunity in Nigeria and $100 billion across Africa.
However, with the process of managing various aspects of life in these communal developments being largely manual and paper-based, there are many inefficiencies that negatively impact residents’ experience and profitability for property owners.
For example, the default rate on service charge collection for multi-property developments in Africa can be as high as 60%, which means that property managers are either out of pocket or forced to operate on insufficient funds. Even when payments are collected, the manual process means reconciliation is error-prone and theft is common.
Since 2010, Chude Osiegbu has been living in rent estates in Nigeria and the poor organisations of these communities were always a challenge. “Over time, I realised that technology can be used to solve these issues like resident databases and payment collection that were common in estates in some Nigerian cities where I and some of my friends were living in,” Chude told Benjamindada.com over a call.
In 2022, Chude (CEO), Reagan Mbitiru (CTO) and Uzochukwu Alor (COO) co-founded VENCO (formerly known as Estate Managers), a prop-tech to enhance living experiences in residential and commercial communities in Africa through an all-in-one technology platform that manages collections, service charge administration, utility vending, visitor access and other services associated with multi-unit property developments across the continent.
Although VENCO was launched in March 2022, it existed as a department in Manqala Limited, where he was a Director and a CTO. “We built it as a side project but due to its growth, we decided to create a startup out of it. Our first deployment on VENCO [as a side project] was in 2018 for Rivtaf Golf Estate in Port Harcourt,” Chude said.
After relocating to Lagos in 2019, he realised the prevalence of the issue that VENCO was solving, it was at this point that he saw the need to commercialise the product. Between March to December 2022, the company recorded over 200% growth in eight African cities—Abuja, Lagos, Ekiti, Ogun, Port Harcourt, Enugu, Nairobi and Kaduna (to launch at the end of January 2023) —servicing more than 12,000 property units across Nigeria and Kenya.
As of December 2022, VENCO processed more than $10 million in transaction value via its platform. The proptech also raised $670,000 pre-seed in a round led by Zrosk Investment Management to enable product and geographical expansions.
“Eight out of every ten residential areas is in the form of a multi-property development, this is due to increasing urbanisation,” Chude—a graduate of engineering at the University of Nigeria, Nsukka who started his software career in 2002—said while underscoring the relevance of the company.
Powering operations and communal commerce
Chude: Communities are the target audience of VENCO. We provide services to the operators of multi-unit communities—in Nigeria, estates like Banana Island, Prime Water View Gardens and 1004 are the most recognisable forms of these communities.
At those estates, the developers have aggregated a large number of properties under a facility manager whose job is to ensure that those communities are operating optimally, this involves security and payment collections for the upkeep of the environment, utility and other shared costs—in this context, VENCO helps these managers to streamline and automate collections.
Seamless utility vending and maintenance are some of the services that we also provide for these communities. We have aggregated a platform that addresses all the typical needs of multi-unit communities that are springing up across Nigerian (and other African) cities like Abuja, Lagos, Port Harcourt and Nairobi, where we recently deployed.
As a business to business to consumers, the first thing is improving the operations in these communities. In doing that, we have built platforms for facility managers, landlords and residents; this has enabled us to curate the economic profiles of estate and individual households within the communities that use VENCO.
This unlocks the next phase of what we want to build; an embedded finance solution for the community and individual households in the communities; we have started this in ten estates that we work with, enabling them to make payments for utility bills, service charges and rent. Subsequently, we are able to provide rent financing—for residents, such that they are able to pay their rent monthly instead of annually—and other types of communal commerce.
Dealing with challenges at VENCO
Chude: With the increased African tech talent exodus—“japa wave”, we find team members wanting to leave for “greener pastures” and this can cause disruption, especially if the individual is a key team member. We are dealing with that by developing a pipeline of entry-level professionals who are willing to join the company and understand it quickly.
Also, the prevailing economic challenges. A Cultural issue that we had to deal with is that previously facility managers saw VENCO as a threat, however, they have realised that we are here to make their work easier.
Expansion and partnerships! Chude tells Benjamindada.com that VENCO intends to expand across Nigeria and the rest of Africa, as well as improve its technologies. “We are going to build extra functionalities and enter into partnerships that will enable our communities to experience their full potentials,” he said.
VENCO is currently discussing partnerships with e-commerce companies to enable residents to create e-stores to market and sell their goods through the platform as well as utility companies to help in vending and billing their products and services through an all-in-one infrastructure.
With its $670,000 pre-seed, the Nigerian B2B2C proptech company intends to grow rapidly in Nigeria and Kenya and expand to Ghana and South Africa by the end of 2024.