VENCO secures $670k pre-seed to enable proptech in Africa
Nigerian proptech startup, VENCO has secured $670,000 pre-seed to enhance living experiences in residential and commercial communities in Africa
With growing urbanisation across Africa, multi-property developments have emerged as the preferred mode of delivering residential and commercial real estate.
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.
VENCO, a technology company that provides solutions to enhance living experiences in residential and commercial communities in Africa, has secured $670,000 in an oversubscribed pre-seed funding round to scale its all-in-one technology platform that manages collections, service charge administration, utilities vending, visitor access and other services associated with multi-unit property developments across Africa.
"The manual nature of many processes associated with life in residential and commercial communities in Africa presents many issues that we believe technology can fix," Chude Osiegbu, CEO and co-founder of VENCO, said. "Beyond this, we also want to leverage technology to deliver new services and experiences that will transform how people live in Africa’s growing cities and create better value for everyone across the board. Our goal is to deliver technology solutions that will enhance living experiences across the continent, and we are excited to have raised these funds to support that mission."
According to Samson Esemuede, Managing Director, and Chief Investment Officer at Zrosk Investment Management, "the team at VENCO are building a platform that allows for the validation of the GDP of the African household. Not only does a platform like VENCO allow for significant improvement in the experience of African residents, facility managers and property owners, it could potentially unlock at scale the sort of financial services the African consumer really needs."
"We view VENCO as both a SAAS and a financial inclusion play with a potential for strong multiplicative impact across the continent. We are excited to support the VENCO team in achieving their vision," Esemuede added.
Starting with Nigeria and Kenya, the new funding will support VENCO to build out its credit delivery infrastructure for rent and household spending, as well as its expansion into other cities and countries on the continent.
Aside from VENCO, other African startups have also raised venture funding to serve the property market on the continent. In October 2022, Nigerian proptech, Spleet secured a $2.6 million seed to scale its residential rent-focused products across Africa.
Another Nigerian proptech, SmallSmall also raised a $3 million seed to expand its rent financing product into major Nigerian cities like Port Harcourt, Enugu, and Jos, in 2023.
How does VENCO work?
Co-founded by Chude Osiegbu (CEO), Reagan Mbitiru (CTO) and Uzochukwu Alor (COO), VENCO has recorded over 200% growth over the last 9 months and is currently in 6 cities and more than 12,000 property units across Nigeria and Kenya. Since January 2022, it has processed more than $10 million in transaction value via its platform, according to a statement shared with Benjamindada.com.
The company is also partnering with e-commerce platforms to enable easier access to merchants within and around the community, energy companies to ensure reliable energy metering and collections, and other service providers to improve the overall experience in these communities.
VENCO automates the collection and reconciliation of all dues and payments in communities resulting in improved receipts and better margins for property owners. For residents, self-service tools provided by VENCO make processes such as visitor control, issue and emergency management as well as utilities-vending more seamless.
With residents able to build an economic profile based on their financial transactions on the VENCO platform, they can now access a range of embedded financial services, including insurance, credit facilitation for rent, service charges and household spending along with many other services.