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Dongnae, a South Korea-based startup that helps tenants discover premium house leases, has closed $16.4 million (20 billion KRW) in fairness and $4.1 million (5 billion KRW) in debt. The Sequence A funding brings its complete funding raised to roughly $34 million (40 billion KRW).
Buyers embody NFX, Daol Funding, Hana-Magna, Hana Monetary, MetaProp, Fursys, Han River Companions, Flybridge and Maple. WeWork co-founder Miguel McKelvey additionally participated within the fairness financing.
Former WeWork executives Matthew Shampine, who beforehand served as Managing Director at WeWork Asia, and Insong Kim based Dongnae in 2020.
Shampine, co-founder and CEO of Dongnae, instructed TechCrunch he needed to work on one thing significant after leaving WeWork. Shampine observed residential actual property was massive in South Korea but in addition knew he didn’t know sufficient, particularly in regards to the native proptech area, he stated. Matthew spent the subsequent couple of weeks establishing conferences to speak to business folks within the native residential actual property, proptech, and startup area.
“Actual property had been my life for the final ten years, in order that was all the time on the highest of my thoughts and earlier than popping out to Asia, I had labored with Adam on the early planning for WeLive, which sparked an curiosity again then in residential,” Shampine instructed TechCrunch. “Reflecting again on my expertise residences in NYC after which doing it once more in Korea, I began to piece collectively what would finally turn out to be my subsequent firm.”
Dongnae says its first mission is to sort out South Korea’s distinctive residential rental system, known as “Jeonse.” This rental contract permits tenants to hire an house at no (or little) month-to-month cost by placing up a big lump sum deposit that averages $600,000 (700 million KRW) in Seoul for a two-year lease.
Dongnae FLEX offers curated premium house leases with decrease typical renter’s housing deposits by roughly 98%. Shampine stated that the corporate works with landlords to offer premium residences to renters with a low deposit and glued month-to-month hire.
Moreover, its Dongnae PLUS allows tenants to entry house providers, starting from the equipment and furnishings leases to web/cable and scheduled recurring. To offer a totally on-line expertise, it presents 3D digital excursions of its items powered by Matterport, and the renters can signal the lease by way of e-contract.
“We’re excited to make nice properties accessible and inexpensive to renters in Korea. Nearly all rental properties have a excessive deposit, with lower than one % of items having a deposit of lower than $16K,” Shampine stated in a press release. “What’s extra Dongnae FLEX can be a beneficial resolution for landlords and brokers, because it allows them each to extend their incomes potential on their residences.”
Dongnae claims it at present manages greater than 60 of the highest house complexes in Seoul and Pankgyo, South Korea’s Silicon Valley.
Two months after saying its seed extension spherical in Could 2021, the startup pivoted the enterprise. “Nearly every part has modified since we pivoted the enterprise in late July of 2021,” Shampine stated.
All residences listed on its web site are properties managed by Dongnae, that means that the corporate now not has an exterior listings platform. The dimensions of its workforce has doubled to about 40. Dongnae now has greater than 80 official native brokerage companions that the corporate calls Dongnae Premium Companions, in keeping with Shampine.
“Dongnae companions intently work with native brokers and different proptech platforms, as our providing is far nearer to a fintech platform that helps prospects entry managed, premium residences throughout the town with a considerably decrease deposit,” Shampine stated.
Greater than 80% of its customers are native Koreans; most of them are younger professionals working within the metropolis, Shampine famous. As Korea continues to ease the restrictions on Covid, Dongnae sees a gentle improve within the variety of international prospects, he added.
Shampine stated its providing is good for international enterprise executives and diplomats, given the low housing deposits and the difficulties of transferring giant quantities of forex throughout borders. As well as, its resident administration service is offered in Korean, English, Chinese language, and Japanese, which enchantment to foreigners transferring to Korea.
With the Sequence A proceeds, the agency plans to speed up geographic enlargement throughout the Seoul metropolitan space, bolster its relationships with native brokerages and spend money on expertise and information to construct out its proprietary instruments for customers. Dongnae will roll out the iOS and Android purposes and residential providers market this yr.
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