South African property technology (proptech) start-up company Flow has secured $4.5million (R78 million) in funding at the conclusion of its pre-Series A investment round.
According to the firm, this is the single largest investment in the country’s proptech sector to date and among the highest in African proptech funding history.
Proptech is used to refer to the application of information technology and platform economics to the real estate industry. It overlaps with financial technology, including uses like online payments and booking systems.
In a statement, Flow says the investment will see co-founders and co-CEOs Gil Sperling and Daniel Levy drive the business’s B2B growth strategy, integrating the power of the Flow social media-driven real estate marketing platform into existing international property portals and customer relationship management (CRM) platforms.
Levy and Sperling previously founded adtech and performance marketing company Popimedia, a buyer of Facebook media inventory in Africa for some of the world’s biggest brands.
Popimedia was acquired by global communications group Publicis in 2015.
“The global property industry faces a massive fragmentation challenge, with millions of agents and thousands of property portals fighting to reach buyers and sellers on digital channels – and they haven’t been able to do so in the way many other verticals have,” says Sperling.
“Our aim has always been to enable property industry growth, helping connect buyers and sellers with agents and portals on the platforms where they spend most of their time – on social media.
“The industry desperately needs to be brought into the 21st century – and the Flow platform and its APIs enable portals to offer fully-automated off-site advertising on −among others − social media and digital out-of-home boards at scale, to enable agents and portals to easily target and connect with buyers and sellers, using proven best-practice tools.”
The company notes that property portals have shown some growth over the last few years by supplementing their base offering with value-added products.
“Digital advertising is set to grow to $448 billion in 2023, with social media advertising comprising a third of that value,” says Levy.
“Though this is happening across verticals, it’s currently impossible for the property industry to capitalise because of its fragmented nature. Flow enables portals, agents and CRMs to align with the trend and claim their part in this exponential growth. We’ve proven the case in South Africa with partners, including Prop Data, RE/MAX, Seeff, eXp South Africa and RealNet, as well as in Australia with AgentBox, leading agency groups and a major portal going live in March.
“We’re also well on our way to establishing distribution deals in the United Kingdom and are already in discussions with partners in countries in Europe, and North and South America.”
Flow’s $4.5 million pre-Series A round is led by Futuregrowth Asset Management with $2 million, followed by Endeavour Harvest Fund and serial entrepreneur and investor Steven Heilbron.
Initial investors Kalon Venture Partners, Vunani Fintech Fund and Buffet Investments have also increased their investment in the company.
“We’ve keenly followed Flow’s progress in South Africa and Australia, and integration into the B2B side of the global property industry as the next natural step in the company’s evolution,” says Amrish Narrandes, Futuregrowth Asset Management head of private equity and venture capital.
“We share Daniel and Gil’s vision to bring the property industry into the 21st century and know they have the expertise and experience to make it happen – and we’re pleased to be able to be part of a South African company taking bold steps that will bring much-needed change to an essential global industry.”
Kalon Venture Partners CEO Clive Butkow says the firm’s increased investment in Flow shows its conviction about the power of the platform.
“Flow has proven its value in enabling an antiquated industry − as we knew it was when we invested in the start-up phase of the company − and we are excited to see it grow into a global brand, solving global problems.”
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