Spleet gets $625k in a pre-seed round to enable rent financing in Africa

Spleet has raised $625,000 in a pre-seed round to build rent financing and tenant verification solutions for Africans.

The oversubscribed pre-seed round led by MetaProp VC with participation from Future Africa, FEDHA Capital, VFD Group, Moonshot VC, HoaQ, CEO of Squarefoot, Jonathan Wassersturm, CEO of Flutterwave and Gbenga ‘GB’ Agboola.

“Spleet has distinguished itself as a best in class product within the nascent and exploding proptech sector in Nigeria. It remains extraordinarily difficult to rent apartments efficiently and we believe Spleet will create a massive business by removing this friction.” Zachary Aarons, co-founder and General Partner at MetaProp stated.

Founded in 2018 by Tola Adesanmi, Spleet’s mission of building a future where renting a home is much easier, has made significant progress with the creation of a financial services solution enabling landlords verify and vet tenants as well as automate rent collections while individuals looking for comfortable living spaces with flexible payment options can do so with little to no hassle.

With this new investment, the Nigerian proptech startup will build its newest rent financing product - Rent Now Pay Later and other products to enable seamless residential rental processes. The product is currently in beta testing.

Related: Buy Now, Pay Later—the latest era of consumer financing in Nigeria

According to Spleet, “this product will give tenants access to affordable loans to pay rent. With the soaring cost of buying a home,  more and more people are opting for rentals as such there has been an increased demand for living spaces; further the slow wage growth has contributed to a housing crisis in Nigeria. Landlords are requiring tenants to pay 1-2 years upfront for their rent.”

This requirement is very onerous for the tenants, with most tenants not earning enough to afford the upfront payment required by the Landlords. The rent financing product is a much-needed solution for tenants providing prospective Tenants the option of breaking down the upfront rent into easy monthly payments to track their income.

In Nigeria, 85 percent of Nigeria’s urban population live in rented accommodation in 2010, devoting more than 40 percent of their income on rent. The urban population of Nigeria constituted 48 percent of the country’s population in 2009.

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 percent) live in rented houses across the country. However, Securing an apartment for rent in Nigeria is more expensive than any other country in Africa except for Seychelles, according to Numbeo, a global data service provider.

According to Spleet's CEO, Tola 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.”

Spleet will also scale its tenant verification and rent collection product, to vet tenants and automate the collection of rent payments which is a huge pain point for landlords. These products will help Landlords and their property managers protect their rental investment by running background checks on prospective tenants and choosing only trustworthy, verifiable candidates. Automated rent collection will also help Landlords minimize the risk of loss of rental income and late payments.

Adesanmi added that “landlords find it difficult to verify tenants and are dependent on tenant decisions to receive regular rent payment, resulting in high default and an inefficient rent collection system. Spleet is able to reduce landlord risks by verifying tenants and guarantors via proprietary and 3rd party APIs as well automating collection of rent.

“We have verified thousands of tenants for our individual and corporate landlords enabling these landlords to automate collection of rent, manage tenants and maintenance requests for their homes.” he said.

March 15, 2022, 11:17AM (WAT)—The name of the General Partner at MetaProp has been corrected to Zachary Aarons from Zachary Evans.