MAIN IMAGE: Rudi Botha, CEO of BetterHome Group; Tony Clarke, Managing Director of Rawson Property Group
When the news broke on the 18th of January that South African proptech innovators Flow have secured $4.5million (+-R78 million) in funding, many property practitioners might have been excused for scratching their heads. What does Flow securing such a significant investment at the conclusion of their pre-Series A investment round – the single largest investment in the country’s proptech sector at that stage and amongst the highest in African proptech funding history – portend for the local property market?
Rudi Botha, CEO of BetterHome Group shares his view, “This investment is fantastic news for the South African proptech industry – and the real estate industry as a whole. As a business, we believe that technology has a significant role to play in how agents serve their clients, and that innovative products like those that Flow has developed will lead to a better home journey for all. Gil and Daniel are outstanding entrepreneurs who’ve found a gap to add huge value by solving real world challenges for agents and it’s a proud moment for the local proptech industry that they’ve secured funding to continue doing so. On behalf of the team, I wish them everything of the best as they continue to grow their business in South Africa and embrace opportunities to export their skills and product abroad.”
According to Flow, 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 astute Flow social media-driven real estate marketing platform into existing international property portals and CRM platforms.
“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 amongst 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.”
Tony Clarke, Managing Director of Rawson Property Group, says that “the Group welcomes investment into the ‘proptech’ space as a sign that there is optimism in SA-based tech companies and the real estate sector, particularly given the challenges facing the tech sector abroad over the past year. It’s interesting to note Flow’s recent shift to B2B as a sign that they have recognised the importance of supporting the existing industry (which represents an “about turn” on what they set out to do when they first launched).
Flow believes that property portals have shown some growth over the last few years by supplementing their base offering with value-added products – and that it’s offering is an exponential value-add that helps them reach people off-site, drives more traffic and increases revenue by drawing in buyers and sellers based on location, interests and readiness to do deals. “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.
What does Flow do?
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 & South America.”
A practical question
Clarke does caution that “There is a finite number of purchasers buying at any given stage and as it stands right now, Real estate is exploring several avenues, paying various companies and different portals to reach the same buyer. Will this platform not just be another avenue and cost to attract the same client? The proptech company that manages to first attract the client at the least cost to our industry is the proptech company that will win in the end”.
As with any start-up it would seem that time will tell whether Flow is able to grab sellers first. What does seem certain is that this investment in this proptech system is a step in the right direction.
