Korean startup Dongnae secures $21M Series A to scale apartment rental service    – TechCrunch

Dongnae, a South Korea-based startup that helps tenants discover premium condo leases, has closed $16.4 million (20 billion KRW) in fairness and $4.1 million (5 billion KRW) in debt. The Collection A funding brings its whole 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, advised TechCrunch he wished 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 house, he mentioned. Matthew spent the subsequent couple of weeks organising conferences to speak to business folks within the native residential actual property, proptech, and startup house. 

“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 advised TechCrunch. “Reflecting again on my expertise flats in NYC after which doing it once more in Korea, I began to piece collectively what would ultimately change into my subsequent firm.” 

Dongnae says its first mission is to deal with South Korea’s distinctive residential rental system, referred to as “Jeonse.” This rental contract permits tenants to hire an condo 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 supplies curated premium condo leases with decrease typical renter’s housing deposits by roughly 98%. Shampine mentioned that the corporate works with landlords to supply premium flats to renters with a low deposit and stuck month-to-month hire.

Moreover, its Dongnae PLUS allows tenants to entry residence companies, starting from the equipment and furnishings leases to web/cable and scheduled recurring. To offer a completely on-line expertise, it gives 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 reasonably priced to renters in Korea. Nearly all rental properties have a excessive deposit, with lower than one p.c of items having a deposit of lower than $16K,” Shampine mentioned in a press release. “What’s extra Dongnae FLEX can also be a useful resolution for landlords and brokers, because it allows them each to extend their incomes potential on their flats.”

Dongnae claims it at present manages greater than 60 of the highest condo 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 all the things has modified since we pivoted the enterprise in late July of 2021,” Shampine mentioned.  

All flats listed on its web site are properties managed by Dongnae, which means that the corporate not has an exterior listings platform. The scale 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 response to Shampine. 

“Dongnae companions carefully work with native brokers and different proptech platforms, as our providing is way nearer to a fintech platform that helps prospects entry managed, premium flats throughout the town with a considerably decrease deposit,” Shampine mentioned. 

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 overseas prospects, he added. 

Shampine mentioned its providing is good for overseas enterprise executives and diplomats, given the low housing deposits and the difficulties of shifting giant quantities of foreign money throughout borders. As well as, its resident administration service is offered in Korean, English, Chinese language, and Japanese, which enchantment to foreigners shifting to Korea. 

With the Collection 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 know-how and information to construct out its proprietary instruments for customers.  Dongnae will roll out the iOS and Android purposes and residential companies market this yr.