South African property technology (proptech) startup Flow has secured $4.5-million (almost R80-million) in venture capital funding.
Its current investment round, known as pre-Series A, has seen the single largest investment in the country’s proptech sector and among the highest in African proptech funding history for this stage.
Founders and co-CEOs Gil Sperling and Daniel Levy say they will drive a business-to-business growth strategy, integrating the Flow social media-driven real estate marketing platform into existing international property portals and CRM platforms. Levy and Sperling previously founded adtech and performance marketing company Popimedia, the largest 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 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.”
Property portals have shown some growth over the last few years by supplementing their base offering with value-added products. Flow 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. 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 Future growth Asset Management with $2 million, followed by Endeavour Harvest Fund and serial entrepreneur & investor Steven Heilbron. Initial investors Kalon Venture Partners, Vunani Fintech Fund and Buffet Investments have also increased their investment in the company.
Kalon Venture Partners CEO Clive Butkow says that their increased investment in Flow shows their 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,” he says.