South African venture capital (VC) firm Kalon Venture Partners announced on Monday it has lead an investment of R10 million in local proptech platform Flow, an app that rewards tenants for good behaviour.
In addition to the R10 million invested by Kalon, there is a co-investment of an additional R10 million from an international VC, which is in its final stages.
The local VC firm said funding will be used to accelerate the development of South Africa’s #1 app for tenants; to fuel growth and increase the base of tenants already using Flow; as well as to increase the range of rewards available to tenants.
The proptech startup was founded by serial successful entrepreneurs, Daniel Levy, Gil Sperling (Popimedia co-founders) and Jonathan Liebmann (a property disruptor and innovator best known for creating the highly successful Maboneng Precinct in downtown Joburg).
With Flow, the first app of its kind in the world, tenants in South Africa get rewarded for registering, adding their property details, paying their rent on time, looking after their homes, and much more.
Tenants can use the app and be rewarded for good rental behaviour even if their landlord isn’t active on the app (although, there are many benefits for landlords to sign up to Flow too).
Great tenants can earn thousands of points every month, increasing their Flow score and accessing incredible rewards.
For these rewards, Flow has struck partnerships with a number of leading brands in the lifestyle, entertainment, homeware, fashion and travel space, all of which are valuable within the lives of millennials (those between the ages of 22 to 37) – a group which makes up a large portion of renters in South Africa.
Gil Sperling, CEO of Flow, notes that the property industry, locally and globally, is one of the few verticals which has not seen much innovation, making it an industry ripe for disruption.
“Compared with any other industry, the property industry – and in particular the rental market – is archaic and disconnected. There’s also a massive paradigm shift in how people should rent which is inspired and driven by their lifestyle choices, and is something proptech could and should leverage big time,” said Sperling.
“People are used to being connected all the time and transacting digitally, in real-time; and they want transparency in their dealings with companies (including their landlords). These are some of the key factors that inspired the creation of Flow. Through scaling with technology and economies of scale, we can revolutionise the economics of rent, providing a more seamless experience and more value to tenants.”
Kalon invests in and builds a portfolio of high growth technology companies, with innovative business models, geared to existing and emerging institutions and their customers.
It also invests growth capital in the form of equity to be used to assist established, but still high-risk ventures in expanding activity such as creating additional traction in South Africa, launching into Africa and then foreign markets, as well as creating new product / technology lines.
Kalon venture Partners CEO, Clive Butkow, said in a statement that the investment committee’s decision to invest in Flow was strongly motivated by the quality of the entrepreneurs and the proven track record they have.
This combined with the tech offering that they have built and continue to develop, made it an easy decision for the VC, he said.
“At Kalon Venture Partners we invest in technologies that are disrupting their respective industries and have large target addressable markets. Flow passed both these criteria with flying colors and also passed our most important investment criteria which is having the ‘A’ team,” Butkow said.
“The three founders have all built successful businesses, which is quite rare in South Africa, and have the ‘execution intelligence’ to grow a product into a large profitable enterprise”.
For more on Kalon investments, click here to read