Propzy will use the latest funds to simplify real estate transactions, manage and expand leasing, and purchase of properties
Vietnamese real estate technology startup Propzy has raised US$25 million in a Series A funding round led by Gaw Capital and SoftBank Ventures Asia, the early-stage investment arm of SoftBank Group, according to a statement released today.
Propzy will use the latest funds to simplify real estate transactions, from beginning to end, and manage the assets or logistics to streamline the entire real estate lifecycle, such as leasing and purchasing of landed houses and high-rise condos.
The startup will also continue its expansion into leasing services by leveraging the online to offline capabilities of its platform, which has recorded 50% month-over-month growth, according to the statement.
According to a report by e27, Propzy recorded a revenue growth of 417% in 2019 and had previously raised a total of $12 million. One of its investors, Frontier Digital Ventures, exited the startup in February this year, by diluting its 20% stake for a return of 300% at $4.7 million, in anticipation of losses.
Founded in 2016 by CEO John Le, a serial entrepreneur, Propzy is a full-stack real estate platform and integrated marketplace that offers open house, closing-settlement services, turn-key mortgage financing, and enterprise software for property managers and tenants.
Le prefers the term “firetech” (financial insurance and real estate technology) for Propzy. As the only “firetech” company in Vietnam, the startup pioneered the hybrid online to offline model that offers a full-stack platform that guides consumers through the entire process of a real estate transaction.
While the startup’s operations are based in Ho Chi Minh City, it plans to expand into Hanoi through the rest of 2020 and 2021, before exploring other Southeast Asian markets, including potentially Thailand, Malaysia and the Philippines, according to a report by TechCrunch.
Vietnam’s economy is one of the fastest-growing in Southeast Asia with 70% of Vietnam’s population considered economically secure, according to World Bank. Propzy currently has 30 brick-and-mortar centers and expects to increase it to 70 centers with 1,300 advisers across the country over the next 18 months.
According to Le, “Sellers see uncovering buyers’ needs as a headache that slows the buying process. Therefore, we invited a group of world-class investors to provide an advanced solution. With the largest number of estate agents in Vietnam – around 400 sales staff operating in 30 locations – we have facilitated over $1 billion in property transactions since inception and anticipate another record-setting year of growth, as we continue to expand.”
Vietnam has emerged as a thriving real estate market in Southeast Asia, although it lags in new technology adoption.
According to World Bank data, real GDP in Vietnam grew by about 7 percent in 2019, one of the fastest growth rates in the region. The country reported a GDP growth of 3.8% in the first quarter of 2020, and aims to achieve at least 5% GDP growth this year, despite the coronavirus pandemic.
However, the global pandemic has impacted Vietnam’s real estate market, which experienced its lowest transaction volume in Q1 2020, and experts warn that 2020 could be a challenging year for real estate in Vietnam.
According to TechCrunch, Propzy experienced a 70% reduction in business during the countrywide lockdowns in April, although Le claims that property sales inquiries and searches went up.
“We’re carrying an all-time high pipeline of deals, as consumers start to have more confidence and know where the market will be in two to three months,” Le told TechCrunch.
“People still need houses, so deals in the pipeline are three times over the fourth-quarter average. We expect them to close quickly, so we are on a good path to hitting our numbers at the end of the year,” he added.
Gaw Capital’s Managing Partner, Humbert Pang said, “Propzy is an example of the many macroeconomic successes in Vietnam. With its innovative breakthrough in real estate’s offline to online business models, we see the immense potential of Propzy to skyrocket.”
“The security that the Vietnamese economy offers to property investors and homebuyers is ideal for Propzy to thrive. We are excited to support the company in its mission to enable a 10X consumer experience in real estate,” said Daniel Kang, Senior Partner of SoftBank Ventures Asia.
Header Image Courtesy of Propzy