VENCO, a tech company that offers solutions to enhance living experiences in residential and commercial communities in Africa, has secured $670,000 in a pre-seed funding round to scale its all-in-one tech platform that manages collections, service charge administration, utilities vending, visitor access and other services associated with property developments.
The oversubscribed pre-seed funding round was led by Zrosk Investment Management, with participation from other strategic investors including Voltron Capital, Decimal Point Ventures, Fast Forward Fund, Tayo Oviosu (CEO of Paga), Odun Eweniyi (COO of Piggyvest), Oo Nwoye, Desigan Chinniah, Dakar Network Angels and Viktoria Business Angel Network.
How will VENCO use the funds?
Starting with Nigeria and Kenya, the funding will support VENCO to build out its credit delivery infrastructure for rent and household spend, and its expansion into other cities and countries on the continent. With growing urbanisation across Africa, multi-property developments have emerged as the preferred mode of delivering residential and commercial real estate.
Of the 2.5 million households in Nigeria that earn over $1,000 per month, 80% live in multi-property communities. 25% of their income is spent on rent and 50% is spent on other household needs, including consumables, utilities, internet data, cable TV and other services.
This market for household spend represents a $22.5 billion opportunity in Nigeria, and $100 billion across Africa. However, with the process of managing various aspects of life in these communal developments being largely manual and paper-based, there are many inefficiencies that negatively impact residents’ experience and profitability for property owners.
For example, the default-rate on service charge collection for multi-property developments in Africa can be as high as sixty percent, which means that property managers are either out of pocket or forced to operate on insufficient funds. Even when payments are collected, the manual process means reconciliation is error-prone and theft is common.
What is the market reach of VENCO?
Co-founded by Chude Osiegbu (Chief Executive Officer), Reagan Mbitiru (CTO) and Uzochukwu Alor (COO), VENCO automates collection and reconciliation of all dues and payments resulting in improved receipts and better margins for property owners.
For residents, self-service tools provided by VENCO make processes such as visitor control, issue and emergency management as well as utilities-vending more seamless. With residents able to build an economic profile based on their financial transactions on the VENCO platform, they can now access a range of embedded financial services, including insurance, credit facilitation for rent, service charges and household spend along with many other services.
VENCO has recorded over 200% growth over the last 9 months and is currently in 6 cities and more than 12,000 property units across Nigeria and Kenya. Since January 2022, it (VENCO) has processed more than $10 million in transaction value via its platform.
VENCO is also partnering with ecommerce platforms to enable easier access to merchants within the community, energy companies to ensure reliable energy metering and collections, and other service providers to improve the overall experience in these communities.
What does the funding mean for the property sector?
Samson Esemuede, Managing Director, and Chief Investment Officer at Zrosk Investment Management said “The team at VENCO are building a platform that allows for the validation of the GDP of the African household. Not only does VENCO allow for significant improvement in the experience of African residents, facility managers and property owners, it could potentially unlock at scale the sort of financial services the African consumer really needs.”
“We view VENCO as an SAAS and a financial inclusion play with a potential for strong multiplicative impact across Africa. We are happy to support VENCO in achieving their vision”.
According to Chude Osiegbu, Chief Executive Officer and co-founder of VENCO, “the manual nature of many processes associated with life in residential and commercial communities in Africa presents many issues that we believe technology can fix. Beyond this, we also want to leverage technology to deliver new services and experiences that will transform how people live in Africa’s growing cities and create better value for everyone across the board.”
“Our goal is to deliver technology solutions that will enhance living experiences across the continent, and we are excited to have raised these funds to support that mission.”