South African proptech marketing startup Flow has raised $4.5 million in pre-Series A funding to conclude its pre-Series A investment round.
The pre-Series A round was led by Futuregrowth 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.
“With our first adtech business, we never dealt with real estate or property as we could never really service them in this country [South Africa]. And the biggest problem was that as much as real estate is the biggest asset class in the world and very valuable vertical, it is the least innovated around because it’s just highly fragmented,” Sperling told TechCrunch.
“When buying and selling homes, if you take South Africa, for example, 40,000 agents are marketing 300,000 listings at any time. Every agent is essentially a little small business because they’re commissioners, and there’s no way that they can afford to each have a marketing, data science department, and design department like big businesses can, and that is one reason why we couldn’t conduct ads or performance marketing for many of them.”
The investment will help the startup drive its B2B growth strategy, integrating the power of its social media-driven real estate marketing platform into existing international property portals and CRM platforms.
Sperling and Levy founded Flow in 2018 as an app that rewards tenants for early rent payments. Before Flow, both founders built an adtech and performance marketing company, Popimedia, which was the largest buyer of Facebook media inventory in Africa for some of the world’s biggest brands. While they sold the business to global communications group Publicis in 2015, it was some of the knowledge gained while running Popimedia that they drew on to pivot Flow into its current business model three years later.
The aim of Flow 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 marketing platform improves revenue for agents and experiences for property buyers and sellers. The startup makes money when agents use its SaaS platform and via a percentage cut from their marketing spend.
“Our route to market, for the most bit, has been going door-to-door from franchisor to franchisee to different offices within that group. And over the last couple of months, we’ve identified the enterprise channel, as we call it, which is more associated with strapping on our technology to portals,” stated the co-CEO. “So our next phase of traction and growth will come from those relationships, which are significant in our world. And that’s why we’ve just gone through this capital raise to experiment with that essentially.”
Currently Flow has over 300+ clients using its platform — a client being a real estate agency or developer where each office has about 15 to 20 smaller agents. So more broadly, Flow is used by nearly 6,000 agents across South Africa, Namibia, Botswana, Mauritius and Australia. It is in talks with partners, mainly property portals and CRM platforms, to expand into Europe (France, Germany, Belgium and the U.K.) where it’ll face stiffer competition — which the co-founders hope Flow will edge out with its technology and attention to design — but a more extensive market base.
“We’ve keenly followed Flow’s progress in South Africa and Australia and integration into the B2B side of the global property industry as the next natural step in the company’s evolution,” says Futuregrowth Asset Management head of Private Equity and Venture Capital, Amrish Narrandes, on the investment. “We share Daniel and Gil’s vision to bring the property industry into the 21st century and know they have the expertise and experience to make it happen — and we’re pleased to be able to be part of a South African company taking bold steps that will bring much-needed change to an essential global industry.”