- Dongnae, a South Korean startup that helps tenants find excellent apartment rentals, raised $16.4 million in equity and $4.1 million in debt.
- The Series A round brings the total investment in the firm to around $34 million.
- Dongnae was founded in 2020 by Matthew Shampine, who formerly served as managing director of WeWork Asia, and In song Kim, a former WeWork executive.
Dongnae, a South Korean business that assists renters in locating quality apartment rentals, has raised $16.4 million in equity and $4.1 million in debt. The Series A round raises the company’s total investment to around $34 million (40 billion KRW). NFX, Daol Investment, Hana-Magna, Hana Financial, MetaProp, Fursys, Han River Partners, Flybridge, and Maple are investors. Miguel McKelvey, the co-founder of WeWork, also participated in the equity funding.
Shampine, co-founder, and CEO of Dongnae, previously stated that he desired to work on something significant following his departure from WeWork. He added that Shampine saw the importance of residential real estate in South Korea and recognized his lack of knowledge, particularly in the local prop-tech industry. Matthew spent the following several weeks arranging meetings with members of the local residential real estate, prop tech, and startup communities.
Real estate had been his life for the previous decade, so it was always on his mind. Before coming to Asia, he had collaborated with Adam on the early planning stages of WeLive, which ignited an interest in residential at the time, Shampine told TechCrunch. Reflecting on my experience looking for flats in New York City and subsequently, in Korea, he began piecing together what would eventually become my next business.
Dongnae’s initial aim, according to the company, is to address South Korea’s unique home leasing system, dubbed “Jeonse.” This rental contract enables renters to rent an apartment with no (or negligible) monthly payments for a big lump sum deposit of up to $600,000 (700 million KRW) for a two-year lease in Seoul.
Dongnae FLEX offers handpicked luxury apartment rentals to save ordinary tenants around 98 percent on their housing deposits. According to Shampine, the firm partners with landlords to supply renters with superior apartments for a modest deposit and set monthly rent.
Additionally, Dongnae PLUS provides residents with access to various home services, from appliance and furniture rentals to internet/cable and regular recurring payments. To give a fully online experience, it provides Matterport-powered 3D virtual tours of its properties, and tenants may sign the lease through an e-contract.
They’re delighted to make unique houses more cheap and accessible to tenants in Korea. In a statement, Shampine said that almost all rental apartments need a substantial deposit, with less than 1% of flats requiring less than $16,000. Additionally, Dongnae FLEX is a beneficial option for landlords and brokers since it helps them to maximize the revenue generated by their flats.
Dongnae claims to handle more than 60 of Seoul’s most prestigious residential complexes and Pankgyo, South Korea’s Silicon Valley. In May 2021, two months after announcing its seed expansion round, the firm announced a business shift. Almost everything had altered when we restructured the firm in late July 2021, Shampine explained.
Dongnae manages all of the apartments displayed on its website, which means the firm no longer uses an external listing platform. Its crew has nearly doubled in size to roughly 40 members. According to Shampine, Dongnae currently has more than 80 official local brokerage partners, whom the business refers to as Dongnae Premium Partners.
Dongnae partners collaborate closely with local brokers and other proptech platforms since their product is more akin to a fintech platform that enables consumers to access managed luxury apartments around the city with a substantially cheaper deposit, Shampine explained.
Over 80% of its customers are native Koreans, with the majority of them being young professionals working in the metropolis, Shampine added. Dongnae predicts a continuous growth in the number of international consumers as Korea continues to relax COVID regulations, he noted.
Shampine stated that their solution is perfect for overseas business leaders and diplomats due to modest down payments and the challenges of transferring significant sums of cash across borders. Additionally, its resident management services are provided in Korean, English, Chinese, and Japanese, advantageous for foreigners relocating to Korea.
The business intends to use Series A proceeds to accelerate geographic development throughout the Seoul metropolitan region, strengthen ties with local brokerages, and invest in technology and data to develop its exclusive user tools further. Dongnae will launch its iOS and Android applications and a marketplace for home services this year.