Propzy, a Vietnamese offline-to-online real estate platform, raises $25 million Series A
Propzy, a Vietnam-based startup that guides consumers through the entire process of a real estate transaction, has raised a $25 million Series A led by Gaw Capital and SoftBank Ventures Asia, the early-stage venture arm of SoftBank Group. Other investors included Next Billion Ventures, RHL Ventures, Breeze, FEBE Ventures, RSquare and Insignia.
Instead of proptech, Propzy founder and CEO John Le prefers the term “firetech” to describe the startup, using “fire” as an acronym for financial, insurance and real estate technology. Founded in 2016, Propzy’s technology covers almost every stage of a real estate transaction, from brick-and-mortar sales centers to an online marketplace for listings, financial products like mortgage lending and, finally, enterprise software for property managers and tenants.
The company’s Series A will be used to grow its product line and provide a balance sheet for its expansion into direct mortgage financing. Most of Propzy’s current operations are in Ho Chi Minh City. It plans to expand into Hanoi through the rest of this year and 2021, before exploring other Southeast Asian markets, including potentially Thailand, Malaysia and the Philippines.
Propzy currently has 30 brick-and-mortar sales centers, with a total of 400 sales staff. Over the next 18 months, it expects to increase those numbers to 70 sales centers and 1,300 sales staff.
The sales centers complement Propzy’s online marketplace, with tens of thousands of properties pre-screened by its staff before they are entered into listings. Le said Propzy has handled more than $1 billion in property transactions since its launch, making it the largest offline-to-online real estate network in Vietnam.
Le is a serial entrepreneur and his past startups include LoanTrader, a mortgage trading platform that was backed by Goldman Sachs, Citigroup and GE Capital. In 2009, he went to Vietnam to launch an international credit bureau with TransUnion. During that time, he realized how burdensome the process of renting or buying property there can be.
In the United States, consumers benefit from listing platforms like Zillow and Trulia, licensed real estate agents and escrow offices. In Vietnam, however, Le said many listings are on classified sites, similar to Craigslist, and are often not handled by licensed agents. There is also no standardized listing data, which makes comparing multiple properties difficult for consumers.
To replicate the U.S. experience in Vietnam, “you can’t just launch a website and put properties on it,” Le said. “We built an offline agency, but you need to utilize tech to increase its efficiency and performance, so we are an offline-to-online platform. That high-touch customer service needs to go all the way, not just for property matchmaking but to help both parties successfully close and settle transactions.”
Propzy built an automated valuation model using data it has gathered over the last four years to assess homes, help recommend prices and show customers comparable properties. On the financing side, the model is also used by Propzy’s partner banks to help customers get pre-approved for loans based on property value.
After buyers move into an apartment unit, they can use Propzy’s tenant software to report issues or book maintenance services and amenities. If they decide to sell or rent the property, they can also do so through the platform.
The pandemic has put downward pressure on Vietnam’s real estate market, with a 70% reduction in Propzy’s business during the country’s nationwide lockdown in April. On the other hand, more people were doing searches online and inquiring about selling property, Le said.
“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 added. “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.”
In a press statement about the investment, Gaw Capital managing partner Humbert Pang said, “Given the favorable macroeconomics exhibited by Vietnam and Gaw’s conviction in offline-to-online business models in real estate, we are excited by our investment into Propzy. We see the value proposition and steadfast vision that Propzy and its management team brings to the table and are therefore very optimistic in Propzy’s business and the market within which it operates.”