Futuregrowth, the asset manager majority owned by Old Mutual, has invested in property technology (prop-tech) start-up platform Flow Living.
The Cape Town-headquartered fixed interest fund manager company, which oversees about R192.3bn in assets on behalf of local insurance and retirement funds, was the lead investor in Flow’s $4.5m pre-Series A funding round. Futuregrowth invested alongside Steve Heilbron, the former CEO of Cash Connect, as well as venture investors Kalon Ventures, Vunani, Endeavour and CRE Venture Capital.
Futuregrowth’s investment in Flow bolsters the asset manager’s early-stage investments in prop-tech and ad-tech assets, another of which is Mobiz, an SMS-based marketing platform. These investments are made via the Futuregrowth Development Equity Fund until the asset manager’s High Growth Development Equity Fund is fully operational.
“Flow provides the Futuregrowth Development Equity Fund with exciting growth potential in an area of the market that has lagged the innovation other industries are experiencing,” said Amrish Narrandes, head of private equity and venture capital at Futuregrowth.
“After doing our due diligence, we found a strong investment case favouring investing in Flow. It has all the qualities we look for in a potential venture capital investment: a strong and experienced management team, a large addressable market, a compelling revenue-generation model and a significant competitive advantage.”
Estate agents have traditionally relied physical signs and brochures for marketing to lure potential buyers. Flow Living offers the property market access to automated digital advertising campaigns, including social media, for a more targeted approach to prospective buyers.
Daniel Levy and Gil Sperling started Flow with the idea of matching prospective home buyers with the most appropriate properties on social media platforms such as Facebook and Instagram.
They have experience and success in establishing disruptive businesses through their last venture, Popimedia, which buys Facebook media inventory in Africa for some of the world’s biggest brands. Popimedia has since been bought by global communications group Publicis.
Flow has achieved double-digit revenue and transaction value growth over the past year and says it accounts for 10% of the addressable market in property advertising. Since its launch, Flow has signed up about 4,500 agents and 260 agency offices in a market of 40,000 agents and 5,000 agency offices in SA.
The funds raised from Flow’s pre-Series A funding round provide sufficient capital for the company to continue building its brand, launching new products and possible expansion in new regions.
Flow earns its revenue by charging a fee for each social media advert it places and also licenses its software to estate agents. It says its customers benefit by achieving a far broader advertising reach at a fraction of the price of traditional advertising.
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