South African Insurtech Startup LeaseSurance Raised $3M Seedby Fintechnews Africa 11 September 2023
LeaseSurance, a South African Insuretech platform underwritten by Bryte, has successfully raised R3million in a seed financing round led by Fedgroup Private Capital.
The funding will be instrumental in advancing LeaseSurance’s mission of enhancing the real estate ecosystem through its innovative lease insurance offering by expanding its team, and further developing cutting-edge technology solutions for the industry.
LeaseSurance offers lease insurance for some of South Africa’s leading residential operators and asset owners. The product has benefits for tenants and landlords alike, especially in a country characterised by low GDP growth, high unemployment, high inflation and interest rates – all of which place pressure on tenants.
Traditionally, landlords have relied on cash deposits for protection against tenants defaulting as a result of these pressures.
“Unfortunately, though, the usefulness of a cash deposit has limitations. Cash deposits present administrative challenges and limited protection against rent loss and damages, creating financial constraints for both tenants and landlords,”
comments Paul Schaefer, CEO of LeaseSurance.
LeaseSurance’s B2B, tech-driven lease insurance addresses these concerns for landlords by reducing the administrative burden, replacing cash deposits with affordable monthly fees, and lowering bad debts. As a result, landlords gain up to five times more protection, resulting in an improved Net Operating Income (NOI) for their properties.
The solution also makes it possible for landlords to remove current barrier concessions such as discounts and lower deposits, saving millions on the bottom line.
Fedgroup Private Capital’s investment in the company sets the stage for the company to build on this offering. “This is an exciting development for us. It comes at a time when we are ready to take our product to the next level,” Schaefer says.
Featured image credit: edited from Unsplash