Dongnae, a South Korean business that assists renters in finding high-end apartment rentals, has raised $16.4 million in equity and $4.1 million in debt. The Series A financing raises the company’s overall capital to around $34 million (40 billion KRW). NFX, Daol Investment, Hana-Magna, Hana Financial, MetaProp, Fursys, Han River Partners, Flybridge, and Maple are among the investors. Miguel McKelvey, the co-founder of WeWork, was also a part of the stock funding. Dongnae was created in 2020 by former WeWork executives Matthew Shampine, who previously served as managing director of WeWork Asia, and In song Kim.
Shampine, the co-founder, and CEO of Dongnae told TechCrunch that after leaving WeWork, he wanted to work on something significant. Shampine observed that residential real estate was a significant deal in South Korea, but he also recognized that he didn’t know enough about the local prop-tech scene, he added. Matthew spent the following few weeks arranging meetings with professionals in the residential real estate, proptech, and startup industries in the area.
“I had worked with Adam on the early planning for WeLive, which sparked an interest in residential back then,” Shampine told TechCrunch. “Real estate had been my life for the last 10 years, so that was always on the top of my mind, and before coming out to Asia, I had worked with Adam on the early planning for WeLive, which sparked an interest back then in residential.” “I started to piece together what would eventually become my next startup after reflecting on my experience looking at apartments in NYC and then doing it again in Korea.”
Donna’s initial aim, according to the company, is to address South Korea’s unique home leasing system, known as “Jeonse.” This rental contract allows renters to rent an apartment for no (or minimal) monthly payment in exchange for a big lump sum deposit of $600,000 (700 million KRW) for a two-year lease in Seoul. Dongnae FLEX offers tailored luxury apartment rentals with a 98 percent reduction on average renters’ housing deposits. According to Shampine, the firm collaborates with landlords to deliver superior flats to renters who pay a minimal deposit and a set monthly rent.
Additionally, Dongnae PLUS gives renters access to a variety of home services, such as appliance and furniture rentals, as well as internet/cable and recurring services. To give a fully online experience, it provides Matterport-powered 3D virtual tours of its properties, and tenants may sign the lease through e-contract. “We’re ecstatic to make wonderful residences in Korea accessible and inexpensive to tenants.” “Almost all rental apartments need a large deposit, with less than 1% of flats requiring less than $16, 000,” Shampine said in a statement. “Moreover, Dongnae FLEX is a great option for landlords and brokers, since it allows them to boost their apartment’s earning potential.”
Dongnae claims to manage over 60 of the most prestigious housing complexes in Seoul and Pankgyo, South Korea’s Silicon Valley. The firm switched its operations two months after announcing its seed extension financing in May 2021. “Since we turned the firm in late July of 2021, almost everything has changed,” Shampine remarked. Dongnae manages all of the apartments displayed on its website, hence the firm no longer uses an external listing platform. Its staff has grown to roughly 40 members. According to Shampine, Dongnae currently has over 80 official local brokerage partners, whom the business refers to as Dongnae Premium Partners.
“Our service is much closer to a financial platform that allows consumers access managed, quality apartments around the city with a substantially cheaper deposit,” Shampine explained. More than 80% of its users are local Koreans, with the majority of them being young professionals working in the city, according to Shampine. Dongnae predicts a continuous growth in the number of international consumers as Korea continues to loosen COVID limitations, he noted.
Given the cheap housing deposits and the difficulty of transporting big sums of money across borders, Shampine believes their solution is suited for overseas business leaders and diplomats. Furthermore, its resident management service is provided in Korean, English, Chinese, and Japanese, making it appealing to foreigners relocating to Korea. The business intends to utilize the Series a funds to expand geographically across the Seoul metropolitan region, strengthen ties with local brokerages, and invest in technology and data to expand its exclusive tools for consumers. This year, Dongnae will launch its iOS and Android apps, as well as a marketplace for home services.