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Futuregrowth invests in proptech start-up Flow Living
Estate agents have traditionally relied on outmoded forms of marketing, such as physical signs on lampposts and brochures, to capture the attention of potential buyers. But Flow Living (Flow), a company in which Futuregrowth has invested, has brought the industry into the 21st century by offering the property market access to cost-effective and automated digital advertising campaigns.
Futuregrowth led and invested in Flow’s $4.5 million pre-Series A funding round. The asset manager invested alongside Steve Heilbron, the former chief executive of Cash Connect. Other venture capital funds invested in Flow include Kalon Ventures, Vunani, Cre and Endeavour, highlighting the strength and quality of the company’s shareholder base.
Futuregrowth’s investment in Flow bolsters the asset manager’s early-stage investments in proptech and adtech assets, of which another is Mobiz, an SMS-based marketing platform. Currently, these investments are made via the Futuregrowth Development Equity Fund until the Futuregrowth High Growth Development Equity Fund is fully operational.
Flow co-founders Daniel Levy and Gil Sperling saw a gap in the media landscape, launching the ground-breaking South African proptech platform, which matches the customers with the most appropriate properties on social media platforms like Facebook and Instagram.
Both founders have previous experience and success in establishing disruptive businesses. Their last business venture, Popimedia, is a buyer of Facebook media inventory in Africa for some of the world’s biggest brands. Popimedia was subsequently acquired by global communications group Publicis.
Flow provides a digital solution to a problem that estate agents didn’t even know they had: relying on expensive, outdated methods of marketing that couldn’t be measured and gave no insights into whether advertising campaigns had been successful or not.
The Flow proposition provides estate agents with access to social media advertising that is more targeted, increases brand engagement and delivers measurable results.
Flow’s innovative marketing proposition has seen strong traction, achieving double-digit revenue and transaction value growth over the past year. The company already commands 10% of the addressable market in property advertising.
Since its launch, Flow has signed up around 4 500 agents and 260 agency offices, including the leading estate agent companies, with the addressable market comprising 40 000 agents and 5 000 agency offices in South Africa.
The market size gives it plenty of scope to grow in the years ahead, including globally. The funds raised from the pre-Series A funding round will capitalise the company sufficiently to continue building its brand amongst consumers, launch new products and expand into new regions.
Flow’s revenue model is also attractive. It takes a fee for each social media advert it places and licences its software to the estate agents. Meanwhile, its customers benefit from a far broader reach at a fraction of their previous advertising budgets and don’t have to pay monthly and upfront fees.
Says Amrish Narrandes, head of private equity and venture capital at Futuregrowth, “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.
“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.”
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