Dongnae, a South Korean startup that aims to help tenants facing limited housing options, raised 25 billion won (about $20.4 million) in a Series A funding round, KoreaTechDesk reported. Friday, March 25.
The funding round brings Dongae’s total fundraising to approximately $33 million since its launch two years ago. The company said it would use this latest fundraising to hire staff, develop technology and expand services, according to the report.
In South Korea’s residential rental system, known as “Jeonse”, tenants can rent apartments with little or no monthly payments by making a one-time lump sum deposit. In Seoul, that deposit is about $600,000 for a two-year lease, the report said. These Jeonse loans accounted for 41.2% of the increase in household loans in the banking sector in 2021.
Dongnae’s FLEX program offers organized rentals that reduce the standard accommodation deposit by 98%. Meanwhile, the company’s Dongnae PLUS program offers a subscription-like service that provides residents with access to appliance and furniture rentals, internet service and low-cost cleaning, according to the report.
“Dongnae allows tenants to choose a good home without the burden of a high deposit,” Min-geun Cha, head of the company, said in the report. “Almost all rental houses have high deposits, so less than 1% of apartments for sale in Seoul require a deposit of 20 million won or less.”
In this market, Cha said in the report, young professionals, honeymooners and office workers who have high incomes but limited assets have few housing options. Dongnae FLEX works for “clients who prefer an active investment rather than tying money to a deposit”.
Earlier this week, PYMNTS introduced EasyKnock, a company whose Sell and Stay leaseback program allows owners to sell their property to EasyKnock, which then rents the home — at prevailing market rental rates — to the occupant.
Read more: In Paycheck to Paycheck Economy, some are considering selling their home and renting it out
The owner-turned-renter can buy back the house at a pre-arranged price, or have EasyKnock sell the house and get the proceeds of that sale, less the amount EasyKnock paid for the house and other fees. .