Korean FinTech startup Dongnae has attracted an additional 25 billion won ($21 million) of Series A funds. The total funding raised by Dongnae now stands at 40 billion won ($34 million) since its establishment in 2020. The startup plans to recruit talent, develop technology, and expand services with the investment attraction.
The funding includes NFX, Daol Investment (formerly KTB Network), Hana-Magna, Hana Financial, MetaProp, Fursys, Han River Partners, Flybridge and Maple. WeWork co-founder Miguel McKelvey also participated in the financing.
Seoul-based Dongnae offers services in the real estate market focussing on rental properties. The startup wants to tackle problems faced by tenants facing limited housing options.
Making premium housing affordable & accessible
South Korea’s unique residential rental system, called “Jeonse.” allows tenants to rent an apartment at no (or little) monthly payment by putting up a large lump sum deposit that averages $600,000 (700 million won) in Seoul for a two-year lease. Jeonse loans accounted for 41.2% of the increase in household loans in the banking sector in 2021, an increase from the previous year.
Dongnae FLEX provides curated premium apartment rentals to lower typical renters’ housing deposits by approximately 98%. The properties selected by experts are located in a new apartment complex in Seoul. They meet high-quality standards provide basic services such as cleaning, painting, interior inspection, and facility repair. In addition, it gives Dongnae PLUS, a subscription-type home service that allows residents to use everything necessary for life, from furniture and home appliance rentals to cleaning and the Internet, at a reasonable cost.
Min-geun Cha, the head of the Dongnae, said, “Dongnae allows tenants to choose a good house without the burden of a high deposit. 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 such a market, young professionals, newlyweds, and office workers with high incomes but not enough assets yet have few options when choosing a living environment. Dongnae FLEX is an ideal solution for customers who prefer active investment rather than binding money to a deposit.”
Dongnae FLEX is a solution that allows both landlords and real estate agents to earn profits from the sale of apartments. Dongnae COO Kim In-song said, “Dongnae is a professional rental management company that guarantees monthly rental income directly to the leaser and increases the leaser’s income through professional space management. In addition, we are recruiting high-quality tenants through our own tenant credit analysis. About 80 brokers have already signed up for the Dongnae premium partner program. Landlords can visit the nearest premium partner branch to apply for property easily, and they are always waiting for inquiries from brokers to sign up for a partner.”
Dongnae is founded on the commercial real estate and finance expertise that the two founders and key executives have accumulated while working at WeWork. CEO Min-geun Cha, co-founder and COO Kim In-song, and CRO Suji Lee are all talented professionals who have sourced, built, sold, and operated tens of thousands of WeWork workspaces across the US and the Asia Pacific. In addition, Seon-ju Yuk, the CFO of the Dongnae, has worked for JP Morgan, Citigroup, and Hana Financial Investment, etc., and has more than 15 years of experience in finance.
Dongnae is managing more than 60 properties in new apartment complexes in Seoul. Recently, the management area has been expanded to Pangyo-ro, and it plans to continue expanding throughout the metropolitan area this year. “Residential real estate is the largest asset class in Korea. Dongnae’s remarkable growth rate and strong partnerships with leading financial institutions make this investment even more attractive,” said Kyeong-hyeon Kyung, managing director of Daol Investment. “We are delighted to be able to help Dongnae transform the domestic housing market with our capital, expertise, network and experience.”
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