Summary
After thorough diligence, we’re excited to lead a $150k pre-seed raise for Edanra – a property-tech company that is revolutionizing how millions of renters pay rent in Ghana through monthly rent payments instead of the archaic advanced rent payment system. By making renting accessible and helping tenants build credit through monthly rent payments in Ghana, Edanra’s product is tapping into a market of over 6 million tenants and a $4.7 billion annual revenue market.
Edanra’s value proposition
In Ghana, landlords charge advance rent – that is, about 2-3 years of rent is required to be paid upfront. Yep, you read that right- while it may sound like a foreign concept, this is the reality of millions of tenants in Ghana, leaving many without access to a place to call home. Additionally, the country’s 1.2 million housing deficit, lack of reliable brokers, and high costs all make it a nightmare for renters. Edanra’s technology will revolutionalize the rental housing market in Ghana by allowing tenants to find homes without relying on expensive and unreliable brokers, and also pay rent monthly.
In addition to paying rent monthly, Edanra’s platform also allows tenants to build up a credit score over time. This is a game-changer for many people in Ghana who currently lack access to reliable credit systems. By paying rent on time, tenants can build up a positive credit history, making it easier for them to access other forms of credit in the future. Here’s a summary in a video snippet below:
Edanra’s Business Model
Edanra operates as a surrogate property manager and financier of leases for its tenants. Their model is straightforward – after acquiring units, they list them on their platform, allowing tenants to apply for them. To ensure income eligibility, tenants are vetted and, upon approval, enter into a monthly rent payment plan with a 38% interest rate.
Financials
During diligence, we delved deeper into Edanra’s financials so you don’t have to, and a summary of their cash flow projections is available upon request. Here are the key takeaways:
1. Edanra has been in operation since March 2021, when they launched their first property listing product. They offered free listings from March to October 2021 and began charging tenants an 8% service fee for using their platform to find homes between November 2021 and October 2022. Over the 11-month period, they earned $29,804 in revenue from service fees.
2. Despite having only received $60,000 in angel investment and $30k from service fee revenue, Edanra has achieved impressive results. With their newly built technology to capture tenants that can pay monthly, the company is now poised to scale, and our investment comes at an opportune time.
3. Edanra has shifted its model from an 8% service fee to making 38% interest from monthly rents. They conducted a pilot with five tenants who paid rent monthly and found that there were no defaults. In four out of five cases, tenants voluntarily paid several months’ rent in advance. Edanra’s waitlist currently has over 200 tenants, highlighting strong demand for their apartments in the market.
What does our Investment mean for Edanra?
With our $150k investment, Edanra will be able to scale its product by acquiring 100+ units that tenants can rent monthly. Wavy Ventures will continue to work with Edanra throughout this growth process to ensure that the company expands at a reasonable pace, while also providing strategic guidance to help it scale. We foresee a 3-5 year investment period with Edanra and a potential exit during later rounds of financing.
Media coverage
Other References to learn more about Edanra
- Ghana Web article: Tenants can now pay rent monthly
- Launch of rent monthly product news on Tech Nove