Spleet, a property tech startup that raised $2.6 million in 2022 from investors like MaC ventures and HoaQ Fund, will lay off an undisclosed number of employees as inflation and price increases from landlords it works with put the business under pressure.
With 32 full-time employees, the layoffs will affect all employees not in core operations, one person familiar with Spleet’s business said. The company pushed back against this claim but declined to share specifics.
“I cannot comment on the number of people that will be affected; we’re still in the middle of the process,” said Adetola Adesanmi, the company’s CEO.
Founded in 2017, Spleet allows Nigerians to rent properties and pay monthly instead of the typical yearly rental charged in many parts of Lagos.
The argument for property tech startups like Spleet is that monthly rental arrangements allow people to plan around their finances better. The asset-light model revolves around properties the company leases.
“We’re letting go of some team members because when prices went up, landlords began renewing at 0.8 to 2.2x last year’s rent,” said Adesanmi. “Many of our tenants can’t afford that, and the best way to continue as a business is to lay off people.”
The company told employees about the layoffs at an all-hands meeting on Tuesday, two people present at those discussions said. “There will be difficult decisions because of the present macroeconomic conditions,” one person at the meeting recalls the CEO saying.
Another person also said the company’s revenues were under pressure last month, citing significant revenue dropoffs that TechCabal could not immediately confirm.
In Nigeria, soaring inflation and massive currency devaluation is pushing property owners who partner with Spleet to demand more value for their property. Some of these properties are in prime areas of Lagos and already come at a steep cost relative to the city’s average monthly income.
The property tech sector in Nigeria enjoyed attention and funding from 2018, with players like Fibre, Spleet and Muster pioneering a pay-per-month model they claimed would revolutionise Nigeria’s housing market and solve a worrying housing deficit.
Yet, Nigeria’s real estate market has resisted disruption, with some of those startups eventually closing their doors. The website of Fibre, the pioneer startup that sent termination notices to tenants in 2021, is no longer reachable.
“We still have a business,” Adesanmi said, refuting any insinuation that the company may be winding down.
*This is a developing story
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