Flow is a South African proptech marketing platform which enables real estate agents to automate their marketing efforts. Fresh off a $4.5 million funding round, the startup has its sights set on the European and American proptech markets.
TechCabal had a chat with Gil Sperling, one of the co-founders of Flow, about their unique product offering, how they have fared in the South African market, how they plan to penetrate the competitive European and Americas markets, and much more!
TC: Tell us a bit more about Flow and the problem you are solving with your product offering.
GS: Before Flow, my partner and I had an adtech business which we successfully exited to Publicis, a listed French communications company. That business developed technology that automated marketing on Facebook and Instagram, but for big brands. Through that, we realized that this ad technology, effective as it was, was serving big businesses only and not small entrepreneurs like real estate agents.
My partner and I started Flow to help real estate businesses grow and market themselves in the way that any other business can. Real estate is unfortunately very archaic and fragmented. Real estate agents, who today are a big part and will always be a big part of helping people find a home, cannot reach buyers and sellers on channels that all of these other companies can and have been for the last decade i.e. digital channels and social media.
Other businesses do grow relationships and trust with consumers on these channels, it’s a critical part of their marketing and growth, but real estate agents just cannot.
So, our product is essentially a proptech marketing platform that enables agencies and property developers and agents to market themselves automatically to reach people on these digital channels.
TC: What challenges has Flow faced trying to solve this problem in South Africa?
GS: Fundamentally, the property sector is very tough to transform for the better because of its many moving parts and fragmentation. We are dealing at scale with thousands of agents and hundreds of officers and so there’s an education gap that we have to solve. And we do as much as we can to enable the industry by educating in this regard. So there is a paradigm shift that we are challenged with, but we are forging ahead.
Although if you look at the past five years, it has dramatically shifted and grown. South Africa is still relatively conservative and has a small capital market. We are grateful for the growth but unlike a more buoyant capital market like the US, or European markets that actually support the prop tech sector specifically and have the capital that goes behind proptech, South Africa does not and so it’s a challenge for us.
And then of course, there is the technology that we’ve built to solve this problem and like any tech startup company, we go through iterations of it, we release products all the time hoping that it solves problems. And many times it doesn’t.
But through all these challenges, we see an opportunity to offer workable solutions through our product offering in making real estate transactions much more efficient and quicker for agents.
TC: Flow recently raised $4.5 million. How will this contribute towards your global expansion ambitions?
GS: We are going to use the funding in two ways. We’re going to double down on our product by growing our engineering team. We have a lot to develop and build and that’s where a lot of the funding is going.
We also have a global growth strategy which actually relies more on B2B distribution where we integrate with property portals globally and enable them to create off-site ads and provide social media exposure for their agents.
So it’s a huge value add enabler for the portals, and that’s how we will be growing overseas. And apart from all that, there’s marketing, growth, sales, business development that we’re investing the funding in.
TC: Raising capital in a VC downturn is no easy feat. Do you feel like that feat validates your business model?
GS: Absolutely. I think it’s really under these circumstances where real diamonds are forged. We do find it very validating. Because I think as the capital is dried out and it’s more conservatively deployed, it will only be invested in companies that are more investable.
TC: Please compare and contrast between the South African and Australian markets where you are currently present and Europe and the Americas where you plan to expand to?
GS: So the one thing that is common is that they all still have real estate agents that are an important part of buying or renting a property. And that is because it’s such a huge transaction, as we discussed earlier. It is also meaningful, stressful, and emotional, and you’ll always want to deal with a person who is an expert, rational and can guide you through such a huge transaction.
So as much as technology is revolutionizing and transforming industries, in an industry like real estate, the agent is not going away. They are getting augmented and enabled with technology. So that’s the world we will see in Australia and Europe, as we expand.
But where the markets differ is that some of the markets are way bigger, for example, Australia, which is why it’s an interesting market for us. In Australia, when you sell a home, the seller is the one that puts out the marketing and spin to sell their home. It’s a market where there is way bigger demand than supply, especially in the metros.
In Johannesburg, for context,there’s a big oversupply in some areas in which time changes the dynamic. In Australia, it’s way more demand and much smaller supply. Sellers are putting out between $5,000 to $10,000 of marketing collateral, which makes it a far richer market, but also a competitive market.
TC: Europe and the Americas have stiff proptech competition. What will set Flow apart from the rest of the competition?
GS: I think there’s a few things. Number one, we have quite a focus on the design of our marketing collateral because we understand these channels well and what catches the consumer’s eye and prompts engagement. Also, with regards to automation of these ads, our technology appears to be quite superior to the competition. It lends itself to integration with most portals, whereas a lot of the competition does not. So I believe that we will grow faster in that way.
Also, my partner and I have been in this industry since its inception, since Facebook was a baby. And we’ve been a big part of that journey. And so there are very few people globally that have the experience that we have in this industry and that is an asset for us.
TC: What is your forecast of the most prominent proptech trends over the next year?
GS: Buyers and sellers are going to see digital channels really start being used to build trust and find agents and property. We see that people will be using these channels much more to build a relationship and find homes.
Also, the digital experiences are going to be more and more immersive, like virtual tours, and other means. I guess beyond a year from now, you’ll probably end up experiencing your new home in a digital format, before you even go out to see it rather than just pictures.
Another trend I anticipate is that real estate agents who are more tech savvy and adopt more technology, like automation of their marketing flow and better CRMs, when it comes to lead management and so on, are going to fare better and grow much faster than other more traditional agents. The experience for an agent and a buyer is also going to become better because they’ve been targeted and matched more accurately.
TC: Lastly, are there any product features launching soon on Flow that you would like to give our readers a sneak peek into?
GS: There is a large roadmap. We are working on automation for more channels like Tiktok and digital-out-of-home which we already do but are scaling. Imagine an agent who has a little bit of marketing budget but has no skill or time to do marketing, nevermind an outdoor billboard. We will enable them, in two clicks, to list their profile and have their face on a big board in a busy street in the middle of the city.
So yes, those are some features we are working on. There’s some other juicy stuff in the pipelines that I can’t talk about now but will share in the near future!
Note: Interview has been slightly edited for clarity