Why did you become an entrepreneur?
I started my career as an investment banker and, for 18 years, worked with large international investment banks such as Citigroup, Credit Suisse, Goldman Sachs… During COVID, I had time to reflect on what to do next because I needed a change. I wanted to build something in tech, but in [an industry] with a large market share. Real estate is the largest asset in the world and in the region but very little has been done in PropTech, which attracted me. I saw a big problem that required a solution: A lot of people’s wealth in the region is tied into real estate but, today, they don’t have tech solutions enabling them to manage that wealth. Coming from a finance background, I could help solve that problem.
We established the company two years ago and spent the first year building proprietary technology focused on giving value to landlords. Then, we started thinking about the tenant perspective as well. Last July, with our own equity money, we ran a pilot that got an overwhelming response from tenants – with one press release, we got over 7,500 applications. That’s how we realised that we could give value to both sides.
What services does Keyper offer?
We do end-to-end services for landlords. We help them acquire a property, with the handover, the snagging, the mortgage if needed, the insurance… Then, we have property management and maintenance services.
And we offer rent facilitation services. In the UAE, more than 95% of rents are paid by cheques, and most tenants have to pay in one, two, or four cheques. But these tenants get [a salary] on a monthly basis; paying their rent on a monthly basis too could be ideal for them. Our solution allows them to do just that. We allow for three different scenarios: The tenant can pay the year’s rent in 12 cheques while the landlord gets all the year’s rent upfront; the tenant can pay the year’s rent in four cheques while the landlord gets all the year’s rent upfront; and the tenant can pay the year’s rent in 12 cheques while the landlord gets four cheques. We take the default risk on behalf of the landlord.
This solution is very capital-intensive. How do you finance it and how do you manage the risk of the tenant defaulting?
$56 billion was paid in rent last year in Dubai alone; so, even if only 10% of tenants wanted to pay on a monthly basis, it would require about $5 billion of funding. Now that we’ve seen the demand for our solution through the success of our pilot, we’re raising money. Three VCs have committed to help fundraise us, and we’re talking to private debt providers. We hope to close this quarter being able to increase the amount of funding we can do significantly.
FinTech players, the Tabbys and the Tamaras of the world, have laid out a very successful path for Buy Now, Pay Later, which we’re replicating as Rent Now, Pay Later where demand is higher due to larger ticket sizes and rent being the largest expense of any household.
As for the default risk, default rates are usually low in rent payments because people don’t want to be out on the street. We still manage the risk by embedding ourselves in the lease as the property manager – that’s why we have a property management license. It gives us the ability to evict tenants if they don’t pay their dues within 30 days, in line with government regulations. We also have one month paid upfront, access to the security deposit, and the ability to re-lease the property and make an additional commission from the incoming tenant to recover any losses.
What are your different revenue streams?
We have a brokerage license, taking traditional commissions on transactions, and we have recurring income from property management, under which rent facilitation comes.
On property management, we actually charge less than traditional companies that usually charge between 5% and 10% of the rent. We have a fixed fee of $1,000 for apartments and $1,500 for villas, because we don’t believe you should be charged more if the rent doubles from one area to another.
One major issue in real estate is the lack of transparency and access to data. How do you address that?
People are driven by emotions rather than data when it comes to real estate, and they’re not well served by agents who focus less on what [their clients] are looking for and more on selling them [properties]. A lot of data is shared by the Land Department today, but few investors use it, or know how to use it, to make informed decisions.
So, we’re trying to apply to real estate the same equity research type of mechanism that you use when you buy stocks. We mapped out over 750,000 properties in Dubai and use the latest transactions and listing sites to create a live valuation accessible through our free app. We also create research reports that can even be building-specific, so investors can see how their properties are valued, where the rents are, and how they compare to the neighbourhood or other neighbourhoods.
How large is your property portfolio at this stage?
This year has been about scaling up. We have 400 properties under management and 2,600 properties valued at AED 6.5 billion on our app, which a lot of people use to manage their property themselves.
How has your entrepreneurial journey been like so far?
It’s been exciting. It has its challenges – as a founder, you underestimate how much work it is to run a company. Everyone thinks it’s easy but it required building a team and a tech from scratch, funding, marketing, strategy, operations… There are a lot of moving parts and the first year is the hardest, but it’s all worth it.