The commercial real estate brokerage market in South Korea is fragmented, making finding a new office a challenge for tenants due to incorrect listing information, high brokerage fees, and complicated paperwork. A Seoul-based proptech startup called R Square Created a data-driven platform to digitize the process, enabling tenants to compare multiple properties and find an office.
Startup raises $72 million (85 billion won) Series C round from single backer STIC Investments, JonWoo Lee, CEO R SquareSaid in an interview with Nerdshala. The latest funding raises its total to approximately $95 million.
Lee said Rupee will spend the proceeds on advancing its AI-based proptech platform, accelerating the brokerage service of its commercial building transactions and fulfillment centers, and expanding its workforce to 400 employees by next year. It has 354 employees as of October.
The Seoul-headquartered company plans to make further investments in the proptech sector in South Korea and Southeast Asia, including Singapore, Vietnam and Indonesia, Lee said. Rupee has invested in a Vietnamese proptech startup Propsy and an Indonesian proptech company in 2020 mamikoso in 2019.
Lee said Russquare, which opened an office in Vietnam in June, is set to enter Singapore this month and Indonesia in 2022.
Founded in 2009, Rsquare launched its office brokerage service in 2015 to help startups find office space and has since expanded its platform to serve small and medium enterprises (SMEs) and large corporations. In 2016, the company established a wholly owned subsidiary, Rs Square DesignIn the wake of $3.8 million Series B funding from Yahoo Japan Capital and SoftBank Ventures Asia to provide office interior design services.
Lee explained that the key difference to Rupee is its commercial building data, which includes information on office landlords and tenants, the startup has gathered since its launch. Rusquare claims to have collected data on more than 120,000 commercial building data across 50 locations in South Korea and about 10,000 commercial properties in Vietnam. Its real-time database provides detailed information and according to the company reduces time and costs by more than 50% compared to traditional commercial brokers. R Square Handled over 10,000 office brokerage transactions with over 21,000 clients in South Korea.
The pandemic has been hard on the commercial real estate market globally. Lee said the pandemic-battling rupee was also recovering quickly as several Korean companies began reopening their offices from the second half of last year. The company posted revenue of $55.2 million in 2020 and $85 million in the past eight months. According to the company, due to the easing of the COVID-19 lockdown, Rsquare expects to double its revenue by the end of 2021 compared to last year.
As for its exit plan, RuPay doesn’t plan to go public anytime soon; Lee said it wouldn’t happen in two years. The company was approached for M&A by global strategic investors, including WeWork, about two years ago, but did not find a rapport with them at the time, Lee said when asked about its M&A prospect. Lee said Rupee Square will focus on expanding its business and entering overseas markets for the next two years.