Disclaimer: This entry is part of KrASIA’s collaboration with Project Alpha of Amazon Web Services (AWS) and Singapore-based venture capital firm SeedPlus, featuring high-potential startups in Southeast Asia.
Cathy Tran focuses on a niche portion of the housing rental market in Vietnam that she describes as the “nobody cares” segment: affordable rentals for young people aged between 19 and 30. Her startup, called Ohana, helps young college students and professionals find affordable accommodation without the stress usually associated with the process.
“We match the right tenant with the right landlord and we have many ways to support both sides even after the deal is done,” Cathy Tran, CEO and co-founder of Ohana said to KrASIA in Ho Chi Minh City, Vietnam’s biggest metropolitan area and where Ohana is based. “We like to think of ourselves as consultants, not brokers.”
The idea for Ohana came after many years of studying and living abroad, when Tran returned to Ho Chi Minh City in 2016 and struggled to find the right place to live.
There are a number of factors that need to be taken into consideration before deciding to rent a place: pricing, utilities, furnishings, housemates, and the location, to name a few. On top of that, there may be risks involved in the process of being a renter, specifically safety and legal issues with landlords.
In mid-2017, following several months of market research, Tran’s team identified that the demand for low-priced housing and room rentals was growing in Ho Chi Minh City, a city of 8.6 million people where hundreds of thousands of youngsters from neighboring provinces flock to for school and work. The company decided to focus on dormitories or rooms that are priced at less than 5 million VND (USD 217) a month.
Tran said that Ohana started out as a web-only application, using questionnaires to match tenants with landlords. It attracted 16,000 users within three months, allowing Ohana to raise about USD 75,000 from an accelerator program of Telstra, Australia’s largest telecommunications company. After the mobile app was launched, the company bagged another USD 350,000 in funding from angel investors in Singapore. “It enabled us to create a working mechanism through AI-powered technologies to work with landlords and tenants more effectively,” she said.
All listings from landlords must meet specific requirements from Ohana and be verified by the company through means like Skype and interviews with landlords. Property owners also need to provide photographs that match the description of the room or house. Ohana can arrange for tenants to view the property through SMS to save time for both landlords and tenants.
Tran believes that Ohana has greater competitive advantages compared to Facebook groups and other real-estate advertising sites, because Ohana’s processes are “data-driven,” vetting both tenants and landlords while protecting the safety and privacy of both parties. Ohana generates revenue by charging landlords listing fees and 30% of the first month’s rent.
Unlike real estate brokers, Ohana “would never try to have something rented out at all cost,” Tran said. The Ohana team also monitors each listing’s performance and will advise landlords to add new features and information to make a listing more appealing to future tenants.
“We have shown landlords how they can make small changes in their furniture inventory to increase their occupancy rate as well as room value. For example, adding bunk beds can increase 25% of room value per bunk bed or adding a kitchen shelf can increase their room value by 10%,” Tran said.
Even after a deal is done, Ohana staff or freelancers will pay visits to both the landlord and tenant to provide additional support if needed.
In October 2018, Tran participated in the Vietnamese version of the popular TV show Shark Tank, where start-up founders pitch their business ideas to potential investors. The investors on the show agreed to pour in USD 150,000 in Ohana, but Tran said that she rejected the offer.
“We were on different paths. I wanted Ohana to focus primarily on the low-priced segment of the market, but the investors wanted to concentrate on the high-priced and high-end real estate market,” Tran said.
She said Ohana started generating revenue in May, reaching 2,000 listings and 100,000 rooms after two years. The startup is experimenting with new services, such as Ohana Homes, a franchising service for landlords who lease their rooms and property to Ohana, which in turn rents these out and manages them.
Ohana is also looking to engage both landlords and renters in the long run. In workshops, the company provides informative content on the real estate market’s low-end segment. Topics range from effective communication solutions for landlords and renters, to trends in the renting market.
There are also plans to work with partners to provide services that most renters need, such as relocation, housekeeping, or maintenance, setting the foundation for Ohana to become the all-in-one rental platform for mid-range accommodation in Vietnam by 2021.
This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in Southeast Asia.