In French, the word “rever” means dream. It is perhaps a romantic name for a startup tackling a relatively tough sector: Vietnam’s opaque real estate brokerage industry.
Based in Ho Chi Minh City, Rever emerged as a promising proptech firm recently. It secured a USD 2.3 million in funding earlier this month from Singapore’s Golden Equator Capital and Korea Investment Partners, on top of a USD 4 million investment from VinaCapital Ventures in June.
Investors remain optimistic that Rever’s online-and-offline business model can succeed in the fragmented Vietnamese market, just as the decacorn Lianjia did in China. “We are not aiming to be super innovative or to change the world,” said Rever co-founder and CFO Phan Nhat Minh. “We just see a gap in the real estate brokerage industry and how players in other countries have tried to fill that gap.”
Trust issues in real estate brokerage
Minh, who previously worked as a strategy manager for Grab and a consultant for Ernst & Young, was part of a team of experienced Vietnamese tech entrepreneurs joining Rever when it was founded in 2016 by Manh Phan, a former marketing head of Zalo, Vietnam’s popular homegrown messaging and social platform.
The country’s real estate market is often riddled with scams. Trust in real-estate brokers is generally low in Vietnam, and people are often bombarded with spam messages and calls from agents. News reports about real estate scams often mention land fever as the consequence of brokers releasing false information. Only 10–12% of roughly 300,000 real estate brokers in Vietnam have gone through some kind of relevant training, according to local newspapers citing statistics from Vietnam Real Estate Association.
Rever, which operates in primary as well as secondary real estate markets, leverages technology to provide transparent information about real estate projects and assigned agents. All listings are vetted, while interactions between agents, buyers, and sellers are recorded. Transaction data also helps limit fraud cases, according to Minh.
In addition, Rever also provides real estate developers with support, such as image-marketing solutions and virtual reality 3D models, which in return helps customers decide which residential projects they want to visit. Rever also leverages the data it has to classify and target customers who actually are seeking new living arrangements, eliminating the issue of unwanted calls and messages from agents.
However, Minh said as real estate transactions are undoubtedly complicated, the offline component is also hugely important to maintain trust between all parties involved. With that in mind, Rever has set up five services centers in Ho Chi Minh City, and the company will use recent funding to open 30 others and expand to key cities in the next two years.
Educating agents and competition in proptech
Minh acknowledged one of the most common concerns is that agents can leverage information and transaction data on the Rever system and conduct their own transactions offline. But as he said, “All transactions are recorded online and we can monitor, for example, if the deal is gone even after the process has come to the negotiation stage.”
The key is to ensure that agents can see the benefits of staying productive within the Rever brokerage system. Efforts have been put into educating agents through its Rever Academy, which offers courses ranging from negotiation techniques in real estate to language for sales.
“In the future, we will also roll out functions allowing customers to assess the agents. We want to make sure that customers’ satisfaction are taken into account when it comes to determining the level of commission paid out to agents,” Minh explained. “From the customers’ point of view, it’s also more insured to conduct transactions within Rever because a real estate transaction is often one of the biggest investments in their lives.”
Rever reported over USD 1.5 million in revenue in 2018. The company expects to triple that in 2019, having done almost 1,000 transactions year-to-date. The proptech startup is aiming to generate profit within the next 36 months. In 2017, according to Minh, Rever closed only 200 transactions and the burn rate was around USD 800,000. By the end of the third quarter this year, Rever has closed more than four times the number of transactions in 2017 while maintaining a level burn rate.
Minh does not comment on competitors, adding that Rever will focus on creating “tailored and packaged services” and avoid burning money to seek market share. Besides Rever, there are other tech-enabled brokerage startups operating within the growing popularity of Vietnam’s proptech sector, such as LinkHouse or Propzy. According to a report released by real estate services firm JLL in July, the most notable segments of proptech in Vietnam are related to residential markets in listings and marketplaces, tech-enabled brokerages, leasing and renting, as well as property management.
The report notes that the prospects for proptech in Vietnam are still positive “despite inherent barriers arising from a traditional mindset and the high requirement for trust in the real estate industry,” driven mostly by young demographics and a tech-savvy population. One well-known example is the listing site Batdongsan.com.vn, which was acquired by Singapore’s PropertyGuru in 2018.
This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in South and Southeast Asia.