Economic Strain on Spleet
Spleet, a Nigerian property tech startup that secured $2.6 million in funding in 2022, including investments from MaC Ventures and HoaQ Fund, is set to lay off a portion of its workforce due to mounting inflation and price hikes from partnering landlords.
Impact on Workforce
The layoffs, affecting an undisclosed number of employees, particularly those not directly involved in core operations, come as Spleet grapples with the financial strain imposed by external economic factors. Although the company has refrained from divulging specific details regarding the layoffs, it acknowledges the necessity of making difficult decisions amidst challenging circumstances.
Spleet's Value Proposition
Founded in 2017, Spleet offers Nigerians an alternative to traditional yearly rental agreements by facilitating monthly rental payments, thereby providing greater flexibility in managing finances. Operating on an asset-light model, Spleet leases properties to streamline the rental process for tenants.
Pricing Pressures
Spleet's CEO, Adetola Adesanmi, attributes the layoffs to the sharp increase in rental prices imposed by landlords, ranging from 0.8 to 2.2 times the previous year's rent. This surge in prices has rendered many tenants unable to afford the new rates, prompting the company to restructure its workforce to sustain its operations.
Response to Economic Realities
The decision to implement layoffs was communicated to employees during an all-hands meeting, with company executives acknowledging the challenges posed by prevailing macroeconomic conditions. Despite reports of revenue decline, Spleet remains steadfast in its commitment to weathering the storm and ensuring its viability in the market.
Industry Landscape
Spleet's experience reflects broader challenges within Nigeria's property tech sector, which has struggled to disrupt the entrenched dynamics of the real estate market. While startups like Spleet, Fibre, and Muster have introduced innovative pay-per-month models, the sector continues to face resistance, with some startups eventually shuttering their operations.
Looking Ahead
Despite the current economic headwinds, Spleet maintains optimism about its future prospects. Dismissing speculations about the company's potential closure, Spleet's leadership affirms its ongoing commitment to navigating challenges and sustaining its business operations amidst evolving market conditions.
