Lagos-based real estate start-up ToLet.com.ng closed a Series A round of funding worth $1.2 million U.S. with Frontier Digital Ventures.

“The funds raised will be used to improve the platform’s technology offering to both property seekers and listing agents. The rest of the funds will be channeled into improved marketing efforts and aggressive expansion across Nigeria in the next 12 to 18 months,” said ToLet’s CEO Fikayo Ogundipe.

It was founded in 2012 as Estanode.com by four graduates fresh from Obafemi Awolowo University (Fikayo Ogundipe, Sulaiman Balogun, Dapo Eludire and Seyi Ayeniwith) with combined, personal savings of $400 U.S.. In 2013, it received $230,000 seed money from Jason Njoku’s tech-businesses accelerator Spark.ng, then rebranded to ToLet.com.ng. Since then, the start-up has quietly grown into one of the leading and prominent real estate sites in Nigeria.

ToLet co-founders (L-R): Seyi Ayeni, Sulaiman Balogun, Dapo Eludire and Fikayo Ogundipe.

ToLet co-founders (from left): Seyi Ayeni, Sulaiman Balogun, Dapo Eludire and Fikayo Ogundipe.

“Our agents stick with us, because we collect commission – unlike our competitors, who use subscription models.

“In essence, that makes our service a performance-based one. So, we don’t get paid unless our agents get paid.

The commission model is the same model as generally used by Nigerian real estate agents.

“Our research showed that Nigerian real estate agents prefer the model of sharing commission on closed deals to paying subscriptions which don’t bring guaranteed returns,” said co-founder Balogun. Commenting on the fresh investment, Spark.ng co-founder Bastian Gotter said, “We…welcome FDV to the ToLet.com.ng family as a long-term thinking, and very knowledgable partner.

“We believe this capital injection will give the ToLet management team the scope to scale. It also recognizes what they have achieved already.”

Talking about the capital raise, Shaun Di Gregorio, founder and CEO of FDV, said: “We have full confidence in the ability of the founding team to continue with the awesome job they have already started, and look forward to ToLet’s consolidation as the No. 1 real estate site in Nigeria.”

From inception to today, ToLet.com.ng has facilitated transactions together worth more than $8 million U.S.. It currently has roughly 20,000 listings online, posted by more than 3,500 estate agent clients.

Despite a recession being officially declared by Nigeria’s statistics service, the value of real estate services still grew by 2.12 percent in Q2 of 2016 from Q2 last year. The sub-sector real estate services contributed 8.6 percent to the country’s nominal GDP (wealth created) in Q2 of 2016, the statistics service said.

FDV is a Malaysia-based investor in young classified companies in emerging markets. For instance, last year it invested $500,000 in Ghanaian real estate classifieds start-up MeQasa. Other investments were made Panama’s general classifieds Encuentra24.com and Pakistan-based real estate site Zameen.

Here is FDV’s portfolio of investments in 16 brands.

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