Woh Hup unit launches VC fund, invests in co-living startup

Singapore

WOH Hup unit Aurum Investments has launched a double-digit multi-million venture capital fund, and invested US$1.5 million in seed funding in co-living startup Hmlet.

This comes amid a growing trend of traditional property firms dipping their toes into property technology, or proptech.

The Singapore-based corporate venture capital fund is seeking out startups that are tech-focused and scalable towards local and regional real estate opportunities. Hmlet is its first investment.

Set up in 2016, Hmlet runs co-living spaces where young working professionals can rent rooms and apartments at affordable prices, with a minimum commitment of three months.

Hmlet also uses technology to integrate personality matching tests to ensure compatibility between members sharing the co-living space.

Hmlet's flagship offering in Singapore is a 7,000 sq ft space in a building along 339 Joo Chiat Road. Since its opening six weeks ago, it has already reached 95 per cent occupancy. Across Singapore and Tokyo, it operates more than 60,000 sq ft of space, 80 per cent in Singapore and 20 per cent in Tokyo.

The startup also has more than 170 members and made a revenue of more than S$1 million last year.

With this round of fundraising, Hmlet plans to expand to Hong Kong and Osaka next year.

Aurum has helped Hmlet to get connected to more investors and real estate partners in Hong Kong to accelerate its growth in Asia.

In return, going forward, it said that Hmlet's model of co-living can possibly be incorporated into boutique developer Aurum Land's future developments - such that some units are retained to reap long-term rental revenue through Hmlet's co-living platform.

Michelle Yong, the fourth-generation leader of Aurum, and niece of Woh Hup executive director Eugene Yong, said: "As property developers ourselves, we've observed the increasing need to integrate technology into day-to-day spaces to increase productivity and efficiency of brokerage and leasing transactions, to allow owners to focus on face-to-face interactions."

Ms Yong also co-founded co-working space, Collision 8, with seasoned entrepreneur John Tan.

Right now, Aurum is in talks with two other startups that are focused on making construction management, building and design processes more efficient through technology and cloud-based solutions.

"Given that Aurum is a subsidiary of Woh Hup, where construction is the core business, investing in such companies would also mean that Woh Hup and its subsidiaries such as Aurum Land would also benefit from being at the forefront of best practices in construction," she said.

"We're focused on the future of people, so funding is just one part of the equation. Our trusted network of communities - across co-working, residential developments, co-living, health and wellness - will play a large role in creating pathways for these startups to succeed as profitable and sustainable businesses."

Besides seed funding, Ms Yong is also keen for Aurum Investments to play angel investor and incubator roles in developing the proptech scene in Singapore. She targets for it to invest in two to three such businesses a year.

According to research from JLL, proptech startups in the Asia-Pacific have surpassed their counterparts in Europe and the United States by raising around US$4.8 billion in funding since 2013, out of a total global pie size of US$7.8 billion.

The JLL report also forecast that proptech funding in the region will grow to US$4.5 billion a year by 2020.