Property Flash


August 31 2023

LeaseSurance, a fresh InsureTech platform underwritten by Bryte, has raised R3m in a seed financing round led by FedGroup Capital. The funding will help LeaseSurance’s to enhance SA’s real estate ecosystem through its innovative lease insurance offering by expanding its team, and developing technology solutions for the industry.

LeaseSurance offers lease insurance for some of the country’s residential operators and asset owners. The product has benefits for tenants and landlords alike, especially in a country characterised by low GDP growth, high unemployment, high inflation and interest rate, all of which place pressure on tenants.

Traditionally, landlords relied on cash deposits for protection against tenants defaulting as a result of these pressures.

“Unfortunately, though, the usefulness of a cash deposit has limitations. Cash deposits present administrative challenges and limited protection against rent loss and damages, creating financial constraints for both tenants and landlords,” said Paul Schaefer, CEO of LeaseSurance.

LeaseSurance’s B2B, tech-driven lease insurance addresses these concerns for landlords by reducing the administrative burden, replacing cash deposits with affordable monthly fees, and lowering bad debts. As a result, landlords gain up to five times more protection, resulting in an improved Net Operating Income (NOI) for their properties, according to Schaefer.

The solution also makes it possible for landlords to remove current barrier concessions such as discounts and lower deposits.

FedGroup Capital’s investment in the company sets the stage for the company to build on this offering. “This is an exciting development for us. It comes at a time when we are ready to take our product to the next level,” Schaefer said.

Sheldon Friedericksen, general manager of Fedgroup Private Capital, said that Fedgroup was impressed by LeaseSurance’s commitment to innovation.

“LeaseSurance has created the foundation for an end-to-end enterprise InsureTech property platform which resonates with Fedgroup’s 30 plus years’ experience in the property industry. Our investment will be used to continue to build the solid foundation required to grow this truly exciting and much-needed solution in the property sector. With this investment, LeaseSurance now forms part of the broader property ecosystem within Fedgroup. Our curated network of providers allows us to unlock value in assets and support property owners and their tenants, while reducing waste through the provision of utility management services that incorporate smart technologies around water and energy,” he said.

Wim Morland of Bryte Insurance Company Limited, which underwrites LeaseSurance’s business, said the company was proud to be associated with an organisation which is at the forefront of innovative property and insurance solutions, and continues to look for ways to advance further.

“This investment equips LeaseSurance to enhance its product offering, creating even more advantages for tenants and landlords alike,” he said.

LeaseSurance was established in 2020. Since then it has amassed clients including leading JSE listed residential landlords and other large, privately held property groups.

“We are looking forward to providing an even better service for our client base. We are extremely excited to have FedGroup on board as our partners as we enter the next stage of our journey, and work towards our ambitious goals. FedGroup’s domain experience in the insurance and property markets is a significant advantage, and the funding positions us to lead the business into its next phase,” Schaefer said.

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