The trend of tech firms laying off employees continues. In 2022, 1,061 companies laid off a whopping 164,969 individuals, and by 2023, this figure had already risen to 262,682. Now, Nigerian property tech startup, Spleet, is reportedly preparing for layoffs in 2024.
The number of the 32 full-time employees that would be affected by the layoff has not been disclosed by the CEO, Adetola Adesanmi.
As with many African startups that have resorted to staff cuts recently, Spleet’s looming layoffs are attributed to Nigeria’s current economic climate. The startup, which raised $2.6 million in funding in 2022 from investors like MaC ventures and HoaQ Fund, provides its users with flexible housing rent payment plans and assists landlords in rent collection.
However, in light of the economic challenges engulfing Nigeria, landlords have begun to increase rents, causing strain on the startup’s business model. Evidently, the economic downturn has prompted potential tenants to reconsider their decision to rent houses, subsequently applying significant pressure on the company’s revenue stream.
In Nigeria, skyrocketing inflation and significant currency devaluation are driving property owners, some of who partner with Spleet, to seek greater returns on their properties. Many of these properties are in prime areas of Lagos and command high prices compared to the city’s average monthly earnings. From 2018, the property tech sector in Nigeria drew attention and funding, with companies like Fibre, Spleet, and Muster leading the way with a pay-per-month model that they believed would transform Nigeria’s housing market and address its concerning housing shortfalls.
However, Nigeria’s real estate market has proved resistant to such disruption, with a number of these startups eventually shutting down. Fibre, a pioneering startup that started issuing tenant eviction notices in 2021, no longer has an accessible website.
Despite the difficulties, Adesanmi maintained that Spleet is not heading towards closure. “We still have a business,” he stated, disputing any suggestion that the company might be winding down.
