Its key product, Dongnae FLEX, offers short-term, fully-furnished rentals with low deposits, appealing to fresh graduates or travelers unable to cough up the hefty deposits typically required of Korea’s apartments.
Former WeWork executives Insong Kim and Korean-American Matthew Shampine founded Dongnae in 2020. They are “Making it a better experience for the brokers, for the landlords, and especially for the tenants,” Shampine said in an interview.
Dongnae has welcomed local and global investors. Its $21m series A funding round in March included Lyft and Doordash backer NFX, Airbnb backer MetaProp, and Korea’s oldest investment fund Daol Investment and Hana Financial.
More than 80% of Korean household wealth is in real estate, but it’s increasingly harder to become a homeowner. In Seoul, South Korea’s capital and most populated city, the average apartment price doubled between 2017 and 2021.
The startup company began as a listing platform for renters to book agency visits, but it was unsuccessful. Shampine believes the business model’s early failure generated “good and healthy” but painful reflections. According to Forbes, conversations with customers, brokers, and team members on the ground informed Dongnae’s goal of “becoming the supply, instead of hunting for the supply.”
The firm switched to serviced apartments in July 2021. At the end of its current investment, the business had 60 apartment buildings; now it has 80 across 12 Seoul districts.
Dongnae wants to offer more home services to its residents in the future, taking advantage of Korea’s booming market for furniture and other lifestyle goods.