UAE PropTech Silkhaus raises $7.75m seed funding as it looks to emerging markets

Emirates' real estate sector opens up as a global asset class would help diversify the portfolio of investors, its chief executive says

UAE start-up Silkhaus aims to address the growing demand for short-term rentals across the region. Photo: Silkhaus

Silkhaus, a UAE-based property technology company, has raised $7.75 million in a seed round that makes it "well positioned" to execute its business and expansion strategy in the medium term, as well as contribute to boosting the portfolio of investors, its chief executive said.

The start-up, whose holding company is incorporated in Abu Dhabi Global Market, provides short-term rentals across emerging markets.

The UAE's real estate sector opening up would help diversify the portfolio of individual and institutional investors, Aahan Bhojani, who is also the founder of Silkhaus, told The National.

"Aside from investors purchasing real estate, we have seen a growing interest in the resident population seeking to reside in the UAE. The need for a 'landing pad' to accommodate incoming audiences has never been stronger," Mr Bhojani said.

Investors who participated in the seed round include Dubai's Nuwa Capital and VentureSouq, London-based Nordstar, San Francisco's Global Founders Capital, Singapore-based Yuj Ventures and India's Whiteboard Capital.

"We are well resourced with our seed investment to build a category-defining business. We are always open to welcoming future capital partners who can support us in globalising our business," Mr Bhojani said.

PropTech is the application of technology into the real estate industry, creating an ecosystem that encompasses anything from property management and bookings to construction and analytics, largely accessible using a mobile app.

The global PropTech market is projected to grow to $86.5 billion in 2032, from $18.2bn this year, at a compound annual rate of almost 17 per cent, data from Future Market Insights show.

Meanwhile, the short-term rental market has grown exponentially, as people increasingly sought more flexible and budget-friendly accommodations, especially with staycations becoming popular, largely thanks to Airbnb.

The rising trend of global nomads, or professionals who work from anywhere, has also fuelled demand for such properties.

The global short-term vacation rental market is projected to reach more than $256bn by 2030, from almost $100bn in 2021, at a compound annual growth rate of 11.1 per cent, according to Grand View Research.

Silkhaus said it has identified a total addressable market worth $13bn across the Middle East, North Africa, South Asia and South East Asia — the company's areas of operations — that would unlock opportunities for asset owners.

Short-term rentals would offer property investors flexibility in maximising returns on their investments in a "red-hot market", without being locked into long-term tenancy contracts, the company said.

The Covid-19 pandemic "significantly" disrupted the global and regional property market, changing the nature of how end-users interact with real estate and influencing patrons to pursue flexibility in living arrangements, Mr Bhojani said.

"The pandemic took everyone by surprise, which subsequently resulted in tremendous dislocation across the world. This stimulated the need for flexible living solutions," he said.

The same disruption has also been tapped into by start-ups from the UAE and the wider GCC, which has become a "fertile ground" for global scale-ups and a launchpad for home-grown businesses, attracting investors from around the world and, in particular, enhancing the Emirates' competitiveness in technology and entrepreneurship, Mr Bhojani said.

"Start-ups are woven into the very DNA of the UAE. There are many entrepreneurs and successful ventures that have been built as home-grown success stories and have emerged as leading regional businesses today," he said.

Silkhaus was founded in 2021 by Mr Bhojani and Ashmin Varma, and has grown tenfold over the past 12 months, the company said. It aims to address the highly fragmented real estate rental market and bring more properties online.