• Thursday, March 28, 2024
businessday logo

BusinessDay

‘We think proptech is going to do more enabling than disrupting’

IMG_5671 (1)

IBRAHEEM BABALOLA, the CEO/Cofounder of Muster, an AI-powered peer-to-peer shared housing market place, in this interview with ENDURANCE OKAFOR, gives insights on how technology is going to impact Nigerian property market and also how Muster is helping young Nigerians solve their accommodation challenges as their basic salaries cannot afford them comfortable apartments. Excerpt:

Tell us about yourself

My name is Ibraheem Babalola. I am the Co-founder and CEO of Muster which has enabled people in Nigerian cities to have access to affordable housing. The company has also helped people that have spare rooms in their apartments to be able to earn money on this spare rooms that would otherwise have been used as  guest room, or packing store to earn income, especially at a time when the economy is recovering and people do not mind alternative sources of income.

Muster is a new entrant into Nigerian property market. What gave birth to the idea behind it?

Muster was something that needed to happen. If we didn’t roll out Muster at the time we did, I am sure some other people would have, because the problem was evident, and the opportunity was there. There was a problem of  income versus rent mismatch, which meant that the average rent was higher than the average salary. Credit Sales reports that the average rent of Nigerians between 20-35 years of age is around $230 monthly and the average price of one bedroom in mega cities like Lagos, Abuja and Port Harcourt is around $300 per month. This means that a lot of people cannot afford to rent by themselves.

Also, there was a problem of the upfront annual rent requirement which meant that the product would break those payments into monthly payment, because a lot of the people earn their salary on a monthly basis.

There was also the problem of not-fit-for-purpose development, because property developers continued to develop properties for families, the 3 bedroom, four bedrooms, without thinking of the single young Nigerians that were just starting out in their career and needed just enough space to lay by.

What this also meant was that the people that absolutely had to rent these large apartments, had spaces that they were not using and those spaces are what they now put on Muster and earn income on them  by renting them to verified people in the Muster community.

There is also the problem of rapid urbanization. World Bank says that to take care of people that come into cities every month, we need to build cities the size of New York every month and it is impossible. But what we can do is to optimise the available resources by co-living and co-working.

Muster enables co-living to happen in a way where it’s safe,  verifiable and affordable as well. So there is an economic impact that the company has on the demand side of people that are looking for rooms and on the supply side of people that have rooms as well. There is also the benefit for property developers and managers because we can guarantee rental income them.

We have a wait-list that has over 3,000 people. If you build a development that the price makes sense they can be filled in a week from our wait-list.

How do you verify people before putting them on Muster community?

We have an algorithm for matching that suggests and says,  for example, Mayowa would be  a good match based on what she’s  learnt about you. Our system learns about users and, based on that, it is able to make recommendations on rooms or flat-mates and so on.

We have built Muster in a way that the entire process and experience is detected by the user. They have total control of where they want to leave, who they want to rent to,  who they want to rent with,  how much they want to pay and how much they want to collect, how they want to pay; whether it’s monthly, quarterly or annually  and how they want to collect rents, whether it’s monthly, quarterly or  annually. The entire  experience is on them.

Before you even get to that stage, Muster does a multi-level verification  for every user; whether you have a room and whether you’re looking for a room or whether you’re a property manager. Every user that goes on Muster has to upload invalid form of government ID,  which is then verified on this government database if it’s driving licence, it will verify it on road safety database and if it’s passport with immigration.

So how has the journey been so far?

The journey has been great so far. I think one thing that we never had issue with is on the demand because the problem is evident. A lot of people want affordable rooms. Muster cuts-off quickly on the demand side; the supply side takes a bit longer  because there needs to be some kind of education on the part of telling apartment owners that they  can make money from their  spare rooms and there will always be the security questions.

So the reaction is on both sides.  The reaction for the people that are looking for the room when they found out about Muster was excitement. You could hear them say, ‘yes I can finally go and live in a place where I don’t have to journey for 5 hours to get to my work place’.

The reaction on the other side for the people that had the room was curiosity. What you hear from people on this side is, ‘oh, ok this makes sense; I can make money from this room that is idle;  as a property manager I can rent my apartment to these two young people but are they verified and how am I sure who is coming into my apartment; how am I sure he is going to be able to pay, how  am I sure.  So it’s more curiosity than excitement on the side of the supplier and on the side of the people that have rooms. But what we have seen is that once they move on from that curiosity to understanding the product, they get very excited and they become more repeat users.

How many Nigerians have you helped solve accommodation challenges?

We have done over 600 rented rooms in just over a year and we have thousands of users on our platform and that’s not bad. We are going to do more with acquiring supply this year so that we can move people from the wait-list as we currently  have over 3000 people waiting to get apartments.

Muster emerged as BusinessDay business idea of 2018; how do you feel about that?

I think that was very honouring, particularly because we had no idea that was happening. We just found out about it in the papers.  The most honouring part of it was that it was after the nomination that  it was made open to the public to decide which business idea won it.

It is very touching and honouring to know that people look at  Muster in that way and say, oh this is our business idea for 2018 that this company has had as much impact, particularly when you look at other companies that were nominated for the award.

Going forward, how do you see technology impacting Nigerian property market?

I think, generally, technology is going to affect all sectors  of the Nigerian economy, from Fintech to proptech, medtech to whatever name you want to call it.

I think that there is a lot of proptech innovation that is springing up every-day because there is clearly a problem in that space that you can use tech to solve or to help make me better and Muster is leading the chart in innovations. We think that propptech is going to do more enabling than disrupting.

 

ENDURANCE OKAFOR