Dropped capital round - Aiming for positive cash flow

Read the article in Finansavisen here [Only in Norwegian].

I see a lot of opportunities

“We thought we would need to raise more capital to get to where we are today. However, due to strong sales figures and good response from customers, it has not been necessary. The last time we raised money was in May 2022, and since then we have managed to get a lot out of little,” says Kristoffer Lundquist, CEO of Propely.

The company provides software for property management. It should provide the insight needed to optimize buildings and properties.

"Eiendomsappen" (its previous name) was started in 2019, when the entrepreneurs were 19 years old. Kristoffer Lundquist started the company together with co-founders Steinar Halvari Seim and Ole Ekern.

Despite the young age of the entrepreneurs, they cooperated with industry players early on

“We have created a software platform that makes building management more seamless. I find it almost difficult to find a market with greater potential,” Ekern has previously stated to Finansavisen.

All three work full-time at the company, which has now come up to 18 full-time employees. Ole Ekern is responsible for operations, while Steinar Halvari Seim is responsible for growth. The ambitions are big. Two years ago, Lundquist talked about the inspiration of Spacemaker, which in 2020 was bought for $240 million.

— No plans

‍Then it was planned to fetch another NOK 15 million for scaling during the summer of 2022. But those plans were put on ice.

“We have positive cash flow in 2024 and no plans to raise additional capital. Much of last year's growth came in the fall. Thus, we could end 2023 with NOK 12.5 million in annual recurring revenue (ARR),” says Lundquist.

The company now has NOK 18 million in ARR, and aims to end 2024 at NOK 23 million in ARR.

‍When are you going to file a profit statement?

‍“We will continue to deliver positive cash flow in 2025, and aim for a positive income statement in 2026. We still see a lot of opportunities in the market. That's why we invest as much as possible in the team,” Ekern replies.

— May be useful

‍“Eiendomsappen” was the name of the company and service until 2022. It probably resonates badly in countries like the United States, France and Spain.

‍Do you have international plans?

‍Some Nordic customers use us abroad. The experiences of Sweden, Finland and Denmark can be useful in probing the possibilities internationally. That will probably happen in 2025, but we are primarily concerned with our core customers in Norway,” Seim emphasizes.

The entrepreneurs do not want to say anything about their competitors. However, FDV-Huset from Sortland, Curotech from Kristiansand and Ørn Software from Trondheim are companies that work in the same market as Propely.

Interest rate shocks, however, have squeezed the profitability of most people who do business in property. That development prompted the proptech startup Placepoint to enter a merger about a month ago.

How do you mark interest rates?

- We notice this by the fact that customers and potential customers concentrate on the real estate portfolio they already have, and do not buy and sell as much as they would otherwise. This is a good fit for Propely, as we offer a platform that saves users time and money,” Seim emphasizes.