SoftBank-backed proptech startup Propzy has dissolved Vietnam’s legal entity related to direct sales staff two years after bagging a $25-million Series A round led by real estate private equity firm Gaw Capital and SoftBank Ventures Asia.
According to an announcement sent to the Ho Chi Minh City Department of Planning and Investment on May 25, Propzy said the dissolution was a result of business model restructuring.
Propzy founder and CEO John Le told DealStreetAsia in an exclusive interaction that Propzy had dissolved only one part of the Vietnam business. “Our company is headquartered in Singapore. We have several operating entities in Vietnam. The service company housed our sales staff. Since we removed our direct sales staff from our ongoing operations, there was no need to maintain this legal entity. Our main Vietnam operations are under the Propzy Vietnam entity, which continues to operate successfully,” he added.
Last week, DealStreetAsia broke the news that Propzy has laid off over 50% of its employees as it scales down operations due to the pandemic and prepares to shift its business model.
According to Le, while the company had slashed 50% of its staff, it is now re-hiring nearly 100% of that headcount over the next few months as it turns to new growth areas and reduces its exposure to the direct agency business.
“We’ve been gradually adjusting our organisation since September 2021,” Le had told DealStreetAsia.
The startup is understood to be shifting away from its tech-enabled direct brokerage services. Instead, it will focus more on services such as PropzyHOME — a townhouse supply platform developed by Propzy that is involved in the selection of land to re-designing and selling it to customers — and PropzySTAY, which provides home rental solutions.
Founded in 2016, Propzy’s technology covers almost every stage of a real estate transaction, from brick-and-mortar sales centres to an online marketplace for listings, financial products such as mortgage lending and, finally, enterprise software for property managers and tenants.
In 2020, Propzy closed a $25-million Series A round led by real estate private equity firm Gaw Capital and SoftBank Ventures Asia. New and existing investors participating in the financing included Next Billion Ventures, RHL Ventures, Breeze, FEBE Ventures, RSquare and Insignia Ventures Partners.
The pandemic has put downward pressure on Vietnam’s real estate market. A report by the Ministry of Construction showed that up to 28% of real estate agencies were at risk of dissolution or bankruptcy, 32% were struggling to maintain operations and 40% were facing challenges but not too much.