[Interview] Jozette Chetwynd-Palmer, Founder, AirAdvance, South Africa
Frustrated by certain difficulties that most Airbnb hosts are familiar with, Jozette Chetwynd-Palmer started her company AirAdvance, the only business creating financial products tailored to Airbnb hosts.
Could you introduce your company?
AirAdvance provides Airbnb hosts with access to funding by offering hosts cash advances based on their future bookings. Hosts can advance anywhere between R5 000 and R50 000 depending on their future bookings.
Where is the company located?
Our offices are based in Sandton, in Johannesburg, but we operate nationally.
Who are your clients?
At the moment our clients are Airbnb hosts but we will be rolling out to other platforms in the future.
When and why was AirAdvance founded?
The idea for AirAdvance came about when I had to make some improvements to my apartment for an upcoming booking but didn't have the funds available. It was very frustrating knowing that had I been able to access a part of the booking value before guests arrived I could have easily made the improvements. I started looking for a business that offered access to funding for Airbnb hosts and couldn't find any in South Africa, which inspired me to create a solution to a real problem I experienced. I then interviewed over 50 other Airbnb hosts and found that it was an issue many hosts faced. I developed a very basic MVP website in 2017 and started beta testing. I quickly did over 25 advances with a 100% repayment rate and then realised I would need access to significant capital in order to scale.
How is AirAdvance funded at the moment?
The set up of the company and all the tech has been self funded by myself and my husband, Jon. In addition to that we did get a small cash injection when the business started through an angel investor who bought a 10% equity stake at concept stage. We have just concluded a deal with Retail Capital to finance all the advances moving forward, allowing us to scale quickly without worrying about funding the book. Retail Capital get a share of the revenue but don't get any equity.
What has been the response in South Africa to your services?
Our pilot phase was very successful. We had a fast uptake and a 100% repayment rate. Once we had proven the model on a pilot scale we realised we would need to find a trusted funding partner with experience in the cash advance space and that is how our collaboration with Retail Capital started. We have just gone to market with our Retail Capital backed advances and are optimistic that hosts will respond favourably.
What are the growth plans of the company?
The business model is very scalable and we would look at moving into both other home sharing sites and other geographies as soon as we have more robust data on our SA operations.
What does AirAdvance need to grow and prosper?
At the moment our focus is on providing hosts with access to funding when they need it, especially as peak season is about to start with December holidays.
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