Meet the Korean apartment rental startup disrupting a boiling housing market

As a founding member of WeWork Labs, the subsidiary of the shared office space giant, Matthew Shampine helped transform the world of commercial real estate. Now it's taking on the deposit-heavy South Korean residential real estate market, one rental at a time.

Living in cramped and unaffordable apartments remains an inglorious reality for many adults. When Matthew Shampine, Korean-American co-founder and CEO of apartment rental startup Dongnae, moved to Seoul with his wife and newborn daughter, he saw an opportunity to reshape that reality in South Korea. p>

"I really, really wanted to do something that would have the most impact on the most people," Shampine, 39, says in a video interview. "You can ask anyone here, but Koreans have a strong affinity for residential real estate...we can change the whole experience, all the way, and meet their needs."

Born in South Korea, Shampine was adopted in the United States and raised in New Jersey. In 2007, he returned to Korea for a conference on Korean-American adoptees and reconnected with his biological family. There, he made it his mission to return for good and do good for the country.

Shampine joined WeWork in 2011 and co-founded WeWork Labs, the office-sharing company's startup incubator. In 2018, he became managing director of WeWork Korea, where he met Dongnae co-founder Insong Kim, who serves as the company's chief strategy officer.

Together, the couple launched Seoul-based Dongnae in 2020 with the goal of making moving into an apartment more affordable and accessible. Its key product, Dongnae FLEX, offers fully furnished short-term rental properties with low deposits, appealing to new graduates or travelers unable to cough up the exorbitant deposits – up to 350 months rent, according to the startup – which are generally required for Korean apartments.

“The way our product came about is that we really allow people to live in the apartments they want,” says Shampine. "We are unlocking all of these new options because you are not limited by the amount of money you have set aside for a deposit."

So far, Dongnae has opened its doors to local and international investors. Its $21 million Series A funding round in March included NFX, which has backed companies like Lyft and Doordash, and proptech-focused MetaProp, an Airbnb backer, as well as the oldest fund of Korean investment Daol Investment and Hana Financial. The new capital brought the startup's total funding to around $34 million, following its seed round of $4.1 million in December 2020 and its pre-seed round of $700,000 the previous year. Dongnae declined to disclose its current valuation.

"Residential real estate is the largest asset class here in Korea," said Kyung Kuk-hyun, managing director of Daol Investment, in a statement on Dongnae's latest funding. "Dongnae's incredible growth, coupled with its strong financial partnerships with leading financial institutions, makes this investment attractive."

More than 80% of Korean household wealth is in real estate, compared to about 35% in the United States, but home ownership is proving increasingly difficult. The average price of an apartment in Seoul, the country's capital and most populous city, doubled between 2017 and 2021 to more than $1 million. Housing has been at the center of recent Korean presidential debates, with newly elected President Yoon Suk-yeol pledging to calm the market and build 2.5 million new homes across the country during his five-year term. .

Protesters rally against Korea's real estate policies on July 25, 2020 in Seoul.

Chris Jung/NurPhoto via Getty Images

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