Marketplace lending platform CrowdProperty Australia has raised $1.5m to expand its SME property development finance offering and wholesale investment opportunities.
Oversubscribed by nearly 20 percent, the seed round featured well-known Australian developer Oscar Done as a cornerstone investor, and was supported by several other experienced property, financial services, and technology investors including early-stage investor Alex Retzlaff (now VP of Black Nova VC fund) and technology advisor Jeff Lewis (former VP Technology at TripAdvisor).
CrowdProperty Australia CEO and co-founder David Ingram said the funds are the next step in CrowdProperty’s launch to enable rapid growth at a time the market needs it.
“This was the smoothest capital raise I’ve managed for a start-up — we had the luxury of being quite selective about who we invited to join the round,” Mr. Ingram said.
"We had a lot of interest from family offices and wealth managers who saw value in our direct origination of quality residential developments, and from experienced property developers who appreciate the pain points we are helping to solve in their world. Then we had serial tech entrepreneurs who saw our potential to scale the solution.
"Having a successful and profitable business model in our UK joint venture partner certainly helps to de-risk the business for investors, but they also see the opportunity in the Australian market. For example, 55 percent of Australian wealth is tied up in property compared to 35 percent in the UK. Wealth managers understand we can help their clients diversify portfolios while still scratching the property itch."
CrowdProperty UK CEO Michael Bristow said the strength of the Australian seed round underpinned the opportunity for CrowdProperty to transform SME property development finance in the region.
“We’ve achieved several milestones already in 2021 — launching in Australia and closing both a $1.5m seed round [in Australia] and a £1,800,000 equity funding round [UK] and securing a £300m institutional funding line which complements existing diverse sources of capital in providing certainty of funding for property developers,” Mr. Bristow said.
“Our focus is taking action to further step change the businesses in order to realise our potential quicker in our mission to transform property development finance.”
CrowdProperty launched in Australia in May this year. It offers wholesale and institutional investors (including SMSFs and trusts the opportunity to invest in property project loans and earn up to seven percent p.a. target interest returns*. Its expert property team curates the best residential projects by applying a rigorous 57-point due diligence process, with the aim of funding only high quality and lower risk projects. The company has already assessed over $120m of property projects, funding three to date with $17m under review.
Comparably, CrowdProperty UK has assessed over £4.5b of projects, funding only three percent. It has now funded the development of 1,535 homes worth £309m, originating £187m of agreed facilities, and lending £145m in seven years.
"Access to alternative finance for the builders and developers who want to build the kind of homes Australians want to live in has never been more important," Mr. Ingram said.
"Particularly at a time when housing is becoming more unaffordable for so many Australians. This is underscored by APRA’s announcement to increase the minimum interest rate buffer to three percent."
*Target returns, not forecast returns. For wholesale investors only. Terms, conditions, and risks apply.
The CrowdProperty Investment Trust (the Trust) is an unregistered managed investment scheme. The Trust is only available to investors that are wholesale clients as defined in s761G of the Corporations Act 2001 (Cth).
Investors pledge their funds in the Trust which makes first mortgage secured loans to SME property developers.
Withdrawals can only be made when the Investor funds are in Cash Interests in the Trust. Refer to the Information Memorandum (IM) for more information.
CrowdProperty Pty Ltd (ACN 633 516 195) is the investment manager of the Trust (Investment Manager). The Investment Manager is a corporate authorised representative (No. 001285637) of Quay Wholesale Fund Services Pty Ltd AFSL No. 528 526, ACN 647 044 602. The Investment Manager's authority under its Corporate Authorised Representative Agreement with Quay Wholesale Fund Services Pty Ltd is limited to general product advice regarding the Trust only. Quay Wholesale Fund Services Pty Ltd is the trustee of the Trust and the issuer of its IM (Trustee).
The contents of this document are not intended as financial product advice and have been prepared without taking into account your personal circumstances, investment objectives or particular needs. You should read the Information Memorandum for the Trust in full to consider whether an investment is appropriate for you.
Neither the Investment Manager, Quay Wholesale Fund Services Pty Ltd, nor the Trustee guarantee the repayment of capital, the performance of any investment or the rate of return for the Trust. Past performance is not necessarily indicative of future performance. An investment in the Trust is not a bank deposit and is subject to greater risk than cash investment products including loans of income and part or all of the capital itself.
We strongly suggest that you seek your own professional financial or legal advice prior to any investment decisions.