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Individuals can invest as little as £50 in residential properties through UK platform
Property Partner, a property crowdfunding platform based in London, today announced it has closed a £15.9 million (approximately $22.4 million) funding round led by Octopus Ventures with participation from Index Ventures and Dawn Capital.
The company has raised a total of £22.5 million (approximately $31.7 million) in venture capital funding to date.
A unique take on the rising tide of crowdfunding businesses, Property Partner allows individuals to invest as little as £50 (approximately $71) in residential properties. For example, starting tomorrow you can start backing four modern flats a few minutes' walk from Clapham Junction. From the listing's main page, you can take a closer look at the floorplan and location, review financials, or look at reports from the solicitor and surveyor.
Property Partner charges a two percent fee on initial investments.
After the initial investment, backers start earning income from rent each month depending on how much they invested. Property Partner says 10.5 percent of the rent plus value-added tax is allocated to pay for advertising costs, letting, and management.
If you ever want to sell your share of the property, you can offer your holdings to other investors through Property Partner. Additionally, the platform offers all investors the opportunity to sell their holdings at market value every five years.
“The £5.75 trillion UK property market, with the exception of pioneers such as Zoopla, has been slow to embrace technology,” said Jo Oliver, Investment Director at Octopus Ventures, in a prepared statement. “Through its combination of technology, business model and excellent management execution Property Partner is dramatically increasing and improving the accessibility of property as an investment asset class.”
Zoopla, of course, is another member of Octopus’ portfolio. The London-based company helps users search for their next home to buy or rent in the UK, so it’s more of a traditional online marketplace.
Property Partner is just one of a flurry of equity crowdfunding startups that have cropped up in the past couple years. Just this past Friday, I wrote about two Israeli startups (iAngels and OurCrowd) that had closed new financing for their crowdfunding platforms serving accredited investors.
Even closer to Property Partner, there are many companies (including CrowdStreet, Fundrise, Patch of Land, Property Moose, and RealtyMogul.com) specifically looking at real estate investing as something that can be disrupted through crowdfunding. And it's certainly lowering the barrier for individuals to start investing.
Since launching in January 2015, Property Partner says it has attracted over 6,200 customers, who have invested over £24 million (approximately $34 million) across 166 properties. And the company says its investors earn an estimated 13 percent return every year.
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CrowdStreet provides real estate operators, funds and private equity companies a full-service marketplace solution for presenting investments online, marketing opportunities publicly, managing the offer process and maintaining ongoing investor relationships. The CrowdStreet solution is enriched by services and business partnerships that empower real estate sponsors to modernize their fundraising processes and embrace online capital formation. Accredited investors, institutional investors and family offices access an intuitively-designed platform to find institutional-quality real estate investments, complete an online offer workflow, track investment performance and build a commercial real estate portfolio. Based in Portland, Oregon, CrowdStreet was founded in 2013 by a team with deep experience in commercial real estate, securities and finance, marketing, consumer Internet and software development.