Property Investment Platform enabling share & loan investment in specific properties.
Business overview
| Location | London, United Kingdom |
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| Social media | |
| Website | www.britishpearl.com/?utm_source=Seedrs |
| Sectors | Property Digital Mixed B2B/B2C |
| Company number | 9701436 |
| Incorporation date | 24 Jul 2015 |
Idea
Introduction
British Pearl is a directly FCA authorised property investment platform, transforming the way people can invest in property. We aim to make property investment affordable, easy and liquid.
Affordable – You can invest in specific properties as a shareholder or a lender from £100, becoming a landlord or a mortgage provider.
Easy – Invest in under four minutes, you can go from registration to purchasing shares and/or loans in a property of their choice.
Liquid – Our Resale Market allows you to trade shares and loans making individual properties a more liquid asset.
Diversification – We provide our investors the ability to fine tune their investments to meet their risk/return needs. You can buy the shares and loans across multiple property types (new build, refurbishment, high yield, development and commercial) across the country.
Intended impact
Today’s Problems
1. In our view, property investment is expensive, time consuming, opaque and illiquid.
2. Savings returns are currently low, investments can be difficult to understand.
3. In our experience, property developers can have difficulties accessing capital and would benefit from a new sales channel.
British Pearl’s Goals
1. Enable access to property investment with efficiency, speed, transparency and confidence.
2. Provide better returns on savings and investments in an asset class people trust and understand.
3. Apply institutional grade due diligence and operations to property investment.
4. Assist developers access equity and debt capital in one place and create a new sales channel.
How we achieve this
1. Originate & underwrite new property investments.
2. Enable new investors to register and invest in minutes.
3. Sell shares and loans in new investments in seconds.
4. Provide liquidity through our Resale Market exchange.
As an investment manager we are responsible for investment performance unlike P2P lenders and Crowdfunding sites.
Substantial accomplishments to date
Progress
• Our platform has been live and trading for around 3 months.
• We have an experienced team with a strong track record in place.
• We are FCA authorised for alternative investment fund management (AIFM), operating an electronic lending system, and holding client money.
• We have raised over £4.6m of equity funding & have access to a £2m+ underwriting vehicle to purchase properties.
• We developed & own Business critical IP such as; property investment platform software built in house ground up, bespoke legal agreements, trademarks and domains.
• We will be ramping up our marketing channels from October.
• We have nearly 1,000 users since launch.
Awards
• We have been nominated for 5 industry awards including; Placetech, MIPIM Proptech Europe, UK Prop Tech, Resi Trailblazers and listed in the top 100 UK FinTech companies by Her Majesty’s Treasury.
• We have been featured in over 20 publications including; The Times, the BBC, The Independent, the Daily Mail and the Sunday Express.
Monetisation strategy
British Pearl is an investment manager and as such charges two types of fees: (i) investment management and (ii) property management fees which are applied at different stages during the life of the investment and are borne either by investors directly or the property-owning companies known as Special Purpose Vehicles.
We have designed our fees to be fair and competitive and to align our interests with our investors. Fees are clearly stated on the how it works page and detailed in the FAQs.
Investor fees include a one off 2% participation fee on entry to Share Investors and 20% success fee on profits only, while Loan Investors are not charged on entry, early exit fees apply via the Resale Market of 1% for shares and 0.5% for loans.
Based on our fee structure we aim to earn somewhere between 5%-10% on all invested capital (over the life of the investment) on rental investments depending on investment performance and Resale Market fees and potentially more on development projects.
Use of proceeds
Funds raised will be used for working capital purposes and allocated as follows:
• 38% Software development.
• 35% Sales & Marketing.
• 10% Property Department.
• 5% Professional services.
• 12% Other costs.
Market
Target market
British Pearl targets two markets (1) property (2) savings & investments which are both worth in the trillions.
When it comes to our investors (Share & Loan Investors) we are targeting the mass affluent who want better returns on their savings and investments or would like to be invested in a trusted asset class they understand, property.
In our view, customers motivated by investing in property fall into two groups, experienced property investors and aspirational property investors. We believe that experienced property investors are motivated by the bulk buyer discounts, tax benefits, diversification opportunities and hassle-free investment we aim to provide. Aspirational property investors may be time poor professionals or those who don’t have all the funds or inclination to be a landlord by themselves.
Property developers are also our customers, through us they can access both equity and debt capital to fund their projects all in one place, and have a new sales channel to sell their completed developments.
Characteristics of target market
Property Market
Residential & commercial real estate is valued at almost £8 trillion. The residential market receives long-term support from the housing shortfall of 100,000 homes annually. Property ownership faces challenges as a result of higher taxation and reduced mortgage availability due to increased affordability checks being required by regulators and therefore banks. In our view, these dynamics will continue to drive property prices higher over the longer term resulting in a larger rental sector.
Savings & Investments Market
The total value of savings and investments is in the trillions, with retail deposits of £1.4 trillion generally earning poor returns. With low interest rates we believe there is a large pool of money seeking higher returns. We believe that asset-backed investments such as property, offer an attractive alternative, having achieved fixed rates of circa 4% p.a. with 50% equity protection and total equity returns (income and capital gains) above 6% p.a. In our view, secured, income producing investments are in demand.
Marketing strategy
Our marketing strategy has two key pillars:
1. Pull activities – brand building to communicate product benefits and USP’s to a wide audience.
2. Push activities – direct response and sales plans to convert high quality site traffic to sales.
Our current customer acquisition approach planned to be a combination of commission-based relationships and a controlled budget for paid, owned and earned media. Arrangements are implemented mostly with partners in the property or financial services sectors, but also with media businesses.
These plans are in place across digital and offline channels, and we consider them to be showing strong signs of success. We have been featured on BBC national radio as well as by the Times. We feel we are also achieving highly efficient ROI from our digital performance media.
We have acquired investors from five countries, which is a reassuring validation of our proposition. We will continue to refine our marketing approach through small scale tests before investing heavily thereby ensuring effectiveness of spend.
Competition strategy
Of the handful of unitised property investment websites, some focus solely on equity or debt, few do both. Some companies license their software and infrastructure and are not directly FCA authorised, which can result in higher operational costs (lower profit margins). By not owning their operational infrastructure we feel that they lack the agility to respond to changes in customer preferences and the market.
British Pearl’s comprehensive customer proposition and ownership of its infrastructure has resulted in what we believe is valuable company IP, agility, and no directly comparable competitor. Our FCA permissions enable share and loan investment in a wide variety of property investment types while client money holding permission means quicker and cheaper investment processing. Coupled with the software we have developed, including the Resale Market and Open API (a first), this really sets us apart.
We feel our product is unique and with 1,000 registrations since launch customers are clearly interested in our service.
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