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CapitalRise

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Multi-award winning online property lending platform offering returns of 7-12% p.a.

174%
 - 
Funded 21 Jun 2023
£1,000,026 target
£1,744,316 from 442 investors
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Business overview

Location London, United Kingdom
Social media
Website www.capitalrise.com
Sectors Finance & Payments Digital Mixed B2B/B2C
Company number 09571824
Incorporation date 1 May 2015
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Investment summary

Type Equity
Valuation (pre-money) £40M
Equity offered 4.18%
Tax relief N/A
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Business highlights

  • Bespoke tech platform serving borrowers and property investors
  • Well-established in the market; 125% annual growth in live loans
  • Proven business model with gross profit margin of 72%*
  • £132m paid in capital and returns with zero investment losses
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Key features

  • Secondary Market
  • Nominee investment min. £49.18 +
  • Direct investment min. £100,000.00 +

Idea

Introduction

CapitalRise is an award-winning, FCA-regulated property finance platform built by experienced developers and investors. We provide access to real estate investment opportunities in prime areas such as Chelsea, Mayfair and Kensington.

Using our bespoke technology platform, CapitalRise:
● makes it easy for property borrowers to raise finance quickly and efficiently;
● provides investment customers with access to institutional quality real estate, previously only available with high minimum investment amounts, offering returns of 7-12%.

Well-established in our market, we focus on Prime London and Prime Home Counties, some of the most resilient parts of the property market. Our founders bring decades of property and fintech expertise and invest personally in every loan.

We are scaling rapidly with a successful track record, we believe this creates a strong investment proposition.We have demonstrated the strength of the business through the challenging economic environment of recent years.

Examples of properties funded:

Substantial accomplishments to date

● Proven business model with gross profit margin of 72%
● Revenue has doubled over 2 years to £3m
● £280m of facilities agreed, secured against assets worth £784m
● 125% annual growth in live loan book
● 120% annual increase in repeat borrowers
● £132m paid to customers in capital and returns
● 8.3% annual returns to customers
● Zero investment losses or defaults

* Revenue information from management accounts

Funding Lines

● Our asset management function and diversified funding sources fund growth of our loan book
● £350m of funding lines agreed from banks and other financial institutions to support ambitious growth targets
● This should reduce cost of capital and enable us to write larger loans, driving lending volumes and profitability

Recognition

● Authorised and regulated by the Financial Conduct Authority (FCA)
● “Excellent” Trustpilot score of 4.8, highest among nearest competitors

● Winner of multiple awards including the British Business Bank Award 3 years in a row

Proprietary Product

● Fully-automated customer onboarding and bond issuance
● Manage investments online & via mobile
● Resale marketplace
● Fully automated client money handling functionality
● Bespoke borrower & loan CRM portal
● Proprietary portal for Wealth Managers - streamlines onboarding & portfolio management

Well-backed Business

● 3rd Seedrs raise. A top 10 Seedrs raise in 2019, 156% overfunded
● £1m raised from Venture capital firm Revolt Ventures
● All founders are investing in this fundraise

Monetisation strategy

Revenue is earned from fees charged to borrowers for the arrangement of the loan and through a margin between the interest rate charged to borrowers and the interest rate paid to investors.


Borrower Fees
● 3-7% of the gross loan amount, this is our core revenue:
o Arrangement fees
o Exit fees
o Interest margin

● Revenue as % of gross loan:

Further fees may be charged, such as:
o Extension fees in the event that a loan requires an extension
o Monitoring fees

Investor fees:
o No fees to invest
o 1.5% fee charged to sell an investment on the resale marketplace

Use of proceeds

We see huge opportunities in our market:
● £2.5 billion of deals screened in past year demonstrating the huge opportunity to grow market share
● 60% annual increase in live platform investments YTD March 2023 demonstrating customer demand

To accelerate growth, we plan to invest in the following areas. All are significant drivers of value for the business:


Team
● Our exceptional team possesses the expertise to scale the business
● Further growth planned in our developer and lending teams


Technology
● Tech investment is central to our strategy
● Investor platform is fully automated
● We will enhance our lending portal for smoother interaction with borrowers and improved borrower acquisition
● Data visualisation tools to maximise profitability of customer base


Products
● New products to provide greater variety of investment options for customers and further diversify funding sources
● New products to open up additional distribution channels making it easier for a wider range of institutions to invest

Key Information

Conversion of Convertible Loan Note

This raise will trigger the conversion of the Future Fund Convertible Loan Agreement (the ‘CLN’) which was entered into on 30th December 2020, meaning shares will be issued to the loan holders at a 20% discount to the share price set by this round. Key details of the CLN terms are set out below:

Principle loan amount: £2,300,660
Discount: 20%

Interest: 8% per annum.

Please note that the shares to be issued on conversion of the principal loan amount of £2,300,660 have been factored into the pre-money valuation for this campaign. Shares relating to the 8% accrued interest, however, have not been reflected in the valuation as these can only be calculated once a completion date has been set between parties.

Any shares issued in respect of accrued interest will not benefit from the 20% conversion discount under the CLN.

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Only shareholders can access this page

If you successfully purchase a share lot of this business, you will be granted access.

Buy shares

Only shareholders can access this page

If you successfully purchase a share lot of this business, you will be granted access.

Buy shares

Only shareholders can access this page

If you successfully purchase a share lot of this business, you will be granted access.

Buy shares

Only shareholders can access this page

If you successfully purchase a share lot of this business, you will be granted access.

Buy shares

Investing involves risks, including loss of capital, illiquidity, lack of dividends and dilution, and should be done only as part of a diversified portfolio. Please read the Risk Warnings before investing. Investments should only be made by investors who understand these risks. Tax treatment depends on individual circumstances and is subject to change in future.

This campaign for CapitalRise has been approved by Seedrs Limited (trading as Republic Europe) ("Republic Europe", "us" or "we"), as of 11 May 2023 as a financial promotion. Republic Europe is authorised and regulated by the Financial Conduct Authority with firm reference number 550317. In approving this campaign, Republic Europe has concluded that the information, taken as a whole, is "fair, clear and not misleading." This means that for factual statements we have reviewed evidence of their accuracy, and that for aspirational statements we believe they are phrased appropriately in light of their speculative nature. You should note that in the case of factual statements, the evidence we review is provided by the business, and we do not audit it, which means that we may not be able to identify forged or altered evidence. You should further note that in the case of aspirational statements, the nature of the type of businesses presented on the Republic Europe platform is such that they are likely to have high ambitions, and we may approve statements that convey those ambitions even where we do not believe, or we do not have a view on whether it is likely, that they will be fully realised. The pre-money valuation and investment sought in the campaign are those set by the business: they are not reviewed or established by us, and the valuation is not an independent view of what the business is worth. Given the nature and type of businesses presented on the Republic Europe platform, it is possible that the business has very little cash remaining prior to receiving this investment, and the investment sought may be necessary for the business's on-going existence.

Republic Europe does not make investment recommendations to you. No communications from Republic Europe, through this website or any other medium, should be construed as an investment recommendation. Further, nothing on this website shall be considered an offer to sell, or a solicitation of an offer to buy, any security to any person in any jurisdiction to whom or in which such offer, solicitation or sale is unlawful. Republic Europe does not provide legal, financial or tax advice of any kind. If you have any questions with respect to legal, financial or tax matters relevant to your interactions with Republic Europe, you should consult a professional adviser.

Tax Relief (SEIS)

This business is eligible for SEIS relief - providing qualifying investors with income tax relief of 50% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Tax Relief (EIS)

This business is eligible for EIS relief - providing qualifying investors with income tax relief of 30% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Valuation (pre-money)

Valuation rounded from £39,999,028

This is the fully-diluted pre-money valuation of the business (i.e. before the new investment comes in and including issued options and other equity interests). In contrast, the post-money valuation is based on inclusion of the new investment in the value.

It is calculated as the pre-money valuation plus the amount of new investment. e.g. If Company A is ascribed a pre-money valuation of £1,200,000 by prospective investors investing £300,000, its post-money valuation is £1,500,000.

The investee business is responsible for setting its own valuation, it has not been prescribed by Seedrs.

Pitch type

Investing in a regular equity campaign is the simplest and most common way to invest in a startup. You decide which business you want to invest in, and if the campaign hits its funding target then you will become one of their shareholders. As the company becomes more valuable, so do your shares; allowing you the opportunity to share in the future success of the business.

Learn more about pitch type on Seedrs

Equity Offered

The equity offered is the percentage of the company’s shares being issued in return for the amount of investment raised.

When the amount raised is less than 100%, the equity offered is based on the target raise. Once the company has raised over 100% it is based on the total raised.

In some scenarios, entrepreneurs may accept additional direct investment after closing their Seedrs campaign. Provided this is within 6 months of the closing and on the same terms, we do not typically offer pre-emption rights on that extra investment (where you have the opportunity to invest again to maintain your percentage shareholding).

Learn more about investing and pre-emption rights.

Nominee investment

This shows if you are able to choose, when making an investment, that you be represented by, and your shareholding be managed by, the Nominee investment.

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Custodian

If you invest in this Campaign, Seedrs will act as Custodian rather than provide our standard nominee service. This is due to the fact that the business is not directly involved in the share sale and Seedrs will not benefit from any rights under a shareholder agreement. As a result, Seedrs will handle administrative tasks as we do normally, but you will not have information or voting rights, updates from the business, preemption on future fundraising, or ongoing support about business trading activity.

Learn more about Custodian here

Secondary market

This shows if the business has opted-in or opted-out of allowing its shares to be bought and sold on the secondary market.

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Direct investment

This is an option to invest and hold shares 'directly' in the company (rather than via the Nominee investment). This option is only available to those investing over the threshold amount, which is determined by the fundraising company.

If you choose to hold your shares directly, you will be responsible for any contractual or administrative arrangements with the company you are investing in.

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Payment options

We are not able to accept card payments for investments into this sector. You can pay for your investment by creating a bank transfer, using funds in your investment account or create a Pay by Bank payment. Your investment will only be completed once the funds have reached our account.

Business Involvement

This Campaign offers shares for sale in business that is not directly involved in this Campaign or the sale. As a result, the Campaign and post-investment experience, including investor rights, will differ from a business-led campaign on Seedrs. Most notably, the business will not engage with investors in the discussion forums both during and after the sale or provide any updates to investors.

Learn more here

Payment options

We are not able to accept Pay by Bank payments for investments into this sector. You can pay for your investment with a card payment, by creating a bank transfer or by using funds in your investment account. Your investment will only be completed once the funds have reached our account.

Drawdowns

This campaign offers the ability to pay for an investment by drawdowns.

Security Token

A security token is a digital asset that represents ownership or other rights. It is a digital form of traditional investments. In the future, you may be able to trade your investment through compatible exchanges.

Warning

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None of the information in constitutes part of the campaign and it has not been approved or reviewed by Seedrs.

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