CrowdProperty

Idea

Introduction

There’s a housing crisis in the UK and developers have for years been held back by the challenge of raising finance for their projects.

Our mission is to unlock the potential of small and medium sized property developers to build more, much-needed and under-supplied homes by transforming property finance. We help developers grow their businesses quicker and drive spend in the economy on labour, materials and services.

CrowdProperty is the UK’s leading specialist property development lending platform – a multi award-winning, profitable* and disruptive fintech/proptech innovator with a scalable, customer-centric approach to the property development finance market.

*Based on unaudited management accounts

Property expertise is at the heart of the business, and our team’s 300+ years of property development experience means we deliver finance with the speed, ease, certainty, transparency and expertise that developers crave to help them succeed - ‘property finance by property people’.

We’re award winning…

… and support great housebuilding:

Substantial accomplishments to date

- £665m of property projects and 2,988 homes funded
- £368m of first-charge secured facilities agreed
- £11bn (11,500) of finance applications received; £400m in January
- £870m of facilities in the pipeline

In the last 12 months:
- Grown new facilities by 55%, despite an understandably slower Q422 (Q1-Q3 22 grew 76% year-on-year)
- Grown revenue by 41%
- Returned a second consecutive year of profit from operations (and more profitable year to date this year), despite significant investment in technology, infrastructure and operations to drive long-term growth and scalability

We’ve repaid £172m to our diverse institutional and private investor capital sources with an average first-charge secured return of 8.07%; closing further institutional capital sources following months of due diligence, validating the strength of the business.

We’ve also proven:
- Economics and profitability of the business model
- Consistent growth, developing scalable technology, operations and routes to market
- Significant market share gains in a very large and fragmented development finance market with huge upside potential

- Relevance of ‘property finance by property people’ through growth and repeat business (43% of lending is to developers borrowing more than once despite strong new customer acquisition)
- Scalable, diverse and reliable capital sources
- Structural cost advantage with a non-London cost base
- Extension of the business model internationally (Australia JV) and into adjacencies (CP Capital)

Monetisation strategy

CrowdProperty charges borrowers arrangement fees of 1.5-3.0% and a lending margin of 1.5-2.5%pts p.a., with a cashflow structure that ensures stability in the unlikely case of needing to fund the wind-down of the loanbook. Loan economics are laid out transparently on our website statistics page.

By successfully building routes to market, we have received over 11,500 applications worth over £11bn with more than 13,000 registered developers. This builds market position and the potential for a large and profitable lending business with powerful economies of scale:

- Low cost of acquisition
- High customer lifetime value
- A market-leading developer database
- Closer and value-adding borrower due-diligence to select the right projects
- Tighter and value-adding monitoring to increase the success of projects
- Data/analytics advantage with machine learning models
- Long-term customer relationships to help grow and grow with
- Potential for many further monetisation opportunities

Use of proceeds

This country needs more homes while undersupply persists. We expect 12-24 months of less-competed opportunity to:

- Drive growth in our core and proven SME developer strategy
- Grow share of higher value lending as other funders retrench with poorly structured wholesale funding lines and higher barriers to entry

We believe we have a clear opportunity and a newly defined 3-year strategy to drive robust growth:

- Strong People & Culture – attracting ever deeper market expertise across all functions
- Scalable Systems & Processes – further developing our proprietary technology platform
- Robust Governance & Control – building deeper data/analytics/governance to underpin scaling
- Exceptional Customer Relationship Management – leveraging unique market reach and powerful unit economics

Equity capital raised, put alongside profits/cashflows from the operating business and working capital optimisation, means a smaller (and less dilutive) raise, with more invested in strategic growth, as we’ve proven before:

Crowd Property Limited is authorised and regulated by the Financial Conduct Authority (FCA) with permissions for operating an electronic system in relation to lending (FRN 723959)