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CrowdProperty

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The UK's leading specialist property project lending platform - a profitable fintech/proptech innovator

224%
 - 
Funded 4 Aug 2021
£800,001 target
£1,815,319 from 790 investors
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Business overview

Location Birmingham, United Kingdom
Social media
Website www.crowdproperty.com/
Sectors Property Digital Mixed B2B/B2C
Company number 08764786
Incorporation date 6 Nov 2013
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Investment summary

Type Equity
Valuation (pre-money) £29.4M
Equity offered 5.75%
Tax relief

EIS

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Business highlights

  • Lent £140m+ with £180m+ originated facilities
  • Institutionally backed with a new £300m funding line
  • Deloitte Fast50 and FT1000 recognition as a high growth business
  • Profitable and fundraising to further step-change the business
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Key features

  • Secondary Market
  • Nominee investment min. £21.78 +

Idea

Introduction

CrowdProperty is the UK's leading specialist property project lending platform - a profitable fintech/proptech online-lending innovator, exceptionally efficiently and effectively matching the demand (quality property professionals undertaking quality property projects) and supply (institutional/private investors) of capital for value-creating property projects, delivering a better deal for all – borrowers, lenders, the under-supplied UK housing environment and spend in the UK economy.

CrowdProperty was founded in 2013 to provide a solution to two fundamental problems; SME property professionals struggling to access the finance they need, and entrenched inefficiencies in matching of the supply and demand of capital between investors and borrowers, compromising returns for capital owners. This has held back housing delivery, spend in the economy and retail/institutional investor returns for many years.

The business has been widely decorated by awarding bodies:

Substantial accomplishments to date

We've step-changed key business metrics since our last fundraise, yet again proving we can scale rapidly and add considerable value with equity capital investment:

CrowdProperty has the potential to further scale quickly because we:
- Have built a trusted developer and investor brand (with a 100% capital and interest payback track record)
- Are purposefully positioned as a customer-centric lender of first resort to build long-term, deep and lasting relationships with quality property professionals
- Primarily originate projects directly, bringing strategic advantage in terms of superior economics, closer borrower due-diligence, tighter project monitoring and stronger customer retention
- Have all capabilities in-house, including building a proprietary and scalable technology platform
- Resource the business ahead of growth to ever-improve service, delivery and performance
- Have structural cost advantage with a non-London cost base
- Have proven the profitability of the CrowdProperty business model
- Have scalable and diverse sources of capital, including a recently closed £300m funding line from a global asset manager, a strategy that was proven to be robust with perfect reliability of lending for property professionals through Covid-19.

We've also launched CrowdProperty Australia, leveraging our asset-class expertise, scalable proprietary technology and IP from the UK business in a market that faces similar pains to those being solved by CrowdProperty in the UK.

Monetisation strategy

Finance arrangement fees of 2-3% and loan income of 1.5-2.5%pts p.a. charged to borrowers. Loan economics are laid out transparently on our statistics page with a start-and-end cashflow structure that aligns to FCA cashflow requirements for the unlikely case of needing to fund the wind-down of the loanbook.

Given the direct origination model and directly ‘owning’ the customers and thousands of registrants, there are many further monetisation opportunities on the roadmap.

CrowdProperty has strong economics due to achievable fees, average loan size, repeat borrower business, borrower cross-sell potential, average loan length capital recycling and ever-decreasing cost of acquisition on both sides of the marketplace, enabling us to build a large and profitable lending business.

We model that we can triple our lending again with a team growth from c.40 to c.60, realising significant scale benefits from the core team, systems, processes and lending pipeline being generated.

Use of proceeds

We’ve proven that we invest equity capital investment and grow the team to deliver value-enhancing growth. Whilst profitable, we believe we can further step-change the business and unlock further scalability by investing in:

1) Continuing to grow the property team (currently 14 FTEs) and expertise to better serve quality property professionals aligned to their most important needs

2) Further evolve the proprietary, in-house built technology platform with software engineering talent (currently 8 FTEs) to build identified proposition developments lender and borrower side, further operational efficiencies and the market-leading fintech platform in our strategic vision to deliver even deeper competitive advantage

3) Having tested, refined and optimised marketing on both the borrower and lender sides, scaling investment will deliver new customers where customer lifetime value significantly outweighs cost of acquisition

4) A number of other (competitively sensitive) proposition developments

Key Information

Outstanding debt

Please note the business has the following outstanding debt. Funds raised as part of this round will not be used to repay this debt.

Director loan:

Repayment Plan - None

End Date - None

Outstanding Balance - £215,014.48

Interest - £5,250 fixed annual payment in March (3% of principal value of £175,000).

Bounce Back loan:

Repayment Plan – monthly repayments of £833.33 (not including interest) which start 13 months after the loan is paid into that account (June 2021) for 60 months.

End Date – 07/05/2026 (72 months from May 2020).

Outstanding Balance - £49,166.67

Interest – rate per annum (fixed) 2.5%

Share classes

Please note the business has two share classes (Ordinary A and B) which have equal rights in all respects other than Ordinary B shares do not have voting rights. Shares issued for this raise will be Ordinary A.

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

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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

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 webpage has been approved as a financial promotion by Seedrs Limited (trading as Republic Europe) ("Republic Europe"), which is authorised and regulated by the Financial Conduct Authority with firm reference number 550317. It is not intended to be a promotion of any individual investment opportunity and is not an offer to the public. The summary information provided about investment opportunities on this webpage is intended solely to demonstrate the types of investments available on the Republic Europe platform, and any investment decision should be made on the basis of the full campaign. Full campaigns are available to investors who have become authorised to invest on the Republic Europe platform. All investment activities take place within the United Kingdom, and any person resident outside the United Kingdom should ensure that they are not subject to any local regulations before investing.

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 £29,406,136

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.

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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).

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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.

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