Property crowdfunding platform: giving individuals access to institutional property investments
Business overview
| Location | London, United Kingdom |
|---|---|
| Social media | |
| Website | brickowner.com |
| Sectors | Finance & Payments Digital B2C |
| Company number | 09709791 |
| Incorporation date | 30 Jul 2015 |
Idea
Introduction
Brickowner is disrupting institutional property fund management and property investing. We enable our customers to invest in property assets that are managed by experienced asset managers they couldn’t otherwise access.
By aggregating investors with as little as £100, we are able to open up the world of high return investments to a wider range of people.
Through our custom-built automated system property asset managers benefit from accessing new investors, and from a simplified process for managing their own investors.
Brickowner launched in beta, with no marketing spend and already has revenues and a growing customer base, currently with over 690 users who have invested over £270,000 through our platform.
The next phase of growth includes expanding our customer base with a targeted marketing strategy, and launching a secondary market allowing Brickowner investors to sell shares to other users.
Intended impact
The key issues we solve are : -
Many investors are unable to identify the best property asset managers due to lack of time or knowledge.
Higher yielding property investments usually require a minimum investment of £25-£50k. We offer access to people investing as little as £100.
Many property asset managers have a 3-7 year lock-in and no liquidity for their investors. When launched, our secondary market will allow both our investors and the asset manager’s investors to trade their shares with each other, creating liquidity for both.
Bank interest rates for savers are at historic lows and fewer people can afford to invest in property. We bring people easy access to diverse investments with the potential for attractive returns.
Due to the high cost of managing small investors conventionally, asset managers have high minimum investments. Automating the onboarding and management of investors significantly reduces the cost, enabling new sources of funds through our investor base to the asset managers.
Substantial accomplishments to date
Brickowner has raised over £400,000 from investors and innovation grants.
Our customers have already invested over £270,000 through our platform, validating both the technology we built, and the business case. 33% of our investors are repeat investors.
We have over 690 customers registered on the platform of whom 130 have invested into properties.
In the last 6 months the number of users on our platform has increased by an average of 16% per month. This has been achieved without any marketing spend.
We have built our own crowdfunding platform from scratch (and own all the IP), working with industry leaders to develop scalable technology that can grow with the business.
We have validated the business and the technology by having customers with no previous connection to Brickowner investing up to £20,000 a time through our platform.
We have paid out a number of dividend payments to our customers, meeting projected returns on our investment opportunities to date.*
We are building a base of asset managers working with Brickowner, and who are looking to work with us into the future. We anticipate that this will provide considerable ongoing deal flow for the platform.
*based on unaudited management accounts. Please note that past performance is not an indicator of future returns. These results are based on the period from March 2017, when the first dividend payments were made to customers.
Monetisation strategy
Brickowner charges 2 fees:
1. 3% of the amount being invested at the point of investment.
2. 0.75% per annum of the amount invested.
Investors buying on both the primary and the secondary markets will pay the same fees.
Once we open a secondary market we are also likely to introduce a performance fee on exit.
Use of proceeds
Brickowner has validated its technology and market during beta launch. We are now ready to significantly scale the business. Further funds will be used to:
• Develop further features for our investment platform.
• Implement a marketing strategy to acquire new users and increase our brand presence .
• Working capital for the business, including growing the team.
Please note that company currently has a £50k Directors loan with no interest attached. Funds from this Seedrs campaign will not be used to reimburse the loan.
Market
Target market
People who are looking for returns higher than they get from their bank or ISA.
Our customers want to invest in property, diversify their investments, and benefit from the expertise of institutional property asset managers.
The 2 million buy-to-let landlords will find it more attractive to invest in property via our platform due to recent changes in property tax.
People saving for a deposit to buy a property, who want their cash to keep up with the property market.
Another target is property asset managers wanting new sources of funding, benefitting from our ability to aggregate investors into large enough sums for them to work with.
Asset managers will also benefit from our secondary market, offering liquidity to their investors and ours rather than a 3-7 year lock-in. We provide a technology platform with on-boarding and investment management facilities that allow investment managers to work with new investors, and to manage their own more easily.
Characteristics of target market
UK private rental sector is now worth £1.29 trillion. £483 billion is invested in UK commercial property.
In the UK, an estimated £3.2 billion was raised by the UK alternative finance market in 2015, which grew by 84% compared to 2014.
There are 2 million Buy-to-Let landlords in the UK, many of whom may have been negatively affected by recent tax changes. We believe that these property investors will be looking for a new way to invest that is more tax efficient and this is offered by our platform. A November 2016 survey by the Residential Landlords Association found that 25% of buy-to-let landlords have sold or are planning to sell their buy-to-let properties due to the recent tax changes.
Since 2007 we believe investors want more control and transparency when it comes to investing, and we believe this is offered by an online platform like Brickowner.
Marketing strategy
We have two customer sources. Direct customers who join our platform and indirect who come via the property asset managers we work with.
Indirect Customers: we offer property asset managers a way to aggregate their own investors to invest in their investment opportunities through our platform. This allows them to accept smaller amounts from their investor base. There is no marketing cost to find these investors as they come from our partners.
Direct investors are customers that join Brickowner directly. So far we have developed a strong customer base without any marketing spend. These customers come from a variety of avenues:
A. referral schemes for new users, either introduced from existing users or from different professional referral providers.
B. affiliate partners who help introduce new users.
C. SEO strategy involving the creation of written content and web back links to help drive new users to the site.
We also now intend to implement an online marketing, media and PR program.
Competition strategy
There are other property crowd-funding sites in the market, however the market is still very young. We believe that in the future people will join multiple platforms and shop around for the right type of deals and returns. We consider that we are different in the market in a number of ways:
1. We are not buying and managing property ourselves. This allows us to scale faster and focus on our core expertise, providing the platform to connect investor and property investment.
2. By working with asset manager partners we can offer opportunities across all the different property sub sectors, from residential to industrial and hotels, allowing our users to better diversify.
3. We are not restricted just to equity investments, or just to debt. We offer a mix of investment types to our investors.
4. We have flexibility with the amount we raise for each investment. With our model, we can take a proportion of a larger investment (e.g. £100k of £3.5m) or we could raise the full amount. We believe that this allows us to scale faster.