Property Investment Platform
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Brickowner is a custom built property investment and management platform that launched in early 2017.
Brickowner has two revenue streams from B2C and B2B products.
The B2C product enables people to invest into property investment opportunities that are managed by experienced property asset managers, which they wouldn't otherwise be able to access.
The B2B product offers a technology platform for property asset managers to onboard and manage their investors through our FCA compliant structure whilst also bringing them new investors from our B2C platform.
Early 2017 we launched the B2C platform and to date 44% of our customers have invested into more than one of our investments.
The B2B product was launched at the close of 2017, leading to a rapid growth in our revenue, customer activity, and our projections for 2018.
Since launching, £1.25m has been invested through our platform. Over £900k of this has been raised in Q1 of this year, representing a 256% growth on 2017 activity.
The key terms that apply are as follows:
• Discount – conversion to equity at the lower of (i) a 20% discount to the valuation set by a Trigger Event or (ii) the valuation cap of £6,000,000.
• Conversion is automatically triggered by the following Trigger Events:
o A Qualifying Financing Round - defined as a subscription for equity (ordinary shares) of at least £300,000 from one transaction or a series of transactions. The Seedrs fund raise does not count as a transaction;
o A change of control or IPO of the company;
• Longstop Date: 12 months from the date of the convertible agreement.
• If conversion has not been triggered by the longstop date, shares will be issued on the date at a valuation based on the lower of (i) a pre-money company valuation of £2,621,148; or (ii) the lowest price for any share issued after the date of the convertible agreement.
We want Brickowner to be the primary service for property managers wanting to improve the cost and efficiency of onboarding and managing their investors, whilst enabling individual investors to access property investment opportunities not otherwise available to them.
We provide a single solution for property managers and investors:
- Many investors cannot identify or access attractive professionally managed property investment opportunities due to a lack of time or knowledge. We allow investors to invest in such opportunities.
- Our experience suggests that property asset managers struggle with increasingly complicated legal and operational investor on-boarding (Identification, Anti-Money Laundering, Know Your Client) and ongoing investor management. We have automated this process, making it significantly cheaper and quicker than conventional offline processes. Thereby saving the property managers time, hassle, and money, and giving their investors an improved customer experience.
Substantial accomplishments to date
Brickowner has raised over £500k from investors and Innovation grants to support the development of the company.
In Q1 this year already over £900k has been invested through the platform, compared to £348k in 2017.
In Q1 2017 the largest single amount invested through the platform was under £10,000. In Q1 2018 new individual investors are now investing in excess of £100,000 a time. This is due to the launch of our B2B product, and we believe supports very positive growth projections.
In Q1 2018 we have already locked in £79k+ of potential revenue for the business.
We have over 1,000 customers registered on the platform of whom almost 200 have now invested into our investment opportunities. 44% of these investors are repeat investors.
We have a 20% conversion rate of sign-ups who become investors, compared to an industry standard of 13%
Since launch we have achieved on average 40% month on month growth of money invested through our platform.
We have made 12 dividend payments to our customers, meeting projected returns on our investment opportunities.
Both parts of the business have now been successfully launched.
We have secured our first B2B client with a deal pipeline of c.£10m
We are in discussions with further B2B clients who we expect to sign up throughout 2018.
Brickowner charges 3 fees, two to investors and one to the property manager:
B2C fees charged:
1. 3% of the amount being invested at the point of investment.
2. 0.75% per annum of the amount invested.
B2B fees charged:
A profit share fee is charged to the manager. The exact amount varies depending on the raise amount and projected return.
Use of proceeds
In advance of a larger funding round, Brickowner is raising the existing round to:
1. Make some key tech updates to expand the B2B product so it can scale faster.
2. Initiate marketing of the B2C product to scale the investor base.
3. Make further key hires to increase the team.
This is expected to position the company to raise a larger round during 2018.
The company currently has a £50k director loan, which carries no interest and funds raised as part of this campaign will not be used to pay it off.
- People who are looking for returns higher than they get from their bank or ISA.
- Our customers want to invest in professionally managed property and diversify their investments in a transparent and easy to do manner.
- We believe that the c.2 million buy-to-let landlords will find it more attractive to invest in property via our platform rather than directly due to recent tax changes.
- Any investor with less than £20,000 to invest into a single investment, who is otherwise locked out of the best investment opportunities due to high minimum investment thresholds.
Small to mid-sized property asset managers and developers who:
- Do not have the capabilities in house to on-board and complete all the verification of their investors.
- Have a good track record at property management but want to focus on the property management and not the investor on-boarding and management.
- Carry out offline AML or KYC checks which take too long, are inefficient, and annoy investors.
Characteristics of target market
Investment market size for B2C clients.
UK private rental sector is now worth £1.11 trillion. £486 billion is invested in UK commercial property.
There are c.2 million buy-to-Let landlords in the UK. They have been affected by tax changes to make it harder for them to invest into multiple properties.
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. We provide them a new way to invest that can be more tax efficient.
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.
Property asset managers and developers - B2B clients.
In the last 15 years KYC and AML demands have increased significantly. Many property managers and developers are unable and ill qualified to comply with this increase burden.
We have two customer sources. Direct investors who join our platform and indirect investors who are brought to the platform by the property asset managers we work with.
We are developing a customer base with little marketing spend, allowing us to research and implement a marketing strategy for 2018. 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.
The property managers who use our system are also introducing their investors to Brickowner, giving us a second, free source of customer growth. This combines with our investor base to create a much larger resource that benefits Brickowner and our B2B clients.
We believe our hybrid approach is different to other platforms as we use a complementary B2C and B2B model. To our knowledge no other platform has the same approach as us, with the majority focussing on B2C services only. We believe this hybrid strategy will allow us to grow faster, and more sustainably.
We are different in a number of ways:
- We are not buying and managing property ourselves. We believe that this allows us to scale faster and focus on our core expertise: providing a platform to connect investor and property investment.
- By working with asset managers we can offer opportunities across all the different property sub sectors, allowing our users to better diversify within property.
- We are not restricted just to equity investments, or just to debt. We're able to offer a mix of investment types.
- We can remain flexible on 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.
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