Multi-award winning online property lending platform offering market leading returns of 7-12% p.a*.
- 354% growth in revenues and 3x growth in lending volumes in 2019*
- £71.9m lent against prime property worth over £410m
- £28m repaid to customers with an average return of 9.5%pa
- Investment conditional upon Future Fund funding - see Key Info
Learn more about convertible loan campaigns.
CapitalRise is a successful, multi-award winning online platform that makes it easy for Property borrowers to raise finance quickly and efficiently and Investors to obtain market leading returns of 7 - 12 % per year** from secured lending to prime real estate.
CapitalRise provides access to institutional grade real estate which was previously only available to those with millions to invest. Founders Alex Michelin and Andrew Dunn bring decades of property financing expertise having founded Finchatton, the international luxury property development firm. They have developed over £2bn of real estate across 120 transactions with no losses.
CEO & Co-founder Uma Rajah is one of the pioneers of the FinTech sector. An early employee at Wonga, Uma was Head of Product and helped grow the firm to over 900 people at peak. In late 2015 she left to found CapitalRise. She brings a decade of FinTech expertise, having successfully launched, developed and scaled over 5 different lending platforms.
Substantial accomplishments to date
Business is revenue positive and growing incredibly fast:
• 354% increase in revenues in 2019 financial year*
• 3x growth in lending volumes in 2019
• 99% increase in capital raised for new deals in H1 2020 versus H2 2019
• £71.9m lent against assets worth over £410m
• £28m of capital and return repaid to customers
• 9.5% per year earned by our customers on average
• Zero investment losses or defaults
• CapitalRise is Authorised and Regulated by the Financial Conduct Authority
• CapitalRise is ranked #1 in both 1yr and 3yr net returns as independently verified by Brismo, the leading loan analytics firm
• Winner of numerous awards including the prestiguous British Bank Awards 2020 - Best Alternative Finance Provider
• Significant press coverage
• Fully automated customer onboarding and bond issuance
• Investors sign up and invest in minutes
• Manage investments online and via mobile
• Resale marketplace allows investors to exit investments early
• Fully automated client money handling functionality with real time notifications
• New borrower portal makes it faster and cheaper to close deals
• New proprietary portal for Wealth Managers - streamlines client onboarding & portfolio management
Top VC investors:
• One of the top 10 Seedrs raises in 2019, 160% overfunded
• £1m raised from renowned Venture capital firm Revolt Ventures
• Exceptional team in place with deep property and FinTech experience
• All founders are investing in this fundraise
*Based on unaudited management accounts
**Based on existing loans
Revenue is earned from fees charged to Borrowers.
• 5-7% of the loan amount consisting of:
- arrangement fees
- exit fees
- interest margin
• 1-3% of the loan amount from other fees such as:
- extension fees
- monitoring fees
• No fees to invest
• 1.5% fee charged to sell an investment on the resale marketplace
• £170m of funding lines from banks and other financial institutions
- £50m secured
- £120m in final stages of closing
• We expect that this will significantly reduce our cost of capital and increase profitability
• We believe this will materially enhance the value of the company over the next 24 months
Use of proceeds
We have seen a surge in demand from customers in the last 6 months.
Borrower demand has increased as our brand recognition grows. We saw an 80% increase in loan applications in Q2 2020 versus Q2 2019 and our loan pipeline is very strong.
Investor appetite is equally strong, £2million raised in just 2 hours - the fastest raise to date. The appeal of our product has increased, aided by volatility in equities and bank interest rates at record lows.
Fundraising now will allow us to capitalise on this huge demand and take advantage of government's attractive Future Fund.
• Technology - Delivery of product roadmap including SIPP launch
• Marketing - Increase the pace of investor and borrower acquisition
• Lending - Bring forward hires in origination and loan monitoring teams to handle our greater volumes
• Investor Relations - Maintain high customer service levels as customer numbers increase
Seedrs is supporting companies who are intending to apply to the Government backed Future Fund. You can read more about the Future Fund here: https://www.seedrs.com/learn/blog/the-future-fu....
In order for a company to be eligible to seek matched funding from the Future Fund, this investment round must be on the convertible loan terms that have been prescribed by the Future Fund for this purpose. These terms differ to our normal ‘advanced subscription agreements’.
Given this product differs from most campaigns on Seedrs, we urge all investors, including regular Seedrs investors, to read the information below and ensure you understand the terms in full before making your investment.
1. Key terms
You will see a term sheet attached to this Campaign in the Documents section which sets out the key terms of the convertible loan and you can see the full document prescribed by the Future Fund here: https://www.british-business-bank.co.uk/ourpart....
A summary of the key terms is set out below, but should be read in conjunction with the term sheet:
Interest: 8% per annum, non-compounding. On conversion events, the company can choose to repay the interest or convert it to equity (generally without the discount). See the Term Sheet for more details.
Redemption Premium: An amount equal to 100% of the principal loan amount
Qualifying Equity Financing. The convertible loan will automatically convert on an equity financing raising at least the total loan amount, at the lowest share price of equity financing less the Discount [or, if lower, the Valuation Cap share price].
Maturity Date: 36 months from signing convertible loan agreement.
The default position is on the maturity date is that the loan will convert to equity unless the investor majority elect to redeem.
If redeemed, the company will repay the principal together with the Redemption Premium.
If converted, the conversion price will be at the most recent funding round share price less the Discount, provided that funding round happened after 20 April 2020 and was at least a quarter of the size of the convertible loan investment. If no such funding round has occurred, conversion will be at the share price of the last funding round prior to 20 April 2020 (no Discount).
Other events of default or conversion: There are various other scenarios in which the convertible loan may convert or be repaid and investors should reference the term sheet:
Non Qualifying Funding Round: The convertible loan can convert on an equity financing round which does not meet the size criteria of a ‘Qualifying Equity Financing”, at the election of the majority of investors under the loan. Please see the term sheet for how this conversion is priced.
Exit: The convertible loan will automatically convert or be redeemed on an Exit, whichever would give investors the higher cash return. Please see the term sheet for how conversion is priced and payments on redemption in this scenario.
Events of Default: The convertible loan is to be repaid on the events of default, such as liquidation or winding up. See the term sheet for more details.
2. Government matched funding
The company intends to apply to the Future Fund for matched funding on the total eligible amount invested in this funding round. Subject to eligibility criteria and the Future Fund's approval, the Future Fund will “match” the funding raised via Seedrs or other eligible sources, subject to a minimum investment of £125,000 and a maximum investment of £5m. The Future Fund is to be allocated on a ‘first come, first served basis’ to eligible and approved businesses, so there is no guarantee that a company will receive the Future Fund matched funding.
This campaign is conditional upon receiving matched funding from the Future Fund. Seedrs will not complete the investment and transfer the funds raised until we have confirmation that the Future Fund matched funding application has been approved and that the Future Fund is ready to make the investment. If the application is denied, the campaign will be cancelled and funds will be returned to investors.
Because this campaign is conditional upon the matched funding, you will see that we have reflected the Future Fund investment as part of the round. It is distinguished in pink in the progress bar of the campaign. This is to give investors an indication of the potential total size of the funding round (and potential dilution on conversion), but to also distinguish it from regular investment through the Seedrs platform.
Seedrs does not charge any fees in relation to the Future Fund matched funding, application process or for acting as lead investor with respect to applications.
3. Conversion to equity
The convertible loan agreement prescribed by the Future Fund is equity focused and favours conversion of the loan to equity as the default position.
Redemption is only available in certain scenarios and is often subject to the vote of majority of the investors. Where a vote of investors is required, Seedrs will vote on behalf of any investors it represents as nominee.
There is a possibility that the convertible loan will convert in some scenarios without the consent of Seedrs (if we do not make up a majority of investors). It is also Seedrs’ position that this is primarily an instrument for investing in the equity of the fundraising business and our default position would be to vote in favour of converting the loans to shares in the company, unless there is a clear or compelling reason not to.
As always, investors should be aware of and accept the risks involved in investing in early stage and growth focused businesses: https://www.seedrs.com/pages/risk-warnings
In addition to the usual risk warnings included above, investors should be aware of and accept the following with respect to convertible loans:
The convertible loan agreement is intended as bridge funding to a future funding round, but there is no guarantee that a company will be able to secure further funding.
The Future Fund is to be allocated on a ‘first come, first served basis’ and there is no guarantee that a company will be successful in its application to receive the Future Fund matched funding.
There is a risk that the Company may not have sufficient funds to repay the loan on the maturity date, pay interest when it becomes due or pay the redemption premium included in the terms.
Convertible loans are unsecured obligations and in the event of a winding up or liquidation event will rank behind secured creditors of the Company.
5. Secondary market
Investors will not be able to sell their interest in the convertible loans on the Seedrs Secondary Market unless and until they have converted to shares in the company (and then only subject to eligibility and the terms and conditions of the Seedrs Secondary Market).
6. EIS Relief - past, current and future
As noted above, the convertible loan instrument is not compatible with EIS requirements, so no EIS applications will be made with respect to investments in the convertible loan.
The government has confirmed that investing in the convertible loan will not impact EIS relief previously claimed on investments in the fundraising company:
“The government has confirmed that such previous investments will not be affected where the convertible loan converts into shares. Where the convertible loan note redeems, we have been alerted that the government intends to make changes to the rules to clarify that this is compatible with such previous investments.”
However, investing in a convertible loan could impact your ability to claim EIS relief on future investments into the same company. The government has not clarified the position on this and has said it is a matter for HM Treasury and HMRC.
Seedrs is unable to provide tax advice. Tax treatment depends on individual circumstances and is subject to change.
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