CrowdProperty

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