by David Drake
The #crowdfunding wave that took off in the US and Europe in the aftermath of the 2008 global financial crisis has since spread into different countries of the world, disrupting established institutional practices of financing a business startup. In particular, the alternative finance landscape of many countries, previously dominated by peer-to-peer lending, has been impacted in a profound way.
Firms in the US real estate industry were among the first to catch the wave but could not launch out due to regulatory restrictions. However, the passing into law of the Jumpstart our Business Startups Act, or JOBS Act, in 2012 allowed them to ride upon it and bring this new investment phenomenon into the mainstream of real estate investing.
The wave also took off in the European real estate industry, however with a lesser intensity than what was witnessed in the U.S. Nevertheless, the few firms present in the industry have been known for their innovative platforms, thus establishing Europe as a leader in terms of innovation.
Developing nations of the world in Asia and Africa have not been left out of this change. Despite the absence of a legal framework for crowdfunding activities in most of these countries, the wave is seen crashing into different industries and disrupting conventional practices of raising funds for business start ups.
This development has not gone unnoticed by regulators in some of the countries that have either just released new crowdfunding laws or are on the verge of doing so. India and Japan were the first to legalize crowdfunding in Asia by passing laws that allow for the practice of equity based crowdfunding. China and other countries are expected follow suit.
As a crowdfunding advocate, I am privileged to have been part of the organizers of the foremost crowdfunding conferences in these regions. It is therefore a delight to watch how the crowdfunding wave is presently causing wrenching changes in their investment landscape.
Here’s a rundown of the 10 leading real estate crowdfunding platforms with operations outside the US, selected according to the number of deals funded and amount of money raised, listed in no particular order:
- CoAssets (Southeast Asia: Malaysia, HongKong, Singapore) — This is Singapore’s foremost real estate crowdfunding platform which is leading the pack in the Asian market. To date, it has over 7,000 members that have invested over S$36 million (about $27 million) in more than 15 projects via its platform. Early this year, the firm has raised S$1 million ($773k) in Series A funding. So far investors have received S$120,000 in payouts with an average return of 10 to 20 percent.
- iFunding (Asia) — In the US, iFunding is one of the leading platforms in the sector and is also one of its pioneers. It came to the spotlight when it launched the world’s first ever app for real estate crowdfunding. In 2013, iFunding Asia was launched, as a joint venture with its New York-based counterpart, across 18 Asian countries. The combined US and Asian operations have raised more than $31 million to fund more than 25 projects on its platform.
- Co-owning (Sweden) – Co-owning is a real estate crowdfunding platform in Sweden that allows accredited investors to participate in international deals. It has raised more than $17 million from project deals in Stockholm, Sweden, and Barcelona.
- TheHouseCrowd (UK) — With The House Crowd, average investors with as little as £1000 can take a foot on the UK “property ladder.” Since 2012, the firm purchased and refurbished 121 properties and has raised more than £10 million (about $15.8 million).
- Companisto (Europe) — Companisto is an equity-based crowdfunding platform in Germany that allows retail investors participate in the funding of startups and real estate projects. Its real estate crowdfunding offer for a five-star-superior luxury resort, Weissenhaus, has raised a historic €7,500,000 (nearly $8.6 million), making it one of Europe’s most successful crowdfunding offer ever. The platform boasts of more than €19 million invested on its platform to fund various projects and start-ups.
- Mayfair&Morgan (Dubai and UK) — Mayfair & Morgan is reputed as one of Europe’s largest property crowdfunding platform having raised over €5M (about $6.2 million) at its launch. With £1,000, an individual can invest in high yield residential properties, with an annual growth rate of 13% to 16%.
- PropertyMoose (UK) — PropertyMoose is a UK-based real estate crowdfunding platform that allows investors with as little as £500 to participate in the UK buy to let property market. Its track record shows that it has 3,167 investors using the platform and has invested £1,074,000 in total. Return to investors in terms of paid rent in 2015 currently totals £11,343.
- Lymo (France) — Lymo is one of Europe’s foremost real estate crowdfunding platform. Launched in 2013, the firm currently has over 3000 members that have invested €906,000 (over $1.1 million) into projects via its platform.
- CrowdfundUP (Australia) — Launched early this year, CrowdfundUP is a Perth-based property crowdfunding platform backed by high-level investors such as BDO Australia. Megara was the first developer which participated in its platform and has raised $500,000 in its Beatrice project deal listed on the platform. Its property developer partners include AYR International, Twin Ocean Property, Australian Development Capital, and Proud Property Group.
- WealthMigrate (South Africa, Australia, UK, Asia) — WealthMigrate is a global real estate crowdfunding platform operating in 5 continents. The firm affords average accredited investors with as little as $10,000 to participate in real estate offerings across the globe. The founders have a combined experience of over 200 years in global real estate investing, have facilitated over 10,000 investments for clients around the globe totalling $1.34 billion in real estate transactions.
Other Real Estate Crowdfunding Players On the Rise
TimesRealtyNews compiled a track list of more than 50 platforms that operate outside the United States. Of these, the following platforms are on the rise, and it would be wise to be on the lookout as to their progress (in no particular order):
- Citylize.com (France) — Citylize is one of the few real estate crowdfunding platforms in France. Minimum investment on the platform vary with projects. So far, it has raised about $125,000 to fund a project.
- ByootCapital (UK) — ByootCapital is an investment firm offering a hybrid of equity- and debt-based facility to investors in the UK real estate crowdfunding industry.
- Crowd2Let (UK) — Crowd2let is a platform in the U.K that specializes in crowdfunding residential properties. It allows individual with as little as £500 (about $780) invest in the fast growing U.K property market.
- Deitscho (Africa & Caribbean) — Although Deitscho has some operations in its New York office, its Jamaica and Johannesburg operations are making a track record in the real estate landscape.
- CrowdProperty (UK) — CrowdProperty is a peer-to-peer lending platform for those seeking to participate in the UK property market.
- WallRise (Europe) — Wallrise is a real estate crowdfunding platform with operations in major European metropolitan markets.
- Property Crowd (UK) — Property Crowd is the first firm in the UK real estate crowdfunding industry to operate under the FCA regulations. The firm accepts a minimum investment of £5,000 (over $7,500).
- Open Avenue (Canada) — Open Avenue is one of the few real estate crowdfunding platforms in Canada.
- Tessin (Sweden) — This is a Swedish-based real estate crowdfunding platform founded in 2014.
- CrowdLords (UK) — Crowdlords is an equity-based crowdfunding platform in the U.K that seeks to facilitate the participation of average investors in the U.K. buy-to-let market.
- Durise (Middle East) — Durise is the first real estate crowdfunding platform in the Middle East. The Dubai based firm seeks to simplify real estate investing first in Dubai and then in the Middle East.
Image credit to www.focusauto.fr
Note: This article originally appeared on Investor Intel with this link http://investorintel.com/market-analysis-intel/fast-furious-10-leading-real-estate-crowdfunding-platforms-outside-us-2015/ on June 29, 2015
David Drake is the Chairman of LDJ Capital, private equity advisory; Victoria Partners, a 110 family office network; Drake Hospitality Group; and The Soho Loft Media Group with divisions Victoria Global Communications, Times Impact Publications, and The Soho Loft Conferences. Reach him directly at David@LDJCapital.com.