Our Series B Investment in Property Partner
We announced our Series B investment in Property Partner this week, a $22m round together with our friends at Index Ventures and Octopus Ventures.
Property Partner is a crowdfunding platform that allows people to invest in residential property at the click of a button, opening up property investment to everyone. Twelve months after launching, the platform boasts more than 6,000 investors who have invested more than £24m in over 170 properties. The company was conceived and built by Dan Gandesha, the founding CEO, who has built the category leader in just one year of operation.
Until recently, consumers wishing to make smaller financial investments had the limited choice of either buying shares or keeping their money in the bank. The Fintech wave is bringing a wealth of new investment options to consumers from peer-to-peer lending to equity crowdfunding, and now, finally, real estate.
At Property Partner, consumers can buy and sell stakes in buy to let property all over the UK from just £50. Experts source, negotiate and manage properties on investors’ behalf making it much easier to access investment property. The overall returns achieved on properties to date, currently at 13% per year after fees, is very strong in this market. It offers the opportunity for those trying to get on the property ladder to save in an asset class indexed to what they are trying to buy; something that was previously nearly impossible.
Hitherto property has only been available ‘wholesale’; by breaking the bulk Property Partner releases value. And if that was not enough, investors can easily sell their investment on a liquid secondary market removing all the painpoints on the way out of appointing estate agents, negotiating and closing the sale yourself. Having both primary and secondary markets in place from the beginning allows investors to access the primary market with the confidence that they can trade out of their position in the secondary market if needed. This is a great illustration of the transformative power of innovation in Fintech and of a company that is deploying it really well.
Residential property in the UK is a huge asset class, offering a reachable market for crowdfunding of over £250bn of annual property sales, before even considering the opportunity in the commercial and international sectors.
As the first market entrant, Property Partner has established itself as category leader within property crowdfunding and with better and more transparent cost structure compared to REITs. With the lighter cost base of operating as a marketplace without expensive internal property management teams, Property Partner’s expense ratio is more than 50% lower than equivalent-sized REITs.
Property Partner further benefits from the network effects of liquidity on both the primary and secondary markets. The thesis is that the platform with most liquidity will win. Being first with the most money behind it, and the most media and public attention improve the odds of that being Property Partner.
With these signs of growth and opportunity in place, Dawn is delighted to have joined the journey with Dan and the whole Property Partner team, investing in an emerging UK Fintech leader.