Startup Spotlight — Crowd Realty
Background
Crowd Realty, Inc. owns and operates a crowd funding platform for real estate assets and loans/securities backed up with real estate assets in Japan and overseas. It provides stable and mid-long term funding schemes through direct financing for both commercial real estates and privately led urban development including renovation and revitalization of underutilized assets. The company was founded in 2014 by Takeshi Ito, who had previous expertise in real estate and investment banking businesses, and is based in Tokyo, Japan.
In July 2017, Crowd Realty won the Grand Prize in the second “MUFG Digital Accelerator”, and in August was crowned the Grand Champion at the “NTT DATA Open Innovation Contest 6.0”. Also, you can see Ito-san in action with his presentation at FIBC 2017.
Domestically, Crowd Realty had initially raised funds for two projects in Kyoto, Kyomachiya Revitalization Project #1 and #2, which amounted to JPY 72m and JPY 32m, respectively, the latter in a mere nine hours after SBI Holdings had invested in Crowd Realty and a co-operation agreement was signed, that provided SBI Securities’ close to 4 million customers exclusive access to this deal. Across the 89 investors, close to 70% were in their 30s and 40s. More recently, a record JPY 174m were raised for a nursery school in Shibuya, Tokyo.
Internationally, Crowd Realty operates through its partner EstateGuru in Estonia. So far, two projects have been funded.
Team
Kito-san, the Founder and CEO, graduated with a degree in Architecture from the University of Tokyo, and earned his stripes at the Boston Consulting Group and Merril Lynch Japan Securities. Shinsuke Nuriya, the CFO and Head of Real Estate Investment Banking, holds degrees from Keio University and Columbia University, and previously worked in investment banking and M&A at Merril Lynch Japan Securities and Blackstone.
The leadership team in Technology & Operations, with Yasuhiro Kawasaki as the CTO, Haruki Kariya as the COO, and Kyohei Yamada also brings with them impressive credentials.
Approach
There are multiple structuring options for real estate investments. While almost all approaches can be served with electronic documentation, the key to Crowd Realty’s business model is the “regulatory hacking” to gain efficiencies in the “Real Estate Specific Joint Enterprise”, that allows for the lowest initial and lowest operating cost, and could historically only be served with paper documentation.
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