Singapore-based CoAssets, the first real estate crowdfunding platform in ASEAN which was launch in July 2013, closed a Series A S$1 million ($799,800) investment round led by private investors at a S$13 million valuation.
CoAssets crowdfunds residential and commercial properties in Asia, Australia, the UK and the US. Membership has grown from an initial 200 to over 6000, spread across Singapore, Malaysia and the region. It provides developers, agents and property owners with alternative capital for property projects, linking them to investors keen on co-developing projects and co-purchasing units.
Investors using CoAssets are safeguarded by several measures. These include personal guarantees signed by developers, agents and property owners who list projects, as well as a cap of S$5 million on total investment per project. They reported a revenue of S$1 million in August 2014. This was based on combining collected income with MOUs signed with developers who’d used the platform.
Earlier seed funding rounds were supported by Expara IDM Ventures and Dr Jeffrey Chi, managing director of Vickers Venture Partners (VVP) and chairman of the Singapore Venture Capital & Private Equity Association (SVCA). The funds from this series A will support platform enhancements and ASEAN expansion.
To date, S$36 million ($28.8 million) spread across more than 15 projects to date have been crowdfunded. Investors in those projects have received pay-outs of S$120,000 in total, averaging returns of 10 to 20 per cent.
A Malaysian office is already functional, with an Australian office planned for Q2 2015.
Massolution, a research firm specialising in crowdsourcing and crowdfunding, reported that $2.7 billion was raised by crowdfunding platforms in 2012, funding over a million campaigns that were donation, reward, lending and equity based; they estimate $5.1 billion was raised in 2013.
Crowdfunding is relatively new and is innovative, especially within the context of the Asian property sector. The platform is a multi-sided market bringing developers and owners seeking alternative financing together with investors looking for investment diversification. However, it requires high levels of competence in building, managing and executing the concept.
Developer Thai Treasures Pte Ltd used the platform for its ‘The Lai Thai Luxury Condominiums’ project, listing two units on CoAssets with options to co-purchase or co-own. Investors receive returns when the units are rented out and will receive returns when the units are sold. Thai Treasures made a first pay-out, of seven percent, to its crowdfunders in September 2014.
“CoAssets has brought a very useful financing model for developers like us, with investment needs that may be too small for bigger financial institutions and yet too large for the average investor,” stated Mr Robert Reynolds, Director of Thai Treasures.