Property crowdfunding platform The House Crowd has secured £700,000 from investors, only a month after the launch of their share offer. It is hoped this substantial investment will help the platform exhibit its product to a wider audience, increasing the chances of the business reaching their crowdfund forecast of £100m. This will be used to invest in and develop property in 2016-17.
In line with the valuation pitched to the investors on BBC’s Dragons’ Den earlier this year, the funds of £700,000 were realised for an equity ownership of 3.5% of the company, while a further 1.5% of equity in the company has been reserved as an incentive for staff.
They may have been overlooked by the Dragons this summer, but it would appear that other investors are more confident about the potential of The House Crowd and the crowdfunding sector in general.
Crowdfunding is becoming an increasingly popular trend, with global crowdfunding growth increasing by 167% (to $16.2 billion raised) in 2014. This is up from the $6.1 billion raised via crowdfunding in 2013, further highlighting the rapid speed of growth in this burgeoning sector.
Meanwhile, property crowdfunding is expected be worth $2.5 billion a year and is set to rise to a massive $250 billion a year by 2020.
The House Crowd, reflecting this global trend, grew by 211% in 2014. It employs 11 staff at its Cheshire head office, as well as a further 30 tradespeople who are tasked with renovating the homes bought by investors. The firm hopes to expand even further in 2016, with the creation of at least 12 new jobs.
“Despite the dragons of BBC’s Dragons’ Den choosing not to invest earlier this year, today’s news shows that our loyal investors believe in what we’re doing and want to be a part of the journey to the next level,” Frazer Fearnhead, founder and CEO of The House Crowd, said.
“This investment will allow us to expand, enabling more people to make themselves financially secure without having to deal with the whims of mortgage lenders and onerous small print from the banks.”
