The specialist peer-to-peer lender has secured £100m of loan capital as it launches a public crowdfunding campaign, already oversubscribed, that values the business at more than £15m.
Having raised £100m from an unnamed “major institution”, CrowdProperty will use the funds to expand the number of property projects it backs over the next 12-24 months.
Mike Bristow, chief executive of CrowdProperty, said the backing improves the firm’s capacity to fund larger projects. He said: “This increases our appeal to borrowers and brings in additional income, allowing us to invest further in our origination strategies, leading to a greater number of project applications. This will result in an ever-increasing number of quality opportunities for retail investors to employ their capital and earn inflation-beating, first-charge secured returns with us.”
The company uses an online platform to invite development proposals which are then vetted by in-house property professionals before being approved and released for finance to the public. The business boasts a 100% repayment record of loans and average 8% returns.
Bristow believes SME property developers are “poorly served by traditional lenders” but are “increasingly important in tackling housing under-supply”.
He hopes to address this challenge by providing more property developers with “quick, straightforward finance and outstanding service, no matter the economic climate”.
“The introduction of financial institutions to our funding mix will only grow the number of quality investment opportunities available on our platform,” he continued.
“We will continue to stay true to the core ethos of peer-to-peer lending; additional capacity, especially at larger project sizes, will drive more high-quality, first-charge secured lending opportunities for every investor, big or small.”
The Birmingham-based firm has to date financed £30m of development, helping to deliver 500 British homes valued at a combined £80m.
Meanwhile, the business has launched a public equity campaign on crowdfunding platform Seedrs.
CrowdProperty has already surpassed its £600,000 investment target, raising more than £700,000 from a mix of public and existing investors. The firm’s valuation is listed as £15.7m on Seedrs.
Speaking of the campaign, Bristow added: “Having proven the systems and processes prior to our last equity fundraise, since then we proved that we can rapidly scale the business with investment, building up an exceptional rate of direct origination of quality property projects.
“This, coupled with the recent £100m backing from a major institution and an engaged base of retail lenders, provide very strong lead indicators for our next phase of growth.”