Alternative financing for the real estate market in Spain is becoming increasingly popular. Within this segment, crowdfunding is beginning to be implemented strongly in the country and is becoming another way of attracting money for real estate companies and developers.
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The StockCrowd startup
The StockCrowd startup is one of the companies responsible for the consolidation of collective financing among real estate firms thanks to the development of software that allows companies to carry out crowdfunding campaigns from their own website, thus eliminating any intermediary. “You could say we are the decentralization of crowdfunding. Any organization in the world, through our cloud software and from their own website, can raise money for their projects, without going through a platform or competing in a showcase,” explained Sergi Pallarès, CEO of StockCrowd.
The company was born at the end of 2015 and “the first client was obtained in October 2016,” said the manager. In 2017 the startup had a turnover of $75.000 (€70.000) from six clients, in 2018 it had a turnover of $324.000 (€300.000) from 30 clients and it was “in 2019 when we really took off, with a turnover of one million euros from more than 130 clients”, said Pallarès, who pointed out that this year the objective is to double these figures with “two million income and 300 clients.”
“We work with a profile of a medium company in terms of asset management volume, but we are already beginning to be approached by really big real estate and development companies,” says the founder of StockCrowd, who details that the first fundraising campaigns were an average of $129.000 (€120.000) and now they are already $432.000 (€400.000).
“We currently have financing projects of more than one million euros on the table,” he points out. Throughout last year, its software moved $6.1 million (€5.7 million) in the real estate sector and its goal is to reach $18.3 million (€17 million) in 2020.
The rise of this model
“In the financial sector there is a clear concentration and credit is what it is. What we see is that there are certain companies that have reached the credit limit with the banks and need to look for alternatives,” Pallarès pointed out.
Moreover, on the investor side, the attraction of this collaborative formula lies in the high returns it offers. Of the 34 projects that are currently active on its website, the estimated average return is 9.7%, although there are specific developments that offer more than 18%.
Database for investors
“Our tool, in the end, allows the developer to create its own database of investors, that is the key,” the manager pointed out that “the average outlay in alternative investment in the sector is below $3.200 (€3.000), while our average ticket is $11.300 (€10.500). We have a more sophisticated model than that of a traditional platform.”
To start the project, Pallarès, together with his partner Javier Villacampa, raised $1.1 million(€1 million). In 2018, they opened another round in which they raised $3.7 million (€3.5 million), which gave entry to Asian capital. Now the firm has opened another process to raise $3.7 million (€3 million), with which to grow internationally.
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First published in elEconomista.es, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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