Singapore-based real estate crowdfunding site nabs $733k investment

CoAssets, a crowdfunding site from Singapore that lists properties from around the world, has raised S$1 million (US$733,000) in series A funding from undisclosed investors. This values the company, believed to be the first real estate crowdfunding platform in Southeast Asia, at S$13 million, or about US$9.53 million post-money.

The startup previously received seed money from Expara IDM Ventures with support from Singapore government agency Media Development Authority. Jeffrey Chi, managing director of Vickers Venture Partners and chairman of the Singapore Venture Capital And Private Equity Association, also contributed.

Launched in July 2013, the site claims to have crowdfunded S$36 million (US$26 million) for over 15 projects, with a total payout of SS$120,000 (US$88,000) and an average return of 10 to 20 percent. It launched a Malaysian office and will expand to Australia later this year.

The startup reports accumulating 6,000 registered users and a revenue of S$1 million in their first 12 months. 60 percent of the money comes from service fees for using the crowdfunding site. The rest of the revenue is generated from ad sales and organizing networking events. “Our main focus is crowdfunding however, these value-added services contribute to an increase in the usage of our platform,” says a CoAssets spokesperson.

An example of a crowdfunding campaign on CoAssets involved the Lai Thai Luxury Condominium project in Thailand. Two of its units were listed on the site, giving users the choice to co-purchase or co-own them. Investors would receive payouts from rentals and sale of the units. It gave a payout of seven percent to crowdfunders in September 2014.

At the moment, the site isn’t regulated by Singapore’s central bank, the Monetary Authority of Singapore (MAS). It’s unclear if regulations will ever come into play, and how it might be affected by the crowdfunding legal framework the government is working on. Nonetheless, CoAssets says MAS focuses on regulating transactions involving securities. Since real estate are not securities, the startup doesn’t come under the purview of the central bank.

The site doesn’t track the progress of each development, which means investors will need to follow-up directly with the project manager. But the site says it has a few safeguards in place, including personal guarantees signed by developers, agents, and property owners, as well as a cap on how much an investor can put in. Anyone including the rich, the middle class, and companies can back projects, since the minimal investment is just S$1,000.

Tech in Asia’s attempts to register on the site to glimpse at how it functions haven’t been successful. The Facebook login feature didn’t work, neither did the registration form.

What we know though is that the site doesn’t exactly work like Kickstarter. Unlike the popular crowdfunding site, CoAssets doesn’t handle funds or deposits from investors, and acts more as a lead generation site. All monetary transactions occur directly between investors and the property managers. It does handle money for what it calls peer-to-peer lending projects, however.

Property crowdfunding may be new in Southeast Asia, but it’s not new in the United States. Sites like iFunding, Realty Mogul, and CrowdStreet have been around.

The appeal of real estate crowdfunding is this: unlike real estate investment trusts (REITs), which give investors access to a basket of properties, these sites let investors put money into individual properties at lower cost. There’s risk involved though: if a project goes south, investors could lose all their money.

See more: Facebook co-founder and Sequoia invest in Singapore property site 99.co

Update on February 12, 5.45pm SGT: Added responses from CoAssets to Tech in Asia’s questions.