Funding Hub, an alternative financing for the real estate sector

Funding hub is the first Italian company specialised in offering alternative finance to leading real estate developers. It allows real estate companies access to much more flexible forms of financing than traditional channels, usually represented by crowdfunding platforms and other types of so-called traditional investors.

“We specialise in selecting and evaluating only the best investment opportunities, and are able to do this thanks to a sophisticated evaluation process that we have developed over the past few years,” explains Niccolò Pravettoni, CEO of Funding Hub. “This is why different categories of investors rely on us for access to these high-investment opportunities they would otherwise be unable to find on the market.

Funding Hub started dealing with alternative financing in 2018 and in about 3 years it has already financed about 50 investment opportunities throughout Italy by disbursing more than 20 million euros which have allowed its investors to benefit from returns of double digits on an annual basis. “We are currently focusing on acquiring new professional investors, both Italian and international, and our goal is to raise over 100 million euros within the next three years,” Pravettoni announced.

Funding Hub has chosen a streamlined and highly efficient structure made up by a young team that has always been passionate about new technologies and aims to bring them into a traditional sector such as real estate. By also collaborating with highly qualified professionals with decades of experience, it is able to develop new skills in order to offer its investors an optimal service.

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REVIVA, the first startup that animates real estate auctions

Reviva is the first startup created to liven up real estate auctions’ buying and selling. It uses predictive models and machine learning along with an experiential marketing process to reach potential buyers in the traditional real estate market, making them aware of the auction market and helping them find the right property for them. The goal is to help them understand its true value and get them to buy at a fairer price.
We interviewed Co Founder and CEO Ivano De Natale.

How was the idea of REVIVA born ?

Italy has the sad record of being the country with the highest number of NPLs in Europe: loans that banks have given and debtors have not been able to repay. There are calculated to be about 325 billion circulating in the Italian system. When an NPL is guaranteed by a real estate the only way the bank has to recover its credit and the debtor to repay it is by auction but, due to a cumbersome and obsolete mechanism, 72% of the auctions in Italy are deserted. This means that nobody shows up to buy the properties which are then sold after 5 years on average at a price much lower than their market value. This has a strong impact on creditors, who are unable to recover the amount paid, debtors, who are unable to repay, and the company suffering from liquidity. In addition to this, the value of the auctioned houses pulls down the value of the properties put up for sale on the traditional market. Our solution was to founding Reviva.

How does Reviva affect the industry?

We have managed to increase real estate auction sales by 43% and one out of four times our buyer is the one who wins the property because he or she has understood its value. All this has a positive impact both for banks and creditors who are able to recover larger sums, for debtors, who are able to repay, and on society, which finally has a more prosperous economy thanks to the injection of liquidity.

What stage of growth are you in?

Right now we are in the growth phase and we have already positioned Reviva on the market: we are recognized as a leader by our clients.
As far as fundraising is concerned, so far we have done bootstrapping: my partner and I invested all our savings initially in the company and then we invested all the profits in marketing and technology. We are launching our fundraising campaign which will take place in three parts, one part as convertible financing by an institution, another part with equity business angel financing that also brings experience and a third part through crowdfunding. We will finish our campaign by December 2020

What do you expect from entering the Fintech District?

Entering the Fintech District allows us to create and build relationships with other startups and companies and institutions in the financial world. During this period, actually,we are about to conclude a partnership with another fintech that is active in the real estate lending and crowdfunding branch.

What is your team like?

Our team is composed of 16 people all located in the tech, data science, administration and commercial areas. The average age is between 25 and 30 years old: my co-founder partner is 30 and I am 38, together with some other commercial people we are the oldest in the company. To find some older people you have to look at the advisors: nine of them who helped us in the first years of our startup and who have an average age between 45 and 55 years.

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Crowdestate: from Estonia to Italy and ready for two other markets!

Crowdestate is the main real estate crowdfunding platform born in Europe in 2015 connecting private investors and companies investing in a professional way in real estate. Thanks to the Crowdestate platform investors can select and invest their liquidity in investment opportunities in the real estate sector and thus gain an economic advantage. At the same time, real estate companies can find an additional and innovative source of liquidity that allows them to grow flexibly and very quickly.

Niccolò Pravettoni, Country Manager Italy, says that “the crowdfunding market was born around 2010 in the United States and after a few years arrived in Europe with its first platforms in the Baltic market, the first innovative European hub for crowdfunding platforms. It is not by chance that Crowdestate was born in Estonia, a few years later: exactly in 2014″.

After the first two years of activity this fintech decided to open new offices and new markets arriving in Italy, in Milan, in 2018, continued to grow: “today we can count more than 50 thousand investors who have financed investment opportunities for over 100 million euros with an average return on investment of over 10% on an annual basis” explains Pravettoni. Crowdestate, since its inception, is continuing to grow and has a team of over 20 people located in 7 offices in major European cities. “We expect to be operational in the coming months in two new countries”. In Italy the team is very young and always looking for new talents and new collaborations. Right now they are looking for a new business developer to increase business on the Italian market.

Taking a look, together with Pravettoni,at the situation of the real estate market today he explains that in recent years it has experienced positive moments with growth rates always on the rise, especially in big cities, but “the crisis of 2008 had a very big negative impact on the sector and this is still evident today especially with regard to access to credit”. Medium- and small-sized companies are still struggling to access credit from the banking channel and find in Crowdestate “a fast and flexible source of innovative liquidity that allows them to finance their investment opportunities and grow faster”.

For investors, amongst other things, it is not a good period because, as Pravettoni explains,, “it is difficult to find interesting investments in the market. Through Crowdestate they can participate in real estate investment opportunities of a significant cut in which they could not have taken part as individuals and thus participate and benefit from very interesting returns with investments that can start from very small figures, even 100 euros”.

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Recrowd, the real estate crowdfunding according to Gianluca De Simone

Recrowd is an innovative startup that was founded in October 2018 to offer savers an alternative way for investing their savings by digitizing and simplifying the investment process through lending crowdfunding and using an easy-to-understand asset such as real estate. Through this platform we offer people the opportunity to invest in real estate even if they do not have large capital, lending their money at a rate defined in advance. On the other hand, we offer companies operating in the real estate sector a fast and secure solution to raise funds and easily manage all the bureaucracy related to the individual real estate project.

Recrowd works mainly with companies operating in Italy and offers them 4 types of projects to present to investors on the platform. “These types differ in risk, minimum capital, duration and return. In order to make the most of investors’ capital and to adapt as much as possible to their risk profiles – explains Gianluca De Simone, CEO of Recrowd – we are also the first real estate crowdfunding platform to have included personalized negotiations that allows the negotiation of the rate at which money is lent between the company that proposes the project and the investor user registered on the platform”.

To finance the activities of the first 4 months Recrowd launched an equity crowdfunding campaign in March 2019 with which it raised 418 thousand euros selling 12% of the company shares. “This allowed us to put together an under-30 team of 6 people who interface with the company’s contacts every day in order to better structure all the processes related to the crowdfunding campaigns that will then be presented on our platform – explains De Simone – We have placed ourselves in a fast growing market with the right timing. Investors on our platform are growing monthly and we are increasingly aware of, and confident, in the possibilities that crowdfunding offers in this sector. We are still at the beginning but conditions are more than good”.

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CrowdFundme. A continuous growth since the stock market listing, even during the pandemic

How’s Crowdfundme doing a year after its listing on Piazza Affari? How is crowdfunding equity getting on during quarantine? Tommaso Baldissera Pacchetti, Founder of Crowdfundme, tells us what he thinks about this, with a lot of pragmatism but also a lot of initiative, a distinctive characteristic of his company.

From March 2019 to the present, let’s retrace the milestones of your growth in these 12 months from your listing to date.

With the listing on Piazza Affari, CrowdFundme has become the bridge between fintech and traditional finance. The capital raised with the stock market landing served to accelerate our growth, especially in the second half of 2019. In fact, the portal raised more than 6.2 million euros compared to approximately 3.7 million euros in the first six months. In 2019, Consob also introduced important regulatory changes, thanks to which this year we will be able to implement the,so-called secondary market,and also place Mini-Bonds. CrowdFundMe will thus become the benchmark for Crowdinvesting, being able to offer a wide range of both Equity and Corporate Debt investment products.

Entering the real estate market. Why this choice and objectives?

The real estate market presents great opportunities, starting from Milan which is the most dynamic Italian city in this sector and the envy of several European metropolises. The data for the first quarter of 2020 certifies the potential of Real Estate Crowdfunding: it has collected over 14 million euros, improving on the record of the last three months of 2019. CrowdFundMe wants to allow investors to seize the potential of this sector, fully in line with its philosophy of offering different financial products for different types and markets, in order to build a diversified portfolio.

With the coronavirus emergency how have you changed your business strategy and the way you work as a team?

CrowdFundMe is fully operational, in the maximum security of all, thanks to smart working. The coronavirus emergency has made us reprogram part of our activities, with the aim of prioritizing the campaigns of companies that are relatively impacted by the coronavirus or that are possibly accelerated. This is the case of Tulips, an online supermarket that is benefiting from the e-commerce boom; people, forced to stay at home, are increasing the use of the web to shop and our broadcaster is recording a strong increase in demand and turnover. Its campaign has closed in the last days reaching a maximum target of 300,000 euros.

From your point of view what will be the impact of this pandemic on the crowdfunding sector, both on the corporate and crowd side?

Due to the coronavirus some Equity Crowdfunding campaigns will be postponed until better times. Investments, especially in some sectors, are likely to slow down. However, as explained for the case of Tulips, there are realities which are being accelerated by the current circumstances. If, on the other hand, we think of the companies that are suffering, it has to be said that the liquidity crisis is pushing many of these to use alternative financing. CrowdFundMe’s products are therefore becoming essential to find the resources needed to overcome the difficulties of this period and prepare for the reopening phase. To date, many elements are uncertain and it is not possible to make precise forecasts, but we are confident that our ability to adapt to the circumstances will allow us to continue on our path of growth. If we look at the first quarter of 2020, CrowdFundMe’s results were positive despite the impact of the coronavirus, with the collection marking a new record at around €4 million.

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Third Fintech Nights: let’s talk about Proptech

The third edition of Fintech Nights, scheduled for March 3rd, will be dedicated to Proptech. On the rooftop of “Copernico Isola for S32” we will recount the evolution of this sector between Shared economy, Smart real estate & Real Estate Fintech, together with our community of startups and some big players who have been invited to illustrate their point of view on how the real estate world is changing.

Why proptech?

In the last year and a half, the number of Proptech startups operating in Italy has almost tripled from 40 to 108. Of these 68% are based in Northern Italy (half of them in Milan) and just under 10% coming from abroad (Spain, Estonia, Holland, Portugal, USA, Switzerland). The sector is growing strongly and appears to want to reach the levels of Germany (238) and Spain (305), but is still far from Great Britain with its 805 proptech startups (PropTech Monitor 2019 data). There is also a big gap in terms of funding involving hundreds of millions of euros in the UK market and a few tens of millions in Italy.

In the Italian proptech scenario we have chosen to explore, there are vastly different realities which, according again to Proptech Monitor, can be divided into 4 categories: 30% operates in the real estate fintech category (brokerage, crowdfunding, investments and auctions), 25% in the professional services category (blockchain to validate products and processes, marketing, consulting and management), 25% in the sharing economy category (community life management, hospitality and short rentals, event spaces, marketing, coworking) and the remaining 20% belongs to smart real estate (facility & property, smart building, VR and AR).

On the occasion of the third edition of Fintech Nights, we will further deepen our knowledge of the topic by giving an overview of the sector,thanks to the insights from our members, and illustrating the future trends indicated by our international community. We shall end the first part of the evening with Applied Innovation cases. In the second part some big players like Airbnb will be our guests and explain their vision of the evolution of proptech in Italy and in the modern world, followed by a Demo Session Startup with Crowdestate, Walliance, Re-lender and Housers.

At the end of the session you are invited to stay with us for the cocktail party: a special moment of networking under the stars on one of the most beautiful rooftops in Milan!

For more information and registration, click HERE

Walliance goes to France

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For Walliance, 2019 was a splendid year, raising 61% of capital compared to 2018 and preparing for the launch of its platform in France. We met with Leonardo Grechi to get a better idea of the present and future of this brilliant Italian proptech.

What do you think was the main reason for your success in 2019?

Communication. We chose to speak clearly and transparently to investors explaining the company’s needs and responded well by increasing both the number of investments and the amount of money invested for individual projects.

The 3 most important projects of the year?

Milano NOLO and Milano Naviglio Grande and a project on Florence, all of which developed during the second half of 2019. They were the most significant because we raised a lot of capital in a very short time: one million in 5 hours in the first, Milano Nolo; 1.650 million in 3 hours on Milano Naviglio Grande and 3 million for the Florence project in 5 hours.

For this year you have announced the launch in France. With what objectives?

That’s correct. We have actually already opened there as already authorized by AMF, the French Consob. The goal is mainly to gather projects to allow Italian investors to invest in the French market. In the second phase, we would also like to allow French investors to invest in the Italian market.

Why in France?

We noticed that from the point of view of corporate law it is a country similar to ours, so of all the countries in the union, it was the one where it made the most sense to go to from our point of view. We are also waiting for the European regulation on crowdfunding that will allow us to cross-board with other countries as well.

How do you think the Italian Real Estate Crowdfunding market is doing?

It’s really growing. The numbers are double-digit year-on-year. This is partly due to the general trend of crowdfunding, but in real estate, resources are being raised for projects that have a bigger average cut, definitely bigger than a startup, and that’s why the volume of money is increasing.

How could this further growth be encouraged?

By clarifying the regulations since there is a big difference between crowdfunding and lending crowdfunding equity platforms. Finding harmony between these two instruments, also from a regulatory point of view, can give a big hand to the whole sector for its growth.

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Real Estate Crowdfunding between Italy and Portugal. The opinion of João Távora (Housers)

In the spring, João Távora was designated International Managing Director of Housers for Italy and Portugal. What better opportunity to ask him about real estate crowdfunding in these two countries and find out what his goals are in Italy!

In your role as responsible for Italy, what kind of goals did you set for our country?

We are still working on the strategic plan for the upcoming years, which includes a reassessment of 2019 quantitative goals. Basically, we are talking about the number of investors, the amount invested by those and the amount raised for real estate projects in Italy. Concerning more qualitative goals, we aim to be recognized as a reference all around Italy, as both an alternative and a complement to the traditional financing tools available to the real estate market

In your opinion, what are the main differences of the Italian real estate market compared to the other countries where Housers operates?

The main differences between the Italian market and the other two where Housers operates (Spain and Portugal), are basically related to the Real Estate cycle in which we currently are and the growth expected for the near future, affected by the overall macroeconomically environment in Italy.
Regarding the Real Estate cycle, while Spain and Portugal have started experiencing significant year-on-year price increases since 2015, meanwhile in Italy the prices only stabilized in 2016 after several years of contraction. On the other hand, the expected growth pace for prices in Italy is also significantly lower, especially due to the existing high supply and slow expected overall economic growth which affects affordability.

How is the economic and legislative landscape in Italy for crowdfunding, compared to Spain and Portugal? Better or worse at the end? Why?

Concerning the legislative landscape, Spain and Portugal both have a very similar situation. In both countries, there is specific crowdlending legislation and correspondent regulation. On the other hand, Italy sees a more similar landscape to the German one, where the provision and offering of lending-based crowdfunding services weren’t expressly regulated.
As far as I know, the Italian legislator has focused on regulating the activity consisting in the administration and operation of online portals focused on streamlining the raising of capital.
Being it different from what we have in Portugal or Spain, which we know well and comply with, the Italian legislation requires an extra effort and resource consumption (both financial and personal). The ideal situation would be to have a European crowdlending law in place as soon as possible, that would enable platforms to operate cross-border in different EU countries the same way as banks do with their passport, without being asked for any more licenses or comply with totally different requirements from one country to the other.

Is there any significant interest in real estate crowdfunding in Italy from international players?

Sure. I think it is due to 3 main reasons:

  1. • The Real Estate crowdfunding has grown exponentially in the last few years among small and large investors that are looking for attractive returns on their investment. The crowdfunding applied to the Real Estate market has also made it a more accessible sector for everyone.
  2. • On the other hand, the Real Estate crowdfunding is also very popular among Real Estate developers that are looking for funds to develop their projects and they see it as an attractive alternative/ complement to the traditional ways of funding, mostly due to its flexibility and velocity.
  3. • The popularity of crowdfunding among investors and developers combined with the recovery of the Italian real estate market has awakened the interest of both national and international players. More and more new Real Estate investment platforms are emerging in Italy led by national or international groups.

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House4crowd: interview with Francesco Chechile

House4crowd is a real estate crowdfunding platform that aims to digitize real estate investments. Everyone can invest in the real estate market starting from 500 euros and choosing between different types of projects to create their own real estate portfolio with the aim of maximizing their performance.

This real estate crowdfunding platform has been authorized to operate by CONSOB as an equity crowdfunding portal in July 2018. The first projects will be published by the end of the year.

Last October, House4crowd became part of the Fintech District. CEO and co-founder Francesco Chechile considers it “the Italian reference point for the Fintech and Proptech sectors to which we belong”.

The House4crowd team aims to find in this community other startups and companies that can collaborate with its platform. For this young company, the aspect of networking and the idea of being able to get in touch and confront the whole Italian fintech ecosystem is also important.

Meanwhile, House4crowd is also taking action abroad developing partnerships with international companies and “we will also soon be able to see, among the proposed projects, also real estate transactions in the European and American markets”.

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