Shojin, the FCA-regulated online property investment platform that lowers the barriers to entry for individuals looking to access institutional-grade real estate investment opportunities, has closed a £5m underwriting facility. Provided by a London-based family office, which has made provision to increase the facility to £10m as deal flow grows, the capital will enable Shojin to guarantee finance for new deals before launching them on its global investment platform.
This underwriting facility sits alongside Shojin’s current Series A fundraise, which is due to complete shortly. The company moved into profitability in 2020 having previously raised external funding of £1.7m from private investors and is on track to generate almost £2m in revenue in the year to June 2022.
Operating in an online real estate investment market forecast to grow from $15bn today to $800bn by 2027, Shojin was created to democratise the market by opening up investment opportunities to global investors on a fractional basis. Typically, such institutional-grade property deals are only accessible to the top 1% of the world’s adult population, who control 45% of global wealth. Shojin enables investors to access this market from as little as £5,000.
The underwriting facility will provide certainty to borrowers and investors, as real estate developers need the funds to be available on the day of completion for the underlying property or land. By underwriting the funding for a specific project in advance of sharing the opportunity with its investor pool, Shojin is able to mitigate any inherent uncertainty in the fundraising process.
Shojin CEO, Jatin Ondhia, said: “We are delighted that we now have access to further capital. Not only does this facility show the confidence our family office partners have in our investment platform, but it will help us provide more diverse investment opportunities for our investors. As a fintech start-up that is already profitable, we look forward to offering more exciting projects for investors as we move to close out our Series A fundraise.”
Shojin concentrates on residential, PRS (private rented sector), senior living, and student accommodation projects providing investors with expected returns of 15-25% per annum. The company specialises in providing junior funding such as equity or mezzanine to mid-market developers who struggle to raise junior capital as their own business grows. This contrasts with the tremendous growth in availability of senior funding since the 2008 financial crisis. Shojin offers investors four core products to cater for their appetite for risk - Development Equity (higher risk), Mezzanine Loans (medium risk), Asset Investment and Bridge Loans (low risk).