Dubai-based real estate crowdfunding platform Stake raised $4 million in an initial funding round to expand its operations.
The company, which was launched in December 2020, will use the funds to scale and introduce new products and features, invest in sales and marketing and grow the current 15-member team, it said in a statement on Sunday.
A consortium of investors participated in the funding round, led by Combined Growth Real Estate, a company helmed by Amer Hammour, who is the founder and chairman of US-based real estate investment management company Madison Marquette.
Other investors include Vivium Capital, a Dubai-based private family office, Verve Ventures, Lama Holding from Riyadh and shareholders of the UK's Chalgrove Properties.
Based in DIFC’s Fintech Hive and regulated by the Dubai Financial Services Authority, Stake allows users to browse through pre-vetted selections of properties and invest from as little as Dh2,000 ($545).
“Our shareholders believe that in today’s world there is a much better way of investing in real estate. Through Stake, we will enable anyone to participate in this asset class in an easy, transparent and digital way,” Rami Tabbara, co-founder of Stake, said.
“This fundraise allows us to build the go-to digital real estate investment platform for Dubai property and eventually the region.”
Venture capital investments in early-stage start-ups that are using technology to solve major pain points in business are growing in the Middle East and North Africa.
Despite the pandemic-related challenges, Mena start-ups secured $1.03 billion in funding last year, up 13 per cent compared with 2019, according to data platform Magnitt.
However, the number of transactions was down by 13 per cent to 496. FinTech and e-commerce retained the top spots by number of funding agreements, together accounting for 24 per cent of the total.
Stake’s portfolio consists of ready units in Downtown Dubai, Dubai Marina and will soon include properties in the DIFC and City Walk, the statement said. The company distributes profits generated from rental income to users every month.
“The Dubai residential property investment market offers very attractive opportunities to investors for growth in value and strong current income, as the current high supply gets absorbed by the very strong demand,” Mr Hammour said.
“Stake allows investors to participate directly in this market and make diversified bets on properties through partial ownership deals.”
Since its launch last year, the property crowd funding platform has attracted more than 4,000 registered users and achieved 30 per cent increase in sales every month, the company said.
“When we launched Stake, we made clear our goal to democratise real estate investment and [provide a] remedy to ills of Dubai’s property market, which prevented the young from participating and delivered unattractive returns for experienced investors,” Manar Mahmassani, co-founder of Stake, said.
“With this fund raise, we can accelerate our journey to radically improve the real estate investment market and bring this tangible asset into the new digital age.”
The company is also in discussions with partners and regulators in Saudi Arabia and intends to expand into the UK, too, the statement added.
Stake’s advisers include Daniel Miller, co-founder of Fundrise, the largest real estate crowd-investing platform in the US, as well as Gaurav Shivpuri and Fadi Moussali, senior executives at global real estate advisory JLL, the company said.