Melbourne-based off-the-plan property marketplace Investorist has raised $2.5 million at a $20 million valuation to accelerate its growth in Australia, Asia and the United Kingdom and launch in the United States.
The startup is a business-to-business platform that connects property developers with agents for off-the-plan property investments. It also manages the relationship between parties, facilitating information exchange, contract and property settlement.
Investors participating in the Series A round include Netspace co-founder Stuart Marburg, Redflex CEO Paul Clarke, and Watersun Properties founder Benni Aroni. There were also a number of other undisclosed private investors. Salta Group, which led the startup’s $1.7 million seed round in 2014, also participated.
Investorist founder Jon Ellis says in Australia there are over 150,000 off-the-plan property transactions a year, in the United Kingdom, around 120,000 and in the United States 700,000.
After launching in 2013 the startup spent the first year searching for a revenue model. It eventually settled on three revenue streams. It charges developers to list projects on the platform, charges property agents interested in those listings a subscription fee to access them, and licenses its software so other companies can build their own portals.
“Last month we generated four times the level or revenue we generated 12 months prior, and our revenue continues to grow 30% quarter on quarter,” Ellis says.
“We’re just 12 months into our revenue journey. But we expect to be cashflow positive in under 12 months.”
Of total Australian off-the-plan property listings, Ellis estimates about 75% are currently on the Investorist platform. He says the cross-border nature of the majority of off-the-plan property transactions, and the fact that they are often conducted by third parties on behalf of individual investors, means the market is perfectly suited to a platform like Investorist.
“These sales occur prior to advertisements appearing in newspapers or consumer portals,” he says.
“Investorist is the only marketplace of its kind to use sophisticated technology to transform a traditionally paper and phone dominated industry.”