Stake Raises $8 Million in Pre-Seed Funding to Allow Global Investment in Local Properties

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Stake Raises $8 Million in Pre-Seed Funding to Allow Global Investment in Local Properties

Founded in 2020, Dubai-based startup Stake is offering investors from across the globe to buy fractions of rental property in UAE to have a rental income stream. The platform, abiding by all real-estate rules in Duabi, suggests to have attracted users from more than 80 countries.

In 2021, the company raised $4 million in seed round and now has raised an additional $8 million in pre-Series A, from several venture firms.

“This round is a testament to what we are building at Stake and our mission to bring access and liquidity to the oldest, largest, and most sought-after asset class in the world. The proceeds will allow us to expand into Saudi Arabia and Egypt, continue attracting the best talent to the team, and cement Stake’s position as the category leader in the MENA region,” Manar Mahmassani, one of the co-founders, told TechChrunch.

According the Stake, it lists premium properties on its platform that are already on rent. These properties are acquired using variables like location, quality of the build and if it's already rented. Rami Tabbara, another co-founder suggested that if the property is meets the prime location and quality, then Stake lists and rents the property quickly, so the investors have more options available. As of now, there more than 44 properties on the platform, valued at ~$20 million, with a growth rate of 17% monthly, in both investors and assets managed (AUM) on the platform.

Users can invest from for as low as $136 and max up to $50k/year, based on Dubai investment rules. Stake also limits an individual investor to max out at 33% ownership in a single property, to ensure distribution of gains across the investment pool. Stake does not acquire home, rather all the money comes from investors. The max investment term is 5 years, but if the value of the property appreciates by 30%, the investors can vote to sell it.

Stake makes money by charging investors 1.5% on purchase and 0.5% annually for maintenance. 2.5% is charged when stake in a property is sold and 15% if the property is sold at a rate higher than its acquisition. There are other mandatory charges such as 0.2% Know Your Customer (KYC) and Anti-money laundering fees upfront and 0.1% annually from the second year of the term. The company is yet to be profitable, but has achieved 470% in YoY revenue growth.

The new money will be used to expand in other countries like Egypt and Saudi Arabia and to allow for second-day trading, where investors can sell their stake in a property to other investors. The third area in focus for Stake is to allows investors to invest in vacation properties that are listed on platforms like Airbnb and Verbo. Whilst, Stake has minimal competition from likes of SmartCrowd, it believes to itself to be better positioned based on AUM.

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