So, what do Homegrown do?
We are an FCA regulated, property development crowdfunding platform, focused on investments in exceptional development projects. We only work with established property developers who have a track record of delivering large-scale projects on time and budget.
We are completely focused on getting the best return for our clients and investors can earn returns of up to 15% p.a. with a typical project turnaround of 2 years. To date we have funded 6 projects in London, with a total gross development value (GDV) of more than £130m.
Despite only launching last year, we have been received a lot of positive press coverage (including The Telegraph, CityAM and The Wharf) and we were finalists for the 2017 Crowdfunding Platform of the Year Award. This was fantastic recognition of our innovative model and early growth as a platform.
What’s behind the business idea?
We strongly believe that a lack of available equity finance is one of the biggest reasons that mid-sized developers are not able to build more homes. Conversely, investors in a low interest rate environment are looking for alternative ways to invest their money to access better returns. Homegrown’s property development crowdfunding platform matches developers with investors through an online platform and as result has the potential to make a positive contribution to the availability and affordability of housing in the UK.
We are also seeing buy-to-let investors move out of the market in 2017 and seeking alternative real estate investments, following recent tax changes, high property prices and weaker rental yields. But, fundamentally we are still not building enough homes in the UK and the supply/demand imbalance, particularly in areas like London and the South East remains. Homegrown provides an attractive alternative to these investors, where projected returns are generated from construction rather than speculating on house price growth.
Was it hard becoming a business owner?
In a word, yes. Setting up and running a business can be an emotional rollercoaster at times, where you live and breathe the highs and lows, but I wouldn’t have it any other way. I was formerly a Chartered Accountant and Associate Director at PwC and I had spent more than 10 years working in Real Estate and Advisory and actively investing in property. I have now found a way to combine my passion in the business, this makes the long hours all the easier.
How did you recruit your employees?
I was lucky enough to be able to start the business with a hugely talented friend from University. But, we recruited our early hires from the start-up ecosystem. We wanted to build a world class team right from the start but we weren’t able to pay world class salaries (or any salaries at the beginning), so it was equally important to find individuals who were talented but who understood the unique challenges of working in an early stage business. Today I believe the management team have the right experience and expertise to make a huge success of Homegrown, having previously enjoyed successful careers with some of the world’s leading firms in real estate, financial and professional services.
Was there a breakthrough moment?
The initial breakthrough moment was in identifying the problem that many mid-sized developers were experiencing in raising equity finance and the positive feedback we received from both developers and investors to our crowdfunding solution. We already knew that our joint-venture investment model worked with professional investors offline and for everyday investors online, through similar crowdfunding concepts in the US. But, we were the first platform to specialise in property development crowdfunding in the UK and the positive feedback from our target audiences felt like a breakthrough moment.
How is the company doing?
We have really gone from strength to strength. Initially the focus was on obtaining FCA authorisation, building a market-leading platform and establishing a network of developer relationships to ensure a consistent supply of the exceptional development projects. After soft-launching the business and proving the concept we focused on fundraising for the business to ensure that we had the resources in place to scale up the business.
After successfully closing our funding round the business is now performing well. Our last development project in Hackney, London sold out the day after it was launched. This was our biggest and fastest raise to date and is clearly positive affirmation of our model from investors, so watch this space…
Do you have any regrets?
No, none. We have learned a lot in developing our platform. What you see today is the culmination of that learning. But in general I prefer to look forward rather than back and we look forward to an exciting future for the business.
What makes you stand out from your competitors?
Homegrown is the first crowdfunding platform in the UK to specialise in property development. This means that for the first time, investors have access to exceptional property development projects, at a low entry price and have access to projected returns generated from construction, rather than speculating on future house price growth. Our model enables investors to co-invest alongside the banks and other professional investors which allows us to offer investment opportunities in sought after locations, such as London and the South East, which is a great unique selling point compared with most of the industry.
What is your definition of a positive customer experience?
I would say that any interaction with a business which goes above and beyond your expectations is a positive one. We benchmark ourselves against firms like First Direct and Zappos who excel in customer experience. We truly believe that we can surprise as well as delight our investor. We aim to make the whole investment process as hassle free and seamless as possible.
You’re currently reaching out for investors, what do you plan to do when you have raised this funding?
We are pleased to say that we have completed our own seed funding round, raising £360k, which included our highly successful Seedrs campaign which almost doubled its original funding target. These funds will enable us to significantly grow the business which means we will be able to offer a larger, more frequent and more diverse range of exceptional development projects. We will also continue to add new features to the website to offer a market-leading customer experience.
If you could help a business now with a single piece of advice, what would it be?
As the eponymous sports brand says, “Just do it!”. I truly believe that the best way to learn is from doing. The only way to see if your idea has a customer is from testing and trying.
Finally, Anthony what is your favourite biscuit?!
Jaffa Cake, does that count?
Risk warning: Please note that your capital is at risk when you invest in property and future performance is not guaranteed and is based on projections only.