Community Research and Development Information Service - CORDIS

H2020

RealtyBundles Report Summary

Project ID: 735751

Periodic Reporting for period 1 - RealtyBundles (Connecting real estate agencies with worldwide investors)

Reporting period: 2016-07-01 to 2016-09-30

Summary of the context and overall objectives of the project

RealtyBundles project aims to provide a novel and disruptive business model for the 300,000 real-estate agencies in Europe and millions of employees and experts in the real estate domain. The RealtyBundles service aids agencies to provide a global, online and liquid real estate trading service (marketplace) providing them with worldwide exposure to investors through crowdfunding model. European real estate crowdfunding market is estimated to have reached €1.1 billion in 2015, after a 150% growth from 2014 suggesting that RealtyBundles is on the right time and place. Differently from existing crowdfunding solutions which connecting real estate developers looking for cheap financing with investors, through high yields and risk, RealtyBundles business model connects the real estate agencies (not developers) and targeting at first the existing residential property market , providing moderate yields with lower risks. We have verified our business model with all stakeholders including key agencies, investors, RE and financial experts. The REA’s sector and mainly the smaller ones are facing today an increasing challenge to compete with online information platforms that connects sellers and buyers directly. We aim to revive the essential role of middleman and impact the REA’s business by increasing their revenues by 20% in 2022. For small investors, who are interested in RE investments, we are creating a global service, allowing them to diversify their investments portfolio anywhere with just small amounts. We aim to become the pan European real estate crowdfunding platform, by engaging local agencies and experts (like Airbnb did) and create a scalable system that once verified will be replicated throughout the entire Europe and beyond.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

The main objective of our Phase 1 project was to assess our assumptions regarding our strategic plan for commercialisation, and to define by preparing a comprehensive Feasibility Study and Business Plan, how we can best exploit this service in different geographical markets, which might imply different legal environments and market strategies. Additionally, we have defined the necessary tasks for the next phase of the project. Main results of our Phase 1 project can briefly be summarised as follows:
Market Assessment and Go-to-market Strategy: We have assessed demand for RealtyBundles surveying potential investors and business partners in various territories in Europe, including UK, Germany, France, and outside Europe in Israel and USA. This confirmed willingness to pay among targeted clients (investors) and willingness to participate among targeted business partners. We have also assessed revenue opportunities by estimating the size and dynamics of the total available market (€245 billion) and specific target crowdfunding markets (€1.1 billion with 150% growth/year) suggesting a great potential and growth. Based on this market assessment, RealtyBundles go-to-market strategy has been defined, both regarding targeted investor markets and targeted property markets.
Business Development, Team and Partnerships: The success of the RealtyBundles model is highly dependent on devising, establishing, and operating a network of external partnerships; the “business ecosystem” of RealtyBundles. We have consolidated and finalised the partner roles necessary for the development and operation of the RealtyBundles service, concluded partnerships on primary markets We also identified potential partners on consecutive markets.
Regulatory and Compliance Strategy: As the financial services segment RealtyBundles operates in is strictly regulated, we have assessed all the regulatory and compliance requirements of market entry. A detailed Regulatory and Compliance Strategy laying down laying down all the necessary steps for conducting commercial activities in all targeted countries (freedom to operate).
Technological Development: We have made a good progress with our platform key technological developments, we have worked on integrations of plugins, and developments related to bundles, accounts, and map. We have also defined, with the involvement of our key partners (i.e. future users of RealtyBundles) the key requirements regarding the RealtyBundles future features. Based on this we have slightly refined our product specification, we have enhanced our functional architecture of the platform and the detailed work plan for the phase 2 period development.
Sales and Commercial Plan: We have updated our business plan based on the results of the above feasibility assessment activities.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

Our service is built on the increasingly popular real estate crowdfunding model that enables investment in properties with low amounts by pooling together several investors. RealtyBundles, however, will enable investors to better diversify their investments through a new concept we refer to as “Bundles”. Bundles are sets of properties: for example properties in a certain city district, entire city, or even a country can be grouped into a single regional bundle. For the investors, the bundles concept provides lower investment risk through diversification, as well as reduced costs and increases liquidity of investment. We claim that our bundles concept can be understood as something in between today existing crowdfunding services (single project/property) and RE funds services (any and many projects/properties).

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