You’ve heard of crowdfunding but have you heard of crowdfund for real estate? We ask Getty Goh, CEO & Co-Founder of CoAssets Sdn Bhd about this peculiar business and what in the world is this new animal about.
Tell us, what is this business about at CoAssets?
CoAssets (www.coassets.com) is South East Asia’s first real estate crowdfunding platform which aims to connect investors, developers and real estate stakeholders.
Crowdfunding is defined as the pooling of funds, usually via the Internet, to support projects initiated by individuals or companies. The concept for crowdfunding can be applied to profit and non-profit ventures, which gives monetary or non-monetary (i.e. a music album, watch, computer game, free trip, etc.) returns. By extending this definition, real estate crowdfunding simply means the pooling of funds by like-minded individuals for real estate projects.
This is a fairly new concept, how did it come about?
The business concept came about when we realized that there is a gap in this market for developers looking to raise amounts of between RM1 million and RM5 million as banks, financial institutions are not keen to come in at such small amounts as the work does not commensurate the fees. On the other hand, such figures are too big for most retail investors to take on individually. Hence by applying the crowdfunding concept, we are making it possible for some developers to realize their projects by giving them the resources they need through aggregating crowdfunders.
How did you know if this is going to be a good business to have?
My business principle has always been to keep trying because if you never try, you would never know. At this point, we are pleasantly surprise with the results. For example, in our first year of operation, our revenue exceeded RM2.5 million. This figure is a combination of collected income as well as MOUs signed with the various developers. Profit wise, we are within the healthy range of between 10% and 20%. So the results are very encouraging, as it validates our belief that there is a strong demand for crowdfunding services in the real estate sector.
What or who motivated you to launch forward?
We believe that crowdfunding could be the next online revolution. At present, we are at the teething stages of the crowdfunding movement. However, if the crowdfunding industry, as a whole, is able to move past this teething stage, it could reach a stage where people will see crowdfunding as another form of “e-commerce” and use platforms like CoAssets as confidently as ones like eBay and PayPal.
We are often motivated by the feedbacks given by our platform users who find the website useful and this drives us to continuously work on our tools and improve our platform experience.
How would you rate your success now? In which areas do you reckon you’d need to improve on?
I feel that there is still much to be done. We are presently working to develop online infrastructure to facilitate legal and payment transactions online. In time to come, when those infrastructures are in place, CoAssets will be a platform where users can safely and securely crowdfund real estate deals. With sufficient scale and safeguards, it is envisaged that CoAssets will be a platform where crowdfunding opportunities can be securely and easily transacted. We are also in the process of developing research tools for other regions and hopefully in time to come, users from all over the world may be able to use CoAssets platform to conduct their research on real estate.