Dubai-based real estate investment platform Stake has raised $4 million in a seed round led by Combined Growth Real Estate, it announced in a statement today. A local family office Vivium Capital, European VC Verve Ventures, Riyadh-based Lama Holding, Saudi angel investor Mishaal Alireza, and the shareholders of United Kingdom’s Chalgrove Properties Limited also participated in the deal. The lead investor is a company led by Amer Hammour, founder and chairman of Madison Marquette, a US-based real estate investment management company with $6 billion of assets under management.
Launched less than six months ago, Stake wants to make real estate investments easy and accessible. The corwd investing platform allows users to invest as little as $545 (AED 2,000) in income-generating residential properties. The startup handpicks properties to list on its platform, enabling users to invest in them. All the properties are listed with their specifications and forecasts, making it easy for users to make an educated decision.
Once the target of the asking price is achieved, Stake acquires the property on behalf of investors and rents it. Every investor then receives their portion of proceeds collected from the rent in their Stake wallet on a monthly basis. They can withdraw the money or invest it in other properties on the platform.
The investors also receive bi-annual updates on the status of their investment including the latest valuation of the property and when the property gets sold (which is done after voting among investors), they receive their principal amount plus the share of the increase in value of the property. Starting from acquisition to the sale of property, Stake manages everything on behalf of investors – including registration, handling the property manager and rent, and coordinating votes at the time of property disposal. It also has plans to introduce a secondary market within its platform – using which users will be able to sell their stake in a property to others.
The fintech was founded by Rami Tabbara, former Senior VP of Sales at Damac Properties who has over 15 years of real estate experience, and Manar Mahmassani, an investment banker with over 15 years of experience at Deutsche Bank and Falcon Group.
Speaking about the problems they’re trying to solve with Stake, Rami told MENAbytes that enabling investments as low as AED 2,000 opens up the market for people who have always wanted to invest but could not afford to or did not want to lock up a big chunk of their capital into one asset, “Secondly, we allow people to diversify their investments into more than one property in different locations. This lowers the risk heavily by reducing the vacancy risk. If one flat is empty for a month then the others will be rented which maintains the income flow. Thirdly, and most importantly is transparency. A lot of the players in the industry tend to hide the real data in respect to transactional pricing and are more focused on hitting their sales targets to maximize their commission payouts from either the brokerages or developers. We are transparent in all of our information and processes. We will only list properties that we would invest in ourselves.”
Commenting on the funding round in a statement, he added, “Our shareholders believe that in today’s world there is a much better way of investing in real estate. Through Stake, we will enable anyone to participate in this asset class in an easy, transparent, and digital way. This fundraise allows us to build the go-to digital real estate investment platform for Dubai property and eventually the region. We are focused on bringing the best property investment deals to our clients.”
In five months of its launch, Stake has 4,000 registered users with over 300 of them investing $1.5 million (total) in the properties on the platform. The average size of investment is $5,000 as of now, the startup has told MENAbytes, adding that its sales are growing 30 percent month over month. From the eight properties listed on its platform, 5 have been sold 100 percent.
Manar Mahmassani, co-founder of Stake, said, “When we launched Stake, we made clear our goal to democratize real estate investment and remedy to ills of Dubai’s property market, which prevented the young from participating and delivered unattractive returns for experienced investors. Our shareholders believe in our vision for a world where real estate is a completely liquid and fully accessible investment asset class, available to everyone looking to preserve and grow their wealth. With this fundraise, we can accelerate our journey to radically improve the real estate investment market and bring this tangible asset into the new digital age.”
Amer Hammour, the lead investor in the round, said, “The Dubai residential property investment market offers very attractive opportunities to investors for growth in value and strong current income, as the current high supply gets absorbed by the very strong demand. Stake allows investors to participate directly in this market and make diversified bets on properties through partial ownership deals. Rami and Manar’s extensive and long background in Dubai property and financial investments, and the fantastic team they’ve put together, will ensure that investors will have access to the best underwritten and vetted opportunities, and the highest quality investment management of their assets.”
“We believe that Stake will create the online engine that will allow investors access to different property types in Dubai, the UAE and beyond. It is poised to become the investment channel of the future. We are proud to participate in Stake’s development and to be a long-term strategic partner in the development of the company,” he added.
The startup plans to use the latest funds to scale and enhance its platform, invest in sales and marketing, and grow its team to execute its “ambitious goals in technology innovation, property sourcing, product development, and operational excellence.”