CapitalRise, an online platform for prime property lending and investing, confirmed that it has issued £92 million in loans and is now on track to hit its £100 million lending milestone at some point early next year. This, after seeing a significant increase in demand from borrowers and lenders on its platform during 2020.
Notably, CapitalRise’s annual financial results reveal that the platform recorded a loss of nearly £1.5 million in the past year that ended on July 31, 2020 – which is about the same in losses that the firm recorded in 2019.
These losses may be attributed to investment in their business operations, according to CapitalRise CEO and Co-founder Uma Rajah.
Rajah noted that there were extra costs such as substantial investments made in hiring more staff and upgrading the firm’s IT systems. She also mentioned that CapitalRise now has a qualified team and infrastructure in place so that it can maintain its strong revenue growth, with confidence that these efforts will lead to profitability.
This year, CapitalRise posted a year-over-year (YoY) revenue increase of 41% without a corresponding increase in operational costs. The platform managed to maintain its record of zero capital losses while offering average yearly returns to investors of approximately 9.5%.
In statements shared with Peer2Peer Finance News, Rajah said that the platform has been able to take advantage of a steady increase of demand from investors since the beginning of the COVID-19 pandemic. Meanwhile, the growing demand in the real estate market has resulted in a rise in the number of new queries from borrowers, Rajah said.
During the past year, CapitalRise has reportedly overseen £5.5 billion worth of loans, which were secured against prime properties based in central London and in the Southeast of England.
The month of July 2020 was a record month for lending with over £10 million in total loans originated. In August of this year, CapitalRise posted a record-setting month in terms of overall investor demand, with more than 222% growth in total year-over-year (YoY) investments processed.
CapitalRise is now planning to further expand its funding lines so that it can benefit from the different opportunities in the prime property sector.
Raja claims that there was a lot of demand in their part of the market that they’d like to serve. However, they must first focus on growing their funding capacity.
She believes her platform has been quite lucky because one of their main strategies has been that they always aimed to have diverse or many different sources of capital and so they’ve got institutional funding lines, family office funding lines, and are also working with high-net-worth-individuals (HNWIs).
Rajah explained that maintaining these diverse funding sources has helped because the platform has been “protected.” She also thinks they’ve been lucky because these different channels have “huge appetites” to invest during the Coronavirus crisis.
CapitalRise’s annual financial results also revealed that the platform secured a £1 million equity raise from VC company Revolt Ventures in October of this year. Rajah now claims that the company has a solid funding position so it can make substantial investments in the business, and further expand its team with new hires.