Over the past few years, many startups have started to look after real estate investments. The Hamburg-based company Exporo, which started in 2014, now sees itself as the “market leader for digital real estate investments in Germany”. “Since its inception, we have financed more than 170 projects, raised more than € 315 million in capital, and have repaid more than € 100 million to our investors with a 100% repayment rate,” says Simon Co-founder of Exporo.
The young company’s investors include e.ventures, Holtzbrinck Ventures, Sunstone and BPO Capital. The capital reserve of Exporo at the end of 2017 was around 10.2 million euros. The balance sheet loss of the company, a small corporation, which last employed 125 employees, stood at around 5.9 million at the end of 2017. “With fresh funds from a financing round that is in the near future, we want to tackle internationalization and be active in at least one other European market over the next 12 months,” Brunke says about the plans for the coming months. In an interview with deutsche-startups.de he also talks about his own BaFin license, absolutely right decisions and project inquiries.
How would you explain your grandmother Exporo?
Exporo is Europe’s largest digital real estate investment platform. It provides investors with an overview of professional real estate projects and existing real estate in which they can invest online and directly. Private investors benefit from two complementary product categories: On the one hand, they can invest in high-yield and tested real estate projects at short notice and at fixed interest rates – for example, project developers set up new residential buildings or refurbish commercial properties over a certain term. And on the other hand, a real innovation, investors can participate directly in selected portfolio properties – economically as an owner -, they receive quarterly distributions from the rental surpluses and are also involved with 80% of the increase in value. Best of all, these pieces of “digital ownership” are tradable through Exporo.
Has your concept changed somehow since the start?
We started and grew up in the area of project financing. This market has so far been dominated by institutional investors and we have opened it up to retail investors. Transferring the benefits of digitization – ie real-time information, transparency, access, low investment levels, efficient processing, etc. – to the subject of property was the next logical step for us. We see a much larger target group for the real estate portfolio than for pure project financing, since they can invest economically “like an owner”, so that in addition to the distributed cash flow of the existing property, there is an additional share in the performance and the investment is also stable in value, asset-backed and is inflation-protected. We have already made several property acquisitions with a total volume of approx. 60 million euros and plan to purchase around 30 additional properties in 2019 with an asset volume totaling around 300 million euros. In addition, we have taken a very big step in terms of regulation with our BaFin license, so that we no longer work with statutory special regulations but fully regulated. Basically, our concept has not changed, we have only improved it. We still want to enable everyone to profit from the attractive real estate market with small amounts and little effort.
And how exactly has Exporo evolved since its founding?
Very pleasing: every year since our foundation in November 2014, we have more than doubled the number of projects financed as well as the amount of brokered capital through our platform, as well as our revenue, of course. The sum of the capital repaid to our investors – now over 100 million euros – and the number of employees in the team have also risen steadily. To do this, we have obtained our own BaFin license – which lasted more than 12 months – and have made great technical progress on both sides of our platform.
But once butter on the fish: how big is Exporo meanwhile?
We currently have 125 employees and have financed more than 170 projects since the foundation, provided more than 315 million euros in capital and, with a repayment ratio of 100 percent, have already repaid over 100 million euros to our investors. In 2018, more than 173 million euros of capital were brokered, of which alone in December over 22 million euros with a daily peak value of 4.15 million euros. Our customer base has grown to 15,000 investors who have so far invested around six times on average. From this we also derive a very positive future perspective – what will we achieve with 100,000 investors, or even 500,000? The combination of real estate as the largest asset class in the world and the need to save and invest makes our case so exciting.
Please take a look back: What has gone so wrong in the past few years?
Nothing has gone wrong so far. That’s because it’s extremely important for us to keep a close eye on the submitted projects. From about 20 to 25 project inquiries per week, only one or two projects make it to the platform. Exporo has a team of 40 experienced real estate experts who thoroughly examine each contract or project, structure it contractually and, above all, keep it under control once a month via exporo.de. But there have already been things like the BaFin license, which took an incredibly long time – we underestimated that. Just as diverse digital processes with custodian banks and the fully regulated world – there is still a lot of analog work, which always presents us with challenges.
And where have you done everything right so far?
We have developed from an initially cash flow-oriented startup to a scaling company, created a lot of jobs that we were allowed to fill with incredibly great people and have proven with Exporo that the real estate industry has an incredible amount of “bacon”, very analog and is intransparent and digitization can create huge benefits for the end user. But since this whole issue as a platform can only succeed through scaling – a lot of people, big tech resources, etc. – it was absolutely the right decision to focus on venture capital.
Where is Exporo in a year?
We also want to “double” again in the next 12 months. In concrete terms, this means procuring existing real estate for 300 million euros and 200 million euros in project financing via our platform. In addition we will bring more experts and specialists on board, so that our team will grow to 160 team members. With fresh funds from a financing round that is in the near future, we want to tackle internationalization and be active in at least one other European market over the next 12 months. We will also continue to develop our Exporo trading platform – with the aim of turning an illiquid asset into a liquid – with the result that each and every one of his “pieces of real estate” acquired through Exporo can trade at fair value on a daily basis. And last but not least, by the end of 2019, we want to place 100% of Exporo’s activities under Bafin regulation.