Crowdfunding for homes? Residential investment for as little as £50? Sounds incredible. We meet Property Partner's Dan Gandesha

The founder and CEO of Property Partner, Dan Gandesha, tells us how he plans to build a “global property stock exchange”

Residential property crowdfunding platform Property Partner was only founded last year, but since its launch, it has grown fast, with the backers of funding circle and Zoopla investing in the firm.

Based in London, the company has a team of 37 employees, and has no lesser aim than building a “global property stock exchange”.

Is it possible? We spoke to founder and CEO Dan Gandesha to find out more.

 

How quickly has your business grown?

Since launch a year ago (January 2015), we have crowdfunded 150 properties with a total of more than £22.6m invested on the platform.

£4.1m has been invested in our unique secondary market, which allows investors to trade their property shares with other investors, and exit the market at a time and price of their choosing.

Our aim is to increase the number of listed properties tenfold over the next 12 months across the UK, with ambitions to expand internationally thereafter. Ultimately, we plan to build a global property stock exchange.

What’s been key to your growth?

Firstly, we’ve had the backing financially of Europe’s leading investors, including Index Ventures (behind Funding Circle), Octopus Investments (behind Zoopla) and Seedcamp (behind Transferwise).

I’m proud to say we have a best-in-class team including three non-executive directors: Ed Wray, the co-founder of Betfair and one of Europe’s FinTech pioneers; Neil Rimer, co-founder of Index Ventures and Jo Oliver, director of Octopus Ventures.

We’ve also been totally focused on getting our story out there. Fully regulated by the Financial Conduct Authority, we allow investors to buy shares in residential property at the click of a button, without the hassle of mortgages, solicitors or maintenance.

Investors then own a share of the property, receive rental income each month, and capital gains if the property rises in value. Since launching last year, we’ve attracted nearly 6,000 individual investors, two thirds of whom have bought shares in multiple properties.

Not only has the platform removed the financial and bureaucratic barriers to entry, it has also made it much easier for buy-to-let investors to spread their risk – by diversifying their portfolios into different geographic areas and property types.

People are starting to realise that residential investment is no longer the preserve of the truly committed and relatively wealthy. For as little as £50, anyone can now own a share of a property, without the traditional costs, stress and hassle.

What metrics do you look at every day?

We have a screen on the wall of our office with a whole load of metrics including total invested and traded on the platform, dividends paid out, traffic levels and conversion on the site and so on. This gives us useful insights into how the business is performing in real time.

Of course, a Proptech startup like ours is a very broad church. Each team – technology, property, marketing, sales, finance, product, legal, human resources etc, has its own set of performance metrics, which are also fed back to me. 

What do you consider your greatest success in business?

I love it when we deliver something totally new for our customers. We did that when we launched our globally unique secondary market, which has, for the first time, brought liquidity into the residential property asset class. We did it again when we made it possible for anyone – not just big institutions and high net worth individuals – to invest in institutional-grade residential blocks through our platform. 

And your biggest mistake?

Looking back, I would have thought more carefully about the timing of huge professional and personal milestones. Rather like buses, these key moments in my life have had a habit of coming too close together for comfort. On my wedding day, for example, we closed our seed funding round. As the guests were arriving at the hotel for our big day, I was signing documents in my penguin suit!

What’s the most important management lesson you’ve learnt?

Surround yourself with good people.

I first came across Rob Weaver, our director of property, at the RICS annual conference where he was keynote speaker as global director of residential property at RBS. He was the big cheese in property. We were half a dozen guys in a small office in Borough – still in the early stages of setting up the business. I suspected he might be out of reach but I thought – what the hell.

I sent a cold email; several in fact, as the address on his bio was wrong so I had to guess combinations. Finally, I got lucky with one that didn’t result in a bounce. Rob responded with a deafening silence.

Then we secured a £1.25m seed funding round led by Octopus Investments, the backers of Zoopla who had recently floated on the London Stock Exchange. This added extra credibility to my somewhat audacious attempt to hire Rob, and he agreed to join the company shortly after!

How quickly has your team grown, and how have you attracted great talent?

It’s been a whirlwind with the company growing to 37 staff and we plan to continue recruiting heavily through 2016.

My top team includes the aforementioned Rob Weaver; chief financial officer Nick Parr, who like me is a chartered accountant and FCA-authorised; and our chief technology officer Thomas Remmert, who has 20 years experience in scalable web development and is the architect of Comdirect Bank’s online trading system.

All have been instrumental in our growth in the past 12 months. Word-of-mouth has been our best recruiting sergeant. In fact, only this month, Nick Hagan has joined us from Betfair as our chief operating officer.

What’s the most valuable insight you’ve gained into your market or industry?

As a qualified chartered accountant, I’ve learnt the value of backing up your hunches with hard evidence.

Before setting out on this journey to start and run my own business, I was head of commercial development & startup investments at Sky. I’ve seen many startups fail, a few succeed. So I’ve had the inside track on early stage beartraps.

I instinctively knew that property was a market ripe for disruption, but the process of seeking and securing seed funding for my business idea forced me to research and refine my arguments, to test every one to destruction. Seeking funding isn’t a painless process but it imposes a rigour on you which pays huge dividends.

What do you think are the most significant developments or changes on the horizon for your industry?

The most immediate is the 3% stamp duty hike on second homes coming into effect in April. That’s going to hit the traditional buy-to-let market as will the cuts in mortgage interest tax relief starting next year. Life as an amateur buy-to-let landlord will become a whole lot harder. For many, the profits will dwindle away. The big question will be “is it worth it anymore?”

That’s where Property Partner comes in. Professional, large-scale investment platforms won’t be hit by the changes. We offer property investors a compelling solution. Through our platform anyone can create their own portfolio of outstanding properties hand-picked by our hugely experienced team, shielded from these tax changes and diversified across the country.

What makes a great leader?

Have a vision and communicate it well. In practical terms, this means that everyone in the business clearly understands where we’re going, and their individual role in getting us there. Personality comes into it as well. Everyone’s differen
t but at Property Partner we all have the same ambitions for the business, and just as importantly we share a strong and unified company culture.

As a leader, you also need to understand your own strengths and be honest with yourself and others about where your weaknesses lie. This inspires others to do the same and creates a learning culture – an absolute necessity when building a company that does something totally new in the market.

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