Earlier in the month it was reported that real estate crowdfunding platform, iFunding, has successfully met is crowdfunding campaign goal that it was running on Crowdfunder. The campaign is a trend we are seeing take in that a crowdfunding platform taps another crowdfunding platform to raise new capital.
The latest example is Swiss Crowd which has launched an equity crowdfunding campaign on Seedrs. Like iFunding, Swiss Crowd operates real estate crowdfunding. Launched in December of last year, Swiss Crowd offers country specific real estate investing through its crowdfunding platform. The firm began its endeavors with the Swiss Crowd site, of which offers investing in Switzerland based real estate, with a similar site, Italy Crowd, that will cater to the Italian market in the midst of launching. In addition, the firm has plans to continue to launch country specific crowdfunding sites with acquired domains such as USA-Crowd.com, Russia-Crowd.com, Emirates-Crowd.com, China-Crowd.com, and London-Crowd.com.
To raise investments to purchase real estate, Swiss Crowd acts as a mediator between investors and property sellers; calling the offering ‘Interest Options’. Upon raising demand to purchase a property, Swiss Crowd connects the seller with the investors, with funds transferring between them. As a broker platform for the deals, Swiss Crowd receives a 5% fee from the property seller.
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Launching a campaign on Seedrs, Swiss Crowd is aiming to raise £240,000 as it sells 10% of its equity. According to Augusto Vecchi, Founder of Swiss Crowd, he explained to Finance Magnates that the firm chose Seedrs because of their existing track record, stating “ We turned to Seedrs because it is the biggest equity crowdfunding platform in Europe and London is the world capital of crowdfunding”.
Asked why they elected to raise funds on another site instead of marketing directly to their existing customers, Vecchi answered that “Swiss Crowd works on real estate market, we prefer that Seeders collects money for us considering that they are specialized in evaluation and fundraiser for start-up”.
The creation of a Swiss focused crowdfunding platform comes at a time that real estate prices in Switzerland have been appreciating over a multi-year period. Partially, the demand for Swiss real estate has come from holders of euros that have rotated funds into Swiss franc denominated assets to avert weakness in the euro. Asked whether January’s decision by the Swiss National Bank to allow the euro/franc exchange rate to flow more freely has led to a decline in demand for Switzerland real estate, Vecchi answered that it has had minimal effects, as he stated “ There are no considerable changes, the price of real estate in Switzerland continue to be very “attractive” for investors”.