Fund.me’s $50 million real estate fund alongside blockchain pioneers Bloqhouse and ChromaWay launches at the Dubai FinTech Summit. The Fintech Times interviewed the CEO.
International real estate investing platform Fund.me has created a $50 million real estate fund in collaboration with Dutch and Swedish blockchain pioneers Bloqhouse and ChromaWay. The fund was introduced in the Madinat Jumeirah in Dubai, United Arab Emirates, during the Dubai FinTech Summit. The CEO of the company was interviewed by The Fintech Times after the event to find out more about the origins of the business and the rationale behind its Summit debut.
The US housing remodeling business is the topic of one of the first blockchain services ever. Over the previous five years, it has seen increases of more than 40%, according to Manly Danh, founder and CEO of Fund.me. “The platform exemplifies a cutting-edge fintech strategy. Through the power of blockchain technology and in a risk-reduced setting, it provides investors with access to opulent real-world assets.
In the past, there was typically a lockup period of five to seven years when an investor agreed to invest in a fund. They would not be allowed to sell their share of the fund or call their capital if necessary during this time. However, these problems can be eliminated by utilizing blockchain technology.
Investors have a year to liquidate their investments and sell them to anybody they like. They are free to continue in the fund for the duration if they so choose, but they also have the option of selling to a different investor, one of their peers, or someone from our investment pool, according to Danh. “In order to provide a transparent method of investing into a fund, we decided to employ tokenization. Providing our investors with a route out if they so choose.
Setting up the fund
According to Danh, the concept was born after the most recent crypto bull run. With their newly acquired wealth, many investors began seeking for new strategies to diversify their portfolios. Fund.me was developed by fusing digital and physical assets and by taking advantage of the emerging market.
Access to necessary cash is a key issue that this fund addresses in the current financial sector, according to Danh. In 2018, Danh founded Fund.me with the goal of democratizing access to real estate funding across the board. “Due to current economic changes, real estate is a good investment because historically it has performed better than stocks, bonds, and other types of assets. However, most investors are unable to participate in transactions like these. The Fund.me mission comes to life in this situation.
Minimizing common risks
Without the danger of a lien position, fund investors will obtain a portion of the luxury US real estate market.
According to Danh, “This is a unique structure through which investors retain a preferential position in the capital stack over a two-year period, with a targeted annualised risk-adjusted return of 20%.
Through a joint-venture structure, the fund invests in equity interests in real estate developments to generate returns. In the end, it results in both pref and profit participation, which together help to accomplish the 20% goal.
“Conservative underwriting, precise geographic targeting, and the built-in fund structure all help to reduce risk. The openness, security, and accessibility of blockchain technology secures this by distributing funding among a number of initiatives, according to Danh.
Working together is essential for success
Fund.me and software pioneer Bloqhouse joined together in a new cooperation to launch the fund. The latter is renowned for developing goods that improve the openness and clarity of financial markets. ChromaWay is the provider of the relational blockchain for the fund. Investors may access and manage their money online thanks to it.
Fund.me may structure deals with loan-to-cost ratios up to and occasionally even above 90% by investing equity as a joint-venture partner in projects. This gives real estate developers the flexibility they need to run successful businesses and launch new projects in Florida and California, the two most active US real estate markets.
The huge demand for luxury residences in the US is advantageous for international investors. Global investors now have access to projects and risk-adjusted profits thanks to this new blockchain offering.
Why start at the 2023 Dubai Fintech Summit?
The reason the fund was established at the Summit, according to Danh, is that “many are reluctant to part with their capital in the US due to the difficult economic climate currently in effect. Outside of the US, people, however, have distinct perspectives on the world. They see this as an investment opportunity rather than a time to cling on.
“The lack of inventories is the country’s largest issue. Many institutional investors are purchasing rental properties and raising rental rates as an alternative to ownership. People can no longer afford a property as a result. Therefore, the issue we are finally resolving is not simply the investment issue but also the housing supply issue.
“We are experts in that. We understand how to identify opportunities, locate supply, and develop and produce supply.
The Middle East is thriving, with Saudi Arabia, Dubai, and Abu Dhabi all vying to surpass one another. Danh, however, emphasizes the necessity for funding in other markets. “These markets, from San Francisco to Los Angeles, are functional; they just require revitalization.”
Under the sponsorship of H.H. Sheikh Maktoum bin Mohammed Al Maktoum, the Deputy Ruler of Dubai, Deputy Prime Minister, and Minister of Finance, the Dubai Fintech Summit 2023 serves as a benchmark for businesses and governments throughout the world to examine financial innovation. World-renowned intellectuals, policymakers, and decision-makers attend the event to contribute to the creation of the frameworks, rules, and tools necessary to shape the future of finance and fintech.