Fractional property investment startup Bricklet has initiated a $25 million equity raise and is simultaneously planning a $100 million residential mortgage-backed securities (RMBS) issue, with the goal of going public within the next year.
Established in March 2019, Bricklet operates an online marketplace that divides a property’s equity into approximately 2% portions worth around $20,000 each. With 5,000 registered users and $20 million in property transactions to date, the company aims to expand its reach in the market.
To facilitate the series B raise, Bricklet has enlisted the services of VCA Partners. The funding round commenced this week and is expected to conclude in mid-April. The proceeds will be allocated towards expanding the team, targeting the self-managed superannuation fund (SMSF) sector, and broadening its client base. The company regards its current $20 million transaction volume as a preliminary launch and market testing phase.
Alongside the equity raise, Bricklet intends to execute a $100 million RMBS issue through Lakeba’s financing arm, its majority owner. The company has engaged a major bank to arrange the RMBS deal. The funds raised from the RMBS offering will provide leverage for investors on the Bricklet platform.
Bricklet anticipates that the equity raise will sustain its operations over the next 12 months, during which it aims to achieve profitability. It also expects to increase its bricklet count from the current 800 to 10,000 and expand its property portfolio from 20 properties to 300 within the next year.
Lakeba, a venture capital investor/incubator with 15 investments, serves as the majority owner of Bricklet. Notable founding shareholders of Bricklet include Mirvac and Stockland, with subsequent investments from News Corp, Realestate.com.au, and Iron Fish.
Revenue for Bricklet is generated through transactional fees charged on its platform and from third-party services such as property management. The company recently partnered with Lara Bourguignon, former CEO of AMP SuperConcepts and current Credas Solutions employee, to oversee the distribution strategy for the SMSF market. Additionally, Joseph Chou, the founder of Ironfish, has joined Bricklet’s board of directors.