CapitalRise has lent £92m and expects to reach its £100m lending milestone in early 2021, after witnessing a surge in demand from both borrowers and lenders this year.
However, according to the prime property investment platform’s annual financial results, the company posted a loss of almost £1.5m in the 12 months ending 31 July 2020, roughly in line with the previous year’s losses.
This was due to investment in the business, said CapitalRise chief executive and co-founder Uma Rajah (pictured).
“These costs included considerable investment in recruitment and IT,” she said. “We have the team and infrastructure in place to continue our strong income growth, with confidence that it will translate directly to the bottom line.”
During the 2020 financial year, CapitalRise achieved year-on-year income growth of 41 per cent with no increase in costs. The platform maintained its record of zero capital losses to date, and delivered average annual returns to investors of 9.5 per cent.
Rajah told Peer2Peer Finance News that the platform has benefitted from a strong surge of demand from investors since the start of the pandemic, while pent-up demand in the property market has led to an influx of new borrower queries.
Over the past 12 months, CapitalRise has screened £5.5bn of loans, secured against prime central London properties and prime properties in the South East of England.
July 2020 was a record-breaking month for lending with more than £10m of loans originated. In August 2020, CapitalRise had a record-breaking month in terms of investor demand, with over 222 per cent growth in investments processed, year-on-year.
The platform will now seek to expand its funding lines in order to take advantage of the opportunities in the prime property market.
“There was a huge amount of demand in our part of the market that we would like to serve but in order to do that we need to grow our funding capacity,” said Rajah.
“I think we have been really lucky because one of our strategies has been that we always wanted to have diverse sources of capital and so we have institutional funding lines, family office funding lines, and high net worth individuals.
“Maintaining those diversity of sources protected us very well and we’re lucky because all of those different channels have huge appetites to invest throughout the pandemic.”
The company’s annual financial results also confirmed that the business received a £1m equity raise from venture capital firm Revolt Ventures in October.
“We have used our strong funding position to invest heavily in the business during the year, strengthening our team with new strategic hires, including six new employees whom we successfully on-boarded during the lockdown period,” said Rajah.
“We have continued to invest heavily in the development of our tech to deliver a superior customer experience, to develop new products and to provide the team with the data insights to drive the business forward.
“My team and I are hugely excited by the prospect of helping the business achieving its enormous potential.”