Shojin Property Partners reported a full-year profit for the first time last year, as it enters a new growth phase.
The property investment platform, which offers both debt and equity opportunities, recorded a £234,000 profit on almost £1m in revenues in the year to 30 June 2020, according to its chief executive Jatin Ondhia.
This is up from a £830,000 loss the previous year, according to accounts filed with Companies House, which was a significant improvement from a £2.64m loss in its 2018 accounts.
Part of Shojin’s success is due to its focus on junior funding, which Ondhia calls an “untapped area”.
“The management team is from a real estate and private equity background, so we can see where the opportunities are and where the value is,” Ondhia told Peer2Peer Finance News,
“We focus on junior funding, which is an untapped area. Other platforms focused on senior funding, but many players flooded into this market, squeezing rates.
“There are not many junior lenders out there, so we get to cherry pick the best projects.”
Shojin is looking to expand its team to help it scale up the business this year.
“We’ve developed a really solid foundation for the business so we’re now ready to scale again,” Ondhia said.
“We’re hiring again. We’re looking to recruit someone for the finance team, someone for the investor relations team and two new appointments within deal origination.”
Shojin is fundraising to support its expansion plans. The platform was meant to do a Series A fundraising round last May, which has been pushed back to this summer. PwC has been advising Shojin on its fundraising plans.
Ahead of the Series A round, Ondhia revealed that Shojin has raised £1.2m, utilising the government’s future fund – a pandemic initiative to support innovative and high-growth companies.
“I think there is a lot of appetite for what we do in the market,” Ondhia said.
Shojin focuses on mid-size deals in the range of £2m to £6m. Ondhia said that the business does not need more than £12m of funding per year to support its growth plans, equating to around five deals, as the margins are higher on junior funding.
“We’re not a volume-based business,” he added.
Ondhia said that Shojin performed well last year despite the pandemic, with only a temporary disruption to the business during the March 2020 lockdown.
“As soon as lockdown lifted, people breathed a sigh of relief,” he said.
“We funded a project shortly afterwards in just two weeks. From an investor perspective, I think people were spending more time at home and were ready to do something.”