Follow us on
Difitek
  • News
  • What We Offer
  • Contact Us
  • Visit our Site

Real Estate Companies Rush into Crowdfunding

9/4/2014

 
Picture
An innovation is said disruptive when it “helps create a new market and value network, and eventually disrupts an existing market and value network (over a few years or decades), displacing an earlier technology”.

Crowdinvesting has been evolving in a way that could well be that of a potential disrupting innovation for many markets. And real estate may be the first one.


Real estate crowdfunding is the crowdfunding application that has the highest growth rate in this new market, as Crowd Valley also reported in its Crowdfunding Market Report. The first actors operating crowdinvesting models in this market were startups, with almost no previous experience in the real estate sector. In just a couple of years they’ve undergone an incredible growth, catching the attention of professional investors and of course established real estate companies too. Among the latter, some have seen real estate crowdfunding as an innovation that could create a disruptive change in the sector. Therefore decided to turn the threat into an opportunity and jump on it.


Established real estate players are entering the real estate crowdinvesting market equipped with far more resources, larger networks and stronger reputations than the operating startups. This may pose a threat to the young incumbents, which may see “part of their crowd stolen” by more established brands. For instance, it may be that the the new entrants attract with their crowdinvesting services more institutional investors and wealthy individuals - with whom they already have solid relationships - , leaving real estate crowdfunding startups to deal only with retail investors. On the other hand, it could be that incumbent companies with lighter structure and less overhead  are able to adapt quicker to market changes - and crowdfunding is constantly evolving -, keeping their time advantage on the new entrants.  As young technology companies they may also be more attractive to wealthy investors in their 30s- 40s, than big old companies.


Like other crowdfunding markets, also the real estate one is still taking shape: many companies are entering the market and many will also get out at some point, but differently from other sectors, here established companies too are looking to integrate crowdfunding in their operations, thus intensifying the competition. However, being a large corporation with plenty of resources may not necessarily translate into a competitive advantage, especially in a new market like crowdfunding, where everything is evolving very fast.


References

Putzier, K. Crowdfunding Sector Growing Some Gray Hairs. Real Estate Weekly.
Wikipedia. Disruptive Innovation. http://en.wikipedia.org/wiki/Disruptive_innovation
Image credit to: loveforphotography. http://bit.ly/1qNn4wd

Picture
About the author - Irene Tordera

Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.

During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.





Comments are closed.

    RSS Feed

       

    Categories

    All
    All Sectors
    Americas
    API
    Asia
    Australasia
    Clean Energy
    Crowd Valley
    CTO Blog
    Difitek
    Equity Investment
    Europe
    Events
    Expert Analysis
    Fintech
    Global
    Interview
    Lending
    Local Funding Network
    Marketing
    Market Watch
    Oceania
    Platform Updates
    Presentations
    Press Release
    Real Estate
    Regulations
    Russia
    Social Capital
    Webinar

Back to Difitek website


Copyright 2018 Crowd Valley Inc. 
All Rights Reserved.

Crowd Valley does not engage in the offer, sale or transfer of securities and securities may not be offered, sold or transferred via this website. Securities may not be offered or sold in the United States absent (i) registration under the U.S. Securities Act of 1933, as amended (the Securities Act) or (ii) an available exemption from registration under the Securities Act. Please consult legal counsel in the appropriate jurisdiction before offering, selling or buying securities as registration under the Securities Act or similar state legislation may be required.

Please note that the provision of the information on this website does not create and is not intended to create a relationship between Crowd Valley Inc. and any other person. You are not and should not regard yourself as being a client or customer of Crowd Valley Inc. and must not expect Crowd Valley Inc. to have any duties or responsibilities to you, act for you or your clients, or be responsible for providing protections afforded to customers or yourselves or be responsible for advising you in any respect.