The Business
Describe your business model and what makes your business unique:
Shojin is an FCA-regulated proptech company that lowers the barriers to entry for individuals across the globe looking to access institutional-grade real estate investment opportunities in the UK. The platform is designed to make property investment accessible, simple and affordable.
Initially, we’ve targeted affluent working professionals, with our platform empowering fractional investing in real estate developments. Primarily the projects we focus on are residential, PRS (private rented sector), senior living, and student accommodation projects.
Shojin is not a marketplace, crowdfunding platform, or a silent partner; the team identifies and vets promising developments, initially rejecting around 95% of the projects we identify. We then complete significant due diligence on the most promising projects and negotiate with the developer before co-investing the junior funding element alongside the provider of senior debt.
Due to our confidence in the success of investments, the company does not take large upfront fees. We invest our own capital into every project, and put ourselves in a first-loss position. We then share profits at the end. This alignment of interests is crucial for trust; not only will Shojin lose its investment first if a project fails, it only makes money when its investors get paid.
What is your greatest business achievement to date?
Our biggest achievement so far has probably been attracting so many investors from around the world, from almost 40 countries, as well as those in the UK who see the enormous potential of our proposition and the UK real estate market. We’ve obviously hit on something pretty special that has a lot of value for a lot of people.
Before Shojin existed, real estate investments like this were completely unattainable and inaccessible aside from for the wealthiest individuals. We have been opening this up to so many more people and in the future want to extend that further. Previously, most people would have to invest in equity funds that offered comparatively lower returns, while the richest people in the world would participate in property deals that sustained and grew their wealth further.
I think the realisation that there is so much demand for what we’re doing and the satisfaction that our idea was right, makes this feel like a huge achievement. It really was gut instinct – we were already doing this for ourselves thanks to the knowledge and experience Sandeep, my co-founder, and I shared.
How did you fund your business?
The business was self-funded by Sandeep and myself for quite a long time. Because we already had a successful property portfolio we effectively borrowed against that to fund the business. We tested on our own dime effectively.
What numbers do you look at every day in your business?
Our business is completely numbers-driven. We look at the margins on projects that are presented to us. We measure the risk vs return. Thereafter, when it looks like it’ll go ahead we look at the level of interest among our investor base. We look at response rates, followed by how many people express an interest in investing, then how many actually pledge to each project.
There is a lot of tracking and KPI data. Each month, we run a webinar to discuss the state of the market and projects coming online and look at how many people are providing us with their email addresses, from those with whom we engage and track that all the way through the funnel to those that convert to invest. We then overlay that with other demographic details such as location, gender, age, and profession to get a better sense of who our investors are, and can look for trends that might help inform future campaigns.
To what extent does your business trade internationally?
Today, 1% of the adult population controls 45% of global wealth, with real estate influential in building and sustaining fortunes. The next 9% (400 million people) have investible funds of between $100k and $1m but are typically restricted to mainstream equities, bonds, and funds – and therefore relatively unimpressive returns. That is why Shojin aims to continue broadening the pool of potential investors and enabling working people from all professions to invest in real estate.
We already have regional offices in Hong Kong and East Africa, with India and the Middle East to follow, and have attracted a global network of investors from almost 40 countries. We are confident that Shojin has a strong network from which to drive expansion and fund projects beyond the UK.
Where would you like your business to be in five years?
Shojin is currently focused on the United Kingdom due to the country’s reputation and attractiveness for inbound investment, but the fundamentals of the business are strong in whichever region it operates. We aim to continue broadening the pool of potential investors and enabling working people from all professions to invest in real estate.
This is not limited to the United Kingdom – plans to expand project origination into high-growth markets such as East Africa and India – where there are rapidly evolving and lucrative real-estate markets – are already underway.
What software or technology has made the biggest difference to your business?
The ability to process KYC (know your customer) and AML (anti-money laundering) electronically through third-party providers has had the biggest impact. The technology they use cuts out what would be a lot of manual work on our side.
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